Module 8 Flashcards
Not giving credit to a plan for favorable risk attributes associated with a healthy population. This makes health insurance more affordable for those with higher risk.
Adjusted Community Rating
Age (within a range of 3 to 1), geographic area, tobacco use, and family composition.
Post-ACA allowable underwriting factors
They must be covered in fully insured plans, but don’t have to be with self-insured plans, leading to cost savings.
State-mandated Benefits
In self-funding, looking at health plan components separately to determine which drive the plan’s costs the most.
Unbundling
More transparency and use of bundled pricing and direct contracting to reduce claims costs.
Administrative enhancements when opting to self-fund.
Cost fluctuations can put a strain on a company’s cashflow.
Risks when self-funding
This policy caps how much an employer pays for any one person’s claims during the policy period.
Individual specific stop-loss insurance
The policy caps how must an employer is obligated to pay for all its claims across a full plan year.
Aggregate stop-loss insurance
Stop-loss insurance reimburses the plan sponsor for health payments in excess of this pre-determined level.
Attachment Point
When insurers quote a separate, much higher deductible for high-risk individuals with large claims in the past.
Lasering
Self-funded plans with stop-loss insurance with relatively low attachment points.
Level-Funded Plans
“Minimum premium” language, which requires employer payments even if workers are laid off, and a 12/18 clause.
Contractual provisions to examine when opting for a level-funded plan.
Federal agencies, including the DOL, the U.S. Treasury, HHS, and the EEOC.
Regulation of self-funded plans.
In health insurance: Plan participants and dependents.
In stop-loss insurance: Employers being protected against excess loss.
Insureds for health insurance and stop-loss insurance.
The employer’s economic condition, financial risk tolerance, and desire for plan flexibility and lower administrative costs.
Determinants of the viability to self-fund.
Similar health risks; transition costs and barriers; and additional compliance, financial, and plan management obligations.
Arguments countering substantial exodus of healthy risks from insured marketplace.
The employer (not the participant) takes on the risk of additional claims for the person.
Stop-loss contract lasers effect on individual participant actual plan coverage.
They prohibit a plan from denying an individual eligibility for benefits based on a health factor & from charging a person a higher premium than a similarly situated person based on a health factor.
HIPPA non-discrimination prohibitions for group health plans.
Advantages inherent in self-funding employee benefits include which of the following:
A. Lower administration costs since employers avoid the costs of insurance carrier profit margins, risk charges, premium taxes, and contingency margins.
B. Avoidance of the ACA’s Health Insurance Tax.
C. Greater opportunities for flexibility in plan design as compared to a fully insured plan.
D. All of the above.
D - All the points are true.
All of the following are disadvantages inherent in self-funding EXCEPT:
A. Low Risk
B. Stop-loss coverage may be dropped or not available
C. Adverse selection on offerings my occur, especially if a fully insured plan is also offered.
D. High Risk
Answer: A
Self-funding can be high risk for organizations due to high volatility in claims and claims costs. A large, catastrophic claim can be devastating to employers that don’t have the financial reserves to cover it. Getting stop loss coverage or renewals is sometimes extremely difficult for some small groups desiring it.
Which type of plan eliminates most, if not all, of the premium taxes and state-insured mandates?
A. Fully insured plans
B. Level-funded plans
C. Self-Funded Plans
C. Self- Funded Plans
Which of the following is a common practice among insurers of assigning higher deductibles to specific high-risk individuals with large past claims to place responsibility on the employer?
A. Individual specific stop-loss insurance
B. Aggregate stop-loss insurance
C. Lasering
C. Lasering
Which of the following types of insurance caps how much the employer pays for any one employee’s claims during the policy period?
A. Individual specific stop-loss insurance
B. Aggregate stop-loss insurance
C. Annual responsibility for care
A. Individual specific stop-loss insurance
Which of the following types of insurance caps the amount the employer will pay for healthcare costs for the entire group over a full plan year?
A. Individual specific stop-loss insurance
B. Aggregate stop-loss insurance
C. Bundled pricing
B. Aggregate stop-loss insurance
Which of the following reduces the employer’s financial risk, but increases the premium for stop-loss coverage?
A. Lower attachment points
B. Lasering
C. Using factors such as health status to set premiums
A. Lower attachment points
All of the following are true of the healthcare-sharing ministries (HCSMs), EXCEPT:
A. HCSMs are true insurance in the conventional sense of the term.
B. HCSMs have no legal obligation to pay bills, but are ethically obligated if funds are available.
C. Individuals in HCSMs pay monthly share amounts, have an annual responsibility for care, have an annual unshared amount, and have lifetime maximum payments.
A. HCSMs are true insurance in the conventional sense of the term.
All of the following are true about short-term health insurance places, EXCEPT:
A. It provides low-cost catastrophic coverage for relatively healthy people.
B. Short-term policies can currently extend for 365 days.
C. Policies are underwritten with adjusted community rating.
C. Policies are underwritten with adjusted community rating.
