Module 7

Question 1

Define a Small Group

Answer 1

Small group insurance is available for organizations with fewer than 50 full-time equivalent employees.

Question 2

A type of employee benefit plan that allows employees to pay their share of health insurance premium contributions on a pre-tax basis, reducing their taxable income & increasing their take-home pay.

Answer 2

Premium-Only Plans

Question 3

This doesn’t apply to firms with fewer than 50 employees.

Answer 3

Employer Mandate

Question 4

They only represent a single firm to small employers purchasing health insurance.

Answer 4

Captive Agents

Question 5

They represent several insurers to small employers purchasing health insurance.

Answer 5

Independent Agents (brokers)

Question 6

Explaining coverage, investigating client options, resolving claims questions/disputes with insurers, & underwriting for the carrier.

Answer 6

Broker and agent activities

Question 7

It helps insurers determine the level of risk associated with insuring an organization. This information is used to set premiums and determine coverage limits. Agents may get bonuses for low-risk applications, which incentivizes using this process.

Answer 7

Field underwriting

Question 8

Groups of small employers who come together to pool their employees into a larger group, seeking the lower premiums that large employers enjoy.

Answer 8

Employer coalitions

Question 9

Nationwide insurance plans that sell coverage to small employers, are exempt from state insurance mandates, and sell coverage more cheaply.

Answer 9

Association Health Plans (AHPs)

Question 10

Small firms with 50+ full-time workers are required to offer coverage or pay a penalty of $2,000 per employees (excluding the first 30 workers).

Answer 10

“Pay or Play”

Question 11

Defined by the ACA as averaging 30 or more hours of work per week.

Answer 11

“Full-time” definition

Question 12

The ACA offers limited duration tax credits for small firms employing fewer than 25 full-time employees that receive annual average wages of less than $50,000 if the employer pays half or more of the premium for qualifying coverage.

Answer 12

Small-Employer Exchange

Question 13

Employers with a health plan that was operational before March 23, 2010, are allowed to keep their existing plan. Firms may add employees and change insurance carriers, but are limited on the extent to which other features of coverage may change.

Answer 13

Grandfathering

Question 14

The ACA established individual health insurance exchanges as a mechanism for people to access this type of aid for the purchase of coverage.

Answer 14

Affordable Care Act (ACA) subsidies

Question 15

The ACA eliminated use of preexisting conditions in setting premiums in the individual market.

Answer 15

Prohibition on preexisting conditions

Question 16

The individual market provides this type of short-term coverage for people moving from one employer-sponsored plan to another.

Answer 16

Transitional Coverage

Question 17

The individual market provides this type of coverage for the otherwise uninsured who tend to acquire and drop coverage.

Answer 17

Spells of Coverage

Question 18

They were intended to enhance competition in the individual market with essential benefits and metal tiers defining comparable product offerings.

Answer 18

ACA-compliant plans

Question 19

ACA-compliant plans offered by many firms that exited the exchanges. Doing this allowed insurers to sit on the sidelines and reenter the exchange market if the situation improved.

Answer 19

Off-exchange plans

Question 20

An insurer quoting a premium higher than the standard rate for people with a declinable condition.

Answer 20

Rated-up

Question 21

Those with high health risks may not buy individual coverage and may instead migrate to public or employer-sponsored coverage.

Answer 21

Selection bias

Question 22

In insurance, the extent to which people with different risks are combined.

Answer 22

Risk pooling

Question 23

In the individual market, factors that influence the decision to purchase a particular type of insurance policy show substantial risk pooling, but over a narrow range of expected losses.

Answer 23

Determinants of Choice

Question 24

Under the ACA, children up to age 26 can be covered under their parents’ group insurance policy.

Answer 24

Coverage under parent’s policies

Question 25

Imposed by healthcare-sharing ministries to deal with moral hazard.

Answer 25

Lifetime maximum payments

Question 26

Covering young adults in their parents’ employer-sponsored insurance plans leads to higher premiums that are paid for by wage and benefit reductions to workers.

Answer 26

Compensation differentials

Question 27

Participant’s annual responsibility for case in healthcare-sharing ministries, which is like a deductible.

Answer 27

Annual unshared amount

Question 28

Modern examples of fraternal sickness funds. The organization has no legal obligation to reimburse participants’ bills but has an ethical obligation to do so if funds are available.

Answer 28

Healthcare-sharing ministries

Question 29

For people transitioning from one job to another. Policies use limitations on preexisting conditions to control adverse selection.

Answer 29

Short-term health insurance