Terms

Question 1

FSA

Answer 1

Flexible Spending Account

• Sometimes a company will use it for self insured dental benefits.
• Has a ‘Use it or loose it’ requirement.
• Can only be used for qualified expenses.
• Minimum Balance: $25
• Maximum Balance: $2,500
• Min and Max change every year (sometimes)
• Tax deferred to a separate account.
• Employer decides is it maps to a plan year or calendar year.
• Grace period of 3 months (???)

Question 2

HSA

Answer 2

Health Spending Account

• No expiration date.
• Used with High deductible Health Plans.
• No Minimum required.
• Employer can make a contribution to the account.
• 55 and old max is $3,300.
• 55 have a ‘catch up year’ each year for + $1,000.
• Family max is $6,500, with +$1000 after 55 years old.
• Example: copays, eyeglasses.

Question 3

DCA

Answer 3

Dependent Care Account

• Requires a IRS approved dependent.
• Employer can make a contribution.
• Has a ‘Use it or loose it’ requirement.
• Grace period of 3 months.

Question 4

HRA

Answer 4

Health Reimbursement Account

• Can only be used for qualified expenses.
• Promise to pay by an employer.
• Used with High Deductible Medical Plans.
• No Cost to Employee.
• Maxwell used Care Coverage
• Can be setup for Co-Insurance or Copays.

Question 5

EOI

Answer 5

Evidence of Insurability - Term used to describe the requirement by an insurer before coverage commences. If an employee waives insurance when when offered then EOI is required, as the Insurer assumes there is a new health issue.

Question 6

Flat Rate Life Insurance

Answer 6

• Often Employer paid.
• Fixed number of coverage levels.
• EE picks one.
• When 100% paid by Employer, then everyone is auto rolled.
• Rates:
  
  • $/10k of coverage
  • Cost the same for 20 year old and 50 year olds.

Question 7

Salary Dependent Life Insurance

Answer 7

• Can be voluntary or employer paid.
• Benefit is a multiple of your salary. (2x, 5x salary)
• If Employer (Voluntary) then its age banded.
• If its 100% then is a set rate.
• Premiums are monthly.
• Option 1: Voluntary (How-to-Calc)
  * First calc the volume, using the Salary and the multiplier (2x , 5)
  * Then use the age to get the rate.
  * Then use the volume and the rate to determine the premium
• Option 2: Employer
  * First calculate the volume using the Salary and the multiplier
  * Then use the volume and the fixed rate per thousand.

Question 8

Incremental Life Insurance

Answer 8

• 10k to a Max
• Max can be a fixed amount or a multiple of EE salary.
• Increments can be in 1k or 5k.
• For Spouse - Can be set to a % of the employee rate or up to 100% of the EE election.
• Child Amount - Flat amount (ex 5k) or Flat 25% of EE.

Question 9

Guarantee Issue

Answer 9

Need Info