Objective 1 Flashcards
Types of group life insurance benefits
- Basic group term life*
- Group supplemental life
- Group accidental death and dismemberment (AD&D)
- Dependent group life
- Survivor income benefits
- Group permanent life
- Group universal life (GUL)
- Group variable universal life
- Group credit life insurance
- Living benefits
Typical basic group term life plan designs
- Flat dollar plans
- Multiple of earnings plans*
- Salary bracket plans
- Position plans
Group term life disability provisions
- Waiver of premium
- Total and permanent disability
- Extended death benefit
Formula for group term life imputed income
Monthly imputed income = [Table I rate * (Coverage amount - $50,000) / $1,000] - EE contributions
Benefit provisions for group disability income
- Definition of disability
- Elimination period
- Benefit period
- Benefit amounts
- Benefit offsets
- Limitations and exclusions
- Optional benefits
Typical definitions of disability for group disability income
LTD: 1st 24 months after EP, own occupation; loss of income % is 20%. After 1st 24 months, any occupation for which EE is reasonably suited; loss of income % is 40%.
STD: unable to perform own occupation duties due to non-occupational accidents or sickness.
Methods for reducing benefits for income earned during a disability
- Proportionate loss formula
- 50% offset
- Work incentive benefit
Optional benefits that may be added to group disability contracts
LTD: 1. COLA 2. Survivor benefit 3. Expense reimbursement for day care expenses 4. Pension benefit 5. Conversion option 6. Spousal benefits 7. Catastrophic benefits STD: 1. 24-hour coverage 2. First day hospital coverage 3. Survivor benefit
Key dimensions of medical benefit plans
- Definition of covered services and conditions under which these services will be covered.
- Degree to which the individual participates in the cost of the service.
- Degree to which the provider participates in the risk related to the cost of the service.
Services covered by medical policies
- Facility services
- Professional services
- Diagnostic services
- X-ray and lab services
- Prescription drugs
- Durable medical equipment
- Ambulance
- Private duty nursing
- Wellness benefits
- Nurse help lines
- Disease management benefits
Purposes for having the insured share in the cost of the medical plan
- Control utilization
- Control costs
- Control risk to the insurer
Types of provider reimbursement
- Discounts from billed charges
- Fee schedules and maximums
- Per diem reimbursements
- Hospital diagnosis related groups (DRGs)
- Ambulatory payment classifications
- Case rate or global payments
- Bonus pools
- Capitation
- Integrated delivery system
Provisions included in medical plans
- Overall exclusions
- Mandated benefits
- Coordination of benefits
- Subrogation
- Preexisting conditions exclusion
- COBRA continuation
- Conversions
Common exclusions for medical plans
- Services deemed not to be medically necessary
- Services deemed to be experimental
- Services related to cosmetic surgery
- Other specified services, such as mental, hearing, and vision services
- Transplants
- Services for which payment is not otherwise required
- Services required due to an act of war
- Services provided as a result of a work-related injury
- Services provided by a provider related to the patient
Criteria for provincial Medicare plans to qualify for federal contributions
- Comprehensiveness - all medically-required hospital and physician services must be covered under the plan
- Universality - all legal residents of a province must be entitled to the plan’s services on uniform terms and conditions
- Accessibility - reasonable access by residents to hospital and physician services must not be impeded by charges made to those residents
- Portability - the plan may not impose a waiting period in excess of 3 months for new residents, and coverage must be maintained when a resident moves or travels within Canada or is temporarily out of the country
- Public administration - the plan must be administered on a non-profit basis by a public authority
(Extra-billing and user charges are not prohibited but will result in reductions in the federal grants to the province.)
Benefits covered by most Canadian provincial Medicare plans
- Hospital services
- Physician services
- Other professionals, such as optometrists, chiropractors, osteopaths, and podiatrists
- Prescription drugs for social assistance recipients and residents over age 65 (most provinces)
- Prostheses and therapeutic equipment
- Other diagnostic services (lab and x-ray)
- Dental care
- Out-of-province coverage
Concerns about the Canadian Medicare system, from recent reports
- Waiting months to see a specialist
- Waiting for diagnostic procedures due to shortages of equipment and specialists/techs
- Waiting for elective and non-emergency surgery
- Overcrowded ERs
- Waiting in hospitals for LTC facility due to shortage of LTC beds
- Technology-intensive services are not available everywhere
- Rationing because demand for services exceeds supply
- Some essential services are not covered (Rx for chronic illness)
Categories of expenses commonly covered by private (supplemental) medical plans in Canada
- Hospital charges
- Prescription drugs
- Health practitioners
- Miscellaneous expenses
- Out-of-Canada coverage
Group dental insurance is provided through:
- Traditional employers
- Multiple employer trusts
- Unions
- Associations
- Chambers of commerce
Organizations that sell dental insurance
- Insurance companies
- Dental service corporations (e.g., Delta Dental)
- Blue Cross and Blue Shield plans
- Dental HMOs
- Dental referral (discount card) plans
- Third party administrators