Section 4 - Health, Accident, and Retirement Benefits Flashcards
What are the types of health care plans offered by employers to their employees?
Traditional Health Insurance Plan
Health Maintenance Organizations (HMO)
Preferred Provider Organization (PPO)
What is the traditional health insurance plan?
The employer either purchases and insuracne policy from a third-party insurance carrier or self-insures and pays claims to employees or health care providers frrom it’s own insureance fund.
What is HMO?
Health Maintenance Organizations
An HMO is a health care system that provides health care, but does not directly pay for it. The HMO provides these health care services on a prepaid basis with employers contributing to the plan.
What are the 2 types of HMO?
- Traditional
- Individual Practice Association (IPA)
What is Traditional HMO?
The HMO has its own healthcare facilities and patients have to go to the HMO’s facility for medical services.
What is Individual Practice Association HMO?
Physicians sign up with a health care group and patients have the options of choosing their own physicians among those in the group.
What is PPO?
Preferred Provider Organizations
Participants utilizing health care providers in the network (preferred providers) receive a higher level of benefits and lower out-of-pocket costs.
Participants who utilize health care providers outside the network typically have higher deductivles and co-payments.
What is POS?
Point-of-Serivce plan
Employees and dependents can use non-HMO health care providers but deductibles and co-payments are applicable.
What is PCP?
Primary Care Physician
a PCP must be selected from the network. The PCP acts as a gate keeper and oversees the deliver of all health care services.
Are employer-paid premiums excludable from income?
Yes, generally contirbutions mdae by an employer to an accident or health insuracne plan providing insurance for ist employees and dependents are not wages are not subject to FIT, SS, Medicare, or FUTA taxes.
Are employee’s contributions to insurance plans included in their income?
Yes, contributions made by employees from wages for welfare and insuracne plans must be included in their income for tax withholding and employment tax purposes.
What is the PPACA?
Patient Protection and Affordable Care Act
Coverage of adult childre through age 26 (non-taxable benefit & pre-tax deductions)
Are over-the-counter drugs covered by FSA/HRA/MSA?
Not unless a physician has written a prescription for it
What is MSA?
Medical Savings Account
- for small employers
- health insurance plan must have high deductible
- MSA cannot be part of a 125 cafeteria plan
What does COBRA stand for?
Consolidated Ominibus Budget Reconciliation Act
What does the Consolidated Ominibus Budget Reconciliation Act of 1985 require?
Requires health plan sponsors to provide employes and their beneficiaries with the opportunity to elect contiued group health insurance for a given time period should their coverage be lost due to certain qualifying events.
What is Long Term Care Insurance?
Generally treates as accident and health insurance contracts. Therefore, amounts received under such contracts are excluded from income as amounts received for personal injuries and sickness and reimbursements for medical expenses.
What are COBRA qualifying events?
- employee’s termination (18 months of coverage)
- death (36 months of coverage)
- divore or separation (36 months of coverage)
- entitlement of coverd employee to Medicare benefits (36 months of coverage)
- dependent child losing status (36 months of coverage)
- Employer bankruptcy (36 months of coverage)
What are COBRA premiums?
Employees and/or beneficiaries pay monthly premiums.
Employers can routinely require premiums of up to 102% of costs.
What are the COBRA notification requirements?
Employers must advise employees of COBRA rights when they become first covered.
If event is death, termination, reduction in hours, Medicare emtitlement, or employer bankruptcy must notify w/ 30 days
If event is divorce, separation, or dependent child’s loss of stauts, must notify w/ 60 dyas.
What are Health Reimbursement Arrangements?
Employer-provided health benefit (employee does not contribute), not par of a 125 cafeteria plan.
Employee is reimbursed by the employer for the employee’s and dependents medical care expenses up to a maximum.
Reimbursements are excluded from the employee’s gross income.
What is a Health Savings Account?
HSAs are for individiuals with a high deductible health plan.
Contributions, up to a maimum, are excluded from the employee’s gross income.
Can be a part of a 125 cafeteria plan.
What is FMLA?
Family and Medical Leave Act of 1993
FMLA guarnatees employees 12 weeks of unpaid leave in a year to be witha new born or newly adopted child, to take care of a seriously ill child, spouse or parent or to care for themselves if they are seriously ill.
Guarantees the continuation of the employee’s health benefits while on leave.
When must an employer comply with FMLA?
Employers with 50 or more employees must comply with FMLA. If the employee is in a work place with fewer than 50 employees but there are 50 or more emaployees in a 75 miles radius, they must comply.
