Other Health Insurance Concepts Flashcards
An owner of an individual health insurance policy with a death benefit wants to change the beneficiary, what is the only time in which the owner of the policy cannot change the beneficiary?
If the beneficiary is deemed irrevocable.
How long must insurers cover dependent children according to the Affordable Care Act?
Up to the age of 26. Regardless of their marital status, residency, financial dependence on their parents or eligibility to enroll in their employer’s plan.
What is an exception to the 26 year old age limit?
If the dependent is incapable of self-support because of physical or mental handicap. Proof of dependency is required annually after a 2-year period following attainment of the maximum age.
What provision states that an individual health insurance policy provides a death benefit, it must also include a change of beneficiary?
Change of beneficiary provision unless the beneficiary is irrevocable
What does modes of premium payment refer to?
The frequency that premiums are paid
Why is a higher mode of payment correlated to a higher premium?
Because the company willl have additional expenses in billing the premium store frequently.
What is the purpose of the coordination of benefits (COB) provision?
The purpose is to avoid duplication of benefit payments and overinsurance when an individual is covered under multiple group health insurance plans.
Is the coordination of benefits (COB) provision found in individual policies or group policies?
Group policies only
What provision prevents total amount of claims paid from all insurers covering the patient from being more than the total allowable medical expenses?
Coordination of Benefits (COB) provision
How does the Coordination of Benefits (COB) provision prevent over insurance?
Ranks multiple group insurance through primary, secondary, tertiary.
If a couple is married and they both have group insurances through their work which is the primary?
Their personal grou-p work insurance is the primary and their partners insurance is the secondary.
If a married couple has a child and both of their work covers their child who is deemed the primary coverage?
Which ever parent’s birthday is first.
What is occupational coverage?
Occupational coverage provides benefits for illness, injury or disability resulting from accidents or sicknesses that occur on or off the job.
What is nonoccupational coverage?
Only covers claims that result from accidents or sicknesses occurring off the job.
What is the definition of partial disability?
Defined as the inability to perform one or more of the regular duties of one’s OWN OCCUPATION or the inability to work on a full-time basis, which results in a decrease in the individual’s income.
What is the purpose of partial disability?
To cover a partial loss of income when the insured is disabled to the point of being able to report to work, but not being able to perform all of the regular duties of the job.
How much does partial disability cover?
50% of the total disability benefit and limited to a certain time period.
What is the definition of recurrent disability?
A policy provision that specifies the period of time (usually within 3-6 months), during which the recurrence of an injury or illness will b e considered as a continuation of a prior period of disability
What does recurrent disability provision protect the insured from?
Another elimination period
What is residual disability?
The type of disability income policy that provides benefits for loss of income when a person returns to work after a total disability, but is still not able to work as long or at the same level he/she worked before becoming disabled.
How does residual disability work?
If the person can only work part-time or at a lesser paying position, residual disability will make up the difference between their present earnings and what they were earning prior to disability.
What does the cost-saving services or case-management provisions do?
Provide plans 3iwth controlled access to healthcare through the use of case managers.
Used to large, ongoing claims.
What is preauthorization?
A cost-containment measure requiring that the insured obtain approval from the insurer before getting an expensive surgery, referred to a specialist, or nonemergency healthcare service.
When does a prospective e review take place?
Before the physician provides care they can check if the procedure is covered and what the rate to be paid will be
When do concurrent reviews take place?
At the same time the patient is in the hospital
Who does a concurrent review?
The insurance company
Who does retrospective reviews?
Both the employer and the insurer
When are retrospective reviews done?
After claim is filed
What are two examples of managed care plans?
HMOs and PPOs
Who regulates workers compensation?
The state
What are four types of benefits provided by workers compensation?
- Medical benefits
- Income benefits
- Death benefits
- Rehabilitation benefits
What is subrogation?
Legal process by which an insurance company seeks recovery of the amount paid to the insured from a third party who may have caused the loss.
Are premium payments for personally-owned disability income policies tax deductible?
No
Are personally-owned disability income benefits income tax free?
Yes
At what point can medical expenses be claimed as deductions?
The law permits deductions for unreimbursed expenses in excess of 7.5% of the adjusted gross income (AGI)
True or False: Premiums paid by the employer for disability income insurance for its employees are deductible as a business expense and are not considered as taxable income to the employee.
True
Are benefits received by an employee from a disability claim taxable?
Yes
What is a noncontributory group plan?
The employer pays the entire cost of the disability insurance premium, so the income benefits are included in the employee’s gross income and taxed as ordinary income.
What is a fully contributory group plan?
The employee pays the entire cost of the disability insurance premium, so the income benefits are received income tax free by the employee.
What is a partially contributory group plan?
The cost of disability insurance is paid partially by the employer and partially by the employee. The portion paid by the employee is received income tax free and the portion paid by the employer is included in the employee’s gross income and taxed as ordinary income.
How long is short-term disability group plans?
Less than 2 years
How long are long-term disability (LTD) group plans?
Usually pay benefits for 2 years or longer
True or False: Sole proprietors and partners may deduct 100% of the cost of a medical expense plan provided to them and their families because they are considered self-employed individuals, not employees.
True
Are key person disability income premiums deductible or not deductible?
NOT deductible
Are key person disability income benefits taxed or tax free?
Tax free
What is Business overhead expense (BOE)?
Insurance is sold to small business owners to reimburse them for the overhead expenses after a disability
Are BOE premiums considered tax deductible?
Yes
Are BOE benefits taxable?
Yes
What is Disability buy-sell insurance?
The policy provides funds for the business organization to purchase the business interest of a disabled partner.
Are premiums paid for disability buy-sell insurance deductible?
No
Are benefits from disability buy-sell insurance tax free?
Yes
Are individuals covered by Medicare able to purchase health coverage off the ACA marketplace?
No.
What four standards are insurers allowed to base their premium rates on according to the ACA?
Geographic rating area (location of residence within the state);
Family composition (single or family enrollment);
Age
Tobacco use.
What is the guarantee issue in the ACA?
Insurance companies must accept any eligible applicant for individual or group insurance coverage.
How many days must the insurer provide when rescinding an individual or group coverage for reasons of fraud or an intentional misrepresentation of material facts by the insured?
30 Days
Can an insurer create a plan that restricts the dollar amount spent on essential benefits?
no
The ACA requires how much of the percentage of preventative care cost covered by the insurer?
100%
True or False: The Affordable Care Act (ACA) requires all individual and group health insurance plans be issued on a guaranteed issue basis.
True
