Risk Management/ Insurance Planning Flashcards
HSA annual contribution limit - self only
$3650
HSA annual contribution limit - Family
$7,300
HSA contribution catch up age and $ amount
55+ $1000
Risk Management: High Frequency & High Severity
Avoid
Reduce
Risk Management: High Frequency & Low Severity
Retention or reduction
Risk Management: Low Frequency & High Severity
Transfer (insure)
Risk Management: Low Frequency & Low Severity
Retention
HSA Last month rule
If eligible under HDHP on the fist day of the last month of the tax year, they may fund HSA as if eligible for entire year
HSA minimum deductible: Self only
$1,400 (2022)
HSA minimum deduction: Family
$2,800 (2022)
HSA maximum out of pocket: self only
$7,050 including deductible, co-pays, and other amounts,
Not including premiums
HSA maximum out of pocket limits: Family
$14,100
Including deductible, copays, and other amounts.
NOT including premiums
Can you contribute to an HSA if you enroll in Medicare?
No
Rules for IRA transfer into an HSA
May make one (lifetime) direct transfer from IRA to fund HSA up the annual a limit for that year (minus contributions for that year)
LTC Insurance Locations
Facility: (highest to lowest level of support)
Nursing Home Care (Private/Semi-Private)
Assisted Living Facility (ALF)
Community:
Adult Day Health Care (ADC)
Home:
Home Health Aide Services
Homemaker Services
Features of LTC services: Nursing Home Care and Assisted Living Facility
Nursing Home Care:
residential, higher level than ALF
personal care, health support, rehabilitation, medication, 24-hour
Assisted Living Facility:
Residential
Personal care
Health support
Features of LTC services: Adult Day Health Care (ADC)
Residential
Socialization, structure, supervision
May include medical management
Features of LTC services: Home Health Aide Services and Homemaker Services
Home Health Aide Services:
Personal care, non-medical
Hands-on approach
Homemaker Services:
Household tasks & errands
hands-off approach
LTC Insurance and Medicare
Medicare does NOT pay for long-term custodial care.
LTC Insurance Features & Benefits
Benefit period: time that LTC benefits will be received (e.g., 2, 5 years, lifetime) or pool of money options
Elimination period: The waiting period before benefits become available, ranges from 0-365 days.
Daily Benefit: Maximum amount that a policy will reimburse for daily LTC services. Set at policy inception according to a benefit schedule.
Riders: Add-on features. Inflation protection is most important.
Waiver of premium: Insured does not have to pay premiums while receiving benefits.
Renewability: Most individual LTC policies are guaranteed renewable
Exam tip: Benefits are “dials” that can be turned to increase benefits or decrease premiums, e.g., the insured may elect a longer elimination period to be able to afford higher daily benefits.
Qualified LTC Insurance - Required features
- Benefits payable only for qualified LTC services
- Contract must be guaranteed renewable
- Contract does not pay or reimburse expenses reimbursable under Medicare
- Contract does not provide for a cash surrender value
- Policy dividends must be applied to as a reduction in future premiums or increase future benefits
- Limitations and exclusions are prohibited (except pre-existing within 6 months of application)
- Contract cannot provide for skilled nursing care only or require prior hospitalization
- Contract must have 2-year incontestable clause for misrepresentation
Qualified LTC insurance Tax benefits
- Benefits are received tax-free up to an annual limit (‘22 - $390/d or $142,350)
- Premiums paid are a qualified medical expense for the itemized deduction for medical expenses - 7.5% AGI
- Premiums can be paid from HSA
- Premiums paid by employers are tax-free to employees and benefits remain TAX-FREE
Qualified LTC Benefits triggers
- Unable to perform 2 of 6 ADLs for 90+ days
- Substantial cognitive impairment
- Dr. certification needed for both
LTC ADLs
(BEDCOT:)
Bathing
Eating
Dressing
Continence
On ← → off toilet
Transferring
OR:
Substantial Cognitive Impairment
A doctor’s certification of condition(s) is required for qualification
LTC Asset Protection Benefit is provided through____?
Partnership Long-Term Insurance:
= Partnership between states and insurance companies for qualified LTC insurance
- provides additional asset protection if LTC insurance is exhausted and insured files for Medicaid
- total amount paid under LTC insurance is added to Medicaid spend-down limit and protected
Taxation of Disability Income Insurance Benefits
Employer Paid Premiums: benefits TAXABLE to insured
Employee Paid Premiums:
if paid with AFTER-TAX dollars, benefits are TAX FREE
if ER pays premium but includes premiums as compensation to the EE, benefits are TAX FREE
if paid with PRE-TAX dollars, benefits are TAXABLE
What are qualifying expenses for an HSA?
- OTC & prescription medication
- dental
- vision
- LTC premiums
What employer must offer COBRA coverage?
20 or more FT employees in prior year
What is the maximum cost of COBRA coverage?
102% of ER and EE cost combined
P.L.U.P.
Personal Liability Umbrella Policy
COBRA Qualifying Events
- Death of the covered employee
- The termination of the employee for any reason EXCEPT gross misconduct
Qualified events quitting retiring or being fired for anything but gross misconduct - A reduction in the employee’s hours so that the employee or dependent is ineligible for coverage
- The divorce or legal separation of the covered employee and his or her spouse
- For spouses and children, the employee’s eligibility for medicare
- a child ceasing to be an eligible dependent under the plan
Who are the qualified beneficiaries for COBRA after termination (for any reason other than gross conduct) or reduction in hours of employment?
Employee
Spouse
Dependent Child
Who are the qualified beneficiaries for COBRA after an Employee or a qualified beneficiary meets the Social Security definition of disability?
Employee
Spouse
Dependent Child
