Types of Health Policies 10% Flashcards
1
Q
What is grouped into what is referred as Medical Expense Insurance?
A
Basic hospital, surgical, and medical policies
and also major medical policies
2
Q
How are the 3 basic coverages (hospital, surgical, medical) purchased?
A
separately or together
3
Q
Why are the 3 basic coverages (hospital, surgical, medical) referred to as FIRST-DOLLAR coverage?
A
they usually do not require the insured to pay a deductible
4
Q
What is covered in the Basic Hospital expense coverage?
A
hospital room and board and miscellaneous hospital coverages (lab, x-rays, medicine, operating room use and supplies) while insured is confined in hospital
5
Q
What is the deductible on Basic hospital expenses?
A
No deductible
6
Q
What is the limit for room and board set at?
A
set at a specified dollar amount per day up to a maximum number of days
may not cover full amount of charges incurred by insured
7
Q
Since miscellaneous coverage normally has a separate limit than the basic hospital expense coverage, what is the amount of coverage expressed as?
A
either as a multiple of the room and board charge or as a flat amount
8
Q
What other types of limits may be covered in Miscellaneous hospital expense?
A
may specify a maximum limit for certain types of expenses like drugs or operating room use
may also not cover all expenses incurred
9
Q
What does the Basic Medical expense coverage usually cover and what is it referred to as?
A
referred to as Basics physicians nonsurgical expense
and usually covers nonsurgical services a physician provides
and some pay for office visits
10
Q
What are the limits in the basic medical expense coverage?
A
benefits usually limited to visits to patients confined in a hospital
and usually limited to number of visits per day, limit per visits, or limit per hospital stay
11
Q
Is there a deductible for basic medical expense coverage?
A
No
12
Q
In addition to nonsurgical physicians expenses, basic medical expense coverage can also be purchased for what?
A
emergency accidental benefits, maternity benefits, mental and nervous disorders, hospice care, home health care, outpatient care, and nurses expense
13
Q
What is the difference between Basic Medical and Major Medical policies?
A
Basic medical only offers limited benefits that are subject to time limitations and may require the insured to pay a considerable sum of money for whatever expense aren’t fully paid off by the basic policy
14
Q
Which basic coverage is written in conjunction with Hospital expense policies?
A
Basic Surgical expense coverage
15
Q
What does the Basic Surgical expense coverage pay for?
A
costs of surgeons services, whether surgery is performed in or out of hospital
16
Q
What is covered in the Basic surgical coverage?
A
surgeons fees, anesthesiologists, and the operating room (when not covered by miscallaneous medical item)
17
Q
Is there a deductible for Surgical Expense coverage?
A
No, but coverage is limited
18
Q
Each contract for basic surgical has a surgical schedule list included, what is in that list?
A
the types of operations covered and their assigned dollar amounts
19
Q
What happens when a specific coverage is not listed? in surgical expense
A
contract may pay for a comparable operation
20
Q
What is in a Special schedule?
A
may express the amount payable as a percentage of the maximum benefit, lists a specified amount, or assign a relative value that when multiplied by it’s conversion factor gives the benefit payable
21
Q
What happens when a relative value approach is used in the special schedule on the basic surgical expense?
A
each surgical procedure will be assigned a number of points that are relative to that number of points assigned to the maximum benefit and that is what the insurer would pay
22
Q
What is covered in the Major medical policies?
A
offers a broad range of coverage
covers:
1) Comprehensive coverage for hospital expenses (room and board and miscellaneous expenses, nursing services, physicians services, etc.)
2) Catastrophic medical expense protection
3) benefits for prolonged injury or illness
23
Q
What limits are in the Major medical policies?
A
blanket limit for specific expenses stated in the policy
also a lifetime benefit per-person limit
24
Q
What are the fees that are carried in the Major Medical policies?
A
deductibles, coinsurance requirements, and large benefit maximums
25
What are the two types of Major Medical policies available?
Supplemental Major Medical policies
and
Comprehensive Major medical policies
26
What does the supplemetal major medical policies do?
used to supplement the coverage payable under a basic medical expense poicy
27
What does the supplemental policy cover?
cover expenses that weren't covered by the basic policy and expenses that exceed the maximum
and will also cover the the time limitations once the basic policy time limitations were used up
28
What deductibles are expected in the major medical expenses before coverage?
insured may pay a corridor deductible
| firstly, will not have to pay the basic expense deductible
29
What does a corridor deductible mean?
applied between the basic coverage and the major medical coverage
30
What is the Comprehensive Major Medical policies?
combination of basic coverage and major medical coverage that features low deductibles, high maximum benefits, and coinsurance
31
Which act forced employers with more than 25 employees to offer Health Maintenance Organizations (HMO) as an alternative to their regular health plans?
Health Maintenance Act of 1973
32
What is the main concept unique only to HMO's different from other services by insurance companies?
it provides both the financing and patient care for it's members
33
What are the benefits of the HMO?
provides benefits in the form of SERVICES rather than in the form of reimbursement for the services of the physician or hospital
34
What is stated in the 'Limited Service' area rule in the HMO?
HMO provides services to those living within the specific geographic boundaries (such as county or city limits) and those who don't live within the boundaries are ineligible for services
35
What is stated in the 'Limited Choice of Providers' section in an HMO?
HMO tries to limit costs by only providing care from physicians that meet their standards and are willing to provide care at a pre-negotiated price
36
Are copayments needed in an HMO?
Yes, the specific part of the cost of care or a flat dollar amount that must be paid by the member
37
What does the HMO operate on?
A capitated basis (prepaid basis)
38
How does the capitated (prepaid) basis function in the HMO?
HMO receives a flat amount each month attributed to each member, whether they see a physician or not
*it is a prepaid plan in essence*
As a member, they receive all services necessary from the member physicians and hospitals
39
What is the main goal of the HMO?
reduce the cost of health care by utilizing preventative care
40
What does the HMO hope when they offer preventative care (free annual check-ups for entire family, etc.)?
hope to catch diseases in the earliest stages, when treatment has the greatest chance of success
**offers free or low-cost immunizations to members
41
What happens when an individual becomes a member of the HMO?
they get to choose their primary care physician (gatekeeper)
42
What is happens with the Primary Care physicians?
The PCP or HMO will be regularly compensated whether care is provided or not
*should be in their best interest to keep this member healthy to prevent future time for treatment of disease
43
What must be done in order for a HMO member to get to see a Specialty (referral) Physician?
member must be referred
44
What does the referral system in an HMO do?
keep members away from higher priced specialists unless truly necessary
45
Why is a primary care physician more inclined to use alternative treatments before referring a patient to a specialist?
there is a financial cost TO the primary care physician
46
The HMO provides services for members with inpatient hospital care in or out of the service are, but may limit what types of treatment?
limited to treatment of mental, emotional, or nervous disorders including drug or alcohol rehab or treatment
47
If emergency care if being provided outside the service area, why would the HMO want to get the member back in the service area?
to reduce costs that can be provided by a salaried member
48
What is a PPO and what does it stand for?
PPO= Preferred provider organizations
is a group of physicians and hospitals that contract with employers, insurers, or third party organization to provide medical care services at a reduced fee
49
How do PPO's differ than HMO's?
first: they do not provide care on a prepaid basis but the physicians are paid a FEE FOR SERVICE
second: subscribers are not required to use physicians or facilities that have contracts with the PPO's
50
Why would a member of PPO be encouraged to use a physician agreed upon contract versus a not approved physician?
there are benefits that the approved physician will cost less, less out-of-pocket costs for in-network physicians, higher out-of-pocket costs for out-of-network providers
(ex: 90% of cost covered) rather than not an approved physician (ex: 70% of cost covered)
51
What is the Point-of-Service (POS) plan in essence?
merely a combo of HMO and PPO plans
52
What is the purpose of a POS plan?
offers a different choice between HMO or PPO that can be made every time a need arises for medical services
**employees do not have to be locked into one or choose between the two plans
53
What is another name POS plans may be referred as?
Open-ended HMO's
54
In POS plans, what do members have access to?
access to providers in a network that are gatekeeped and out-of-network physicians at reduced coverages
55
What is gatekeeping?
when primary care physicians control the provider network
56
What happens if a member of a POS plan seeks an out-of-network physician?
members's copays, coinsurance, and the deductibles may be substantially higher
57
In a POS plan, what happens when a member seeks services for a physician out-of-network?
attending physician will be paid a fee for service
but member will have to pay a higher coinsurance amount or percentage for the privilege
58
What is a cafeteria plan?
type of employee benefit plan that allows insured to choose between different types of benefits
59
What is a Flexible Spending account (FSA) plan?
a form of cafeteria plan benefit funded by salary reduction and employer contributions
60
How does the FSA plan work?
employees are allowed to deposit a certain amount of their paycheck into an account before paying income taxes and then during the year, employee can be directly reimbursed from this account for eligible health care and dependent care expenses
61
What are the two types of Flexible Spending Accounts?
Health Care Account (for out of pocket health care expense)
Dependent Care Account (subject to annual contribution limits) to help pay for dependent care expense
62
What is an FSA exempt from?
1) federal income taxes
2) Social Security (FICA) taxes
3) state income taxes
* **saving 1/3 or more in taxes
63
When isn't an employee in an FSA plan exempt from federal income taxes
when the plan favors them as highly compensated employees
64
What does the IRS control in Dependent Care accounts in FSA?
limits annual contributions to a specified amount that gets adjusted annually for cost of living (called family limit)
65
What is the family limit in the dependent care accounts?
both parents have access to flexible care accounts but combined contributions cannot exceed the amount stated by the IRS
66
When can changes be made or not made in an FSA accounts?
benefits may be changed during open enrollment, no other changes can be made during the plan year
67
What are the qualified changes that can be made in an FSA account?
1) Marital status
2) # of dependents
3) one of dependents becomes eligible for or no longer satisfies the coverage requirements under the Medical reimbursement plan for unmarried dependents due to attained age, student status, or any similar circumstances
4) Insured, spouse, or qualified dependents employment status changed that effects eligibility under the plan (at least 31 day break in employment)
5) change in dependent care provider
6) Family medical leave
68
What is featured in a High-deductible Health plan (HDHP)?
higher annual deductibles and out-of-pocket limits than traditional health plans but have lower premiums
69
What must be met before the HDHP plan before the plan will pay benefits?
annual deductible must be met first
70
What is the only care that can be provided BEFORE the annual deductible must be met in an HDHP plan?
preventative care (first dollar coverage or paid after copayments)
71
What is the HDHP plan used in coordination with?
Medical Savings Account (MSA) or
Health Savings Account (HSA)
Health Reimbursement Accounts (HRA)
72
What happens with the health accounts in the HDHP plans?
a portion of the health plan premium gets put into the accounts on a monthly basis which the insured can take out later for future medical expenses or medications
73
What are the Health Savings Accounts (HSA) designed to do?
to help individuals save for qualified health expenses that they, their spouse, or their depends incur
74
How are the HSA's funded and used?
funded by tax-deductible contributions from the insured
used to pay out-of-pocket medical expenses
75
Is the contributions in an HSA inclded in the individuals taxable income?
No
76
How can an individual be eligible for an HSA?
1) must be covered by a HDHP
2) not covered by other health insurances (except injury & accident, disability, dental, vision, long-term care)
3) not be eligible for Medicare
4) can't be claimed as a dependent on someone else's tax return
77
What are the established minimum deductibles a person may obtain under a qualified health insurance within an HSA?
$1,400 for singles
$2,400 for families
in 2020
78
What are the limits that a certain individual can contribute into an HSA each year despite plan's deductibles?
$3,500 singles
| $7,100 for families
79
What is the additional contributions in an HSA for taxpayers aged 55 or older?
$1,000 additional
80
What is the age an individual must be in order to open an account for HSA?
under age of medicare eligibility
81
What are the penalties an HSA holder pays who uses the money for a non-health expenditure?
tax plus 20% penalty
after age 65, withdrawal taxed but not penalized
82
What is Disability Income Insurance?
designed to replace lost income in the event of disablitiy and is a vital component of a comprehensive insurance program
83
How can disability income insurance be purchased?
purchased individually or through an employer on a group basis
84
What disability provision specifies the conditions that will automatically qualify the insured for full disability benefits?
Presumptive Disability
85
The presumptive disability benefit provides benefit for what?
a benefit for dismemberment (loss of use of any two limbs), total and permanent blindness, or loss of speech or hearing
***some policies require actual severance of limbs rather than loss of use
86
Which feature of a policy provision specifies the period of time (usually within 3-6 months) during which the recurrence of an injury or illness will be considered as a continuation of a prior period of disability?
Recurrent Disability
87
What is the significance of the Recurrent Disability feature?
the recurrence of a disabling condition will not be considered to be a new period of disability so that the insured is not subjected to another elimination period
88
What waiting period is imposed on the insured from the onset of disability until benefit payments commence?
Elimination Period
| deductible measured in days, instead of dollars
89
What is the purpose of the elimination period?
to eliminate coverage for short-term disabilities in which the insured will be able to return to work in a relatively short period of time
90
What happens when the elimination period is longer?
lower premiums
91
What is usually the range for elimination period?
30 to 180 days
92
Why is it important to take into consideration how long a person can go without coverage in case of disability in the elimination period?
payments made in arrears meaning payments can be paid later than when the individual becomes eligible for the coverage
93
Which type of period applies only to sickness and not accidents or injury? Disability income policies
Probationary period
94
What is a probationary period in disability income policies?
waiting period, often 10 to 30 days from policy issue date during which benefits will not be paid for illness-related disabilities
95
What is adverse selection?
individuals who are at greater risk for loss to purchase insurance to gain benefits
96
What is the purpose of the probationary period?
helps insurers protect against adverse selection, where an individual who would purchase a disability income policy shortly after developing a disease or other health conditions that warrants immediate attention
97
Which period refers to the length of time over which the monthly disability benefit payments will last for each disability after the elimination has been satisfied?
Benefit period
98
What modes do disability policies offer for benefit periods?
1 year, 2 year, 5 years, and to age 65, some offer lifetime benefits
99
What is the benefit period rule for longer benefit periods?
higher premiums
100
Injury is defined as what two definitions?
1) Accidental means
| 2) accidental bodily injury
101
What does Accidental bodily injury mean?
damage to the body is unexpected and unintended
102
What does Accidental means mean?
that the cause of the accident is unexpected and unintended
103
What is the difference if a policy uses accidental bodily injury versus accidental means?
accidental injury definition will provide broader coverage
104
What is the definition of sickness (illness) as relation to policies?
sickness or diseases contracted after the policy has been in force at least 30 days or that it firsts manifests itself after the policy is in force
105
What is Benefit Limitations?
are the maximum benefit limits the insurer is willing to accept for an individual risk
106
What are the benefit limits based on?
percentage of insureds past earnings
**roughly 66% for most policies (on the insureds average income for the period of 2 years before disability)
107
Since most disability income policies don't pay 100% of lost income, what is the purpose of the insurer paying less than the full amount of the individual's income?
to give the insured the incentive to recover and go back to work versus collecting benefits when they are capable of working
108
What happens in a disability income policy if an individual is also receiving benefits from Social Security or Workers Comp?
insurer will decrease amount paid under policy so the insured can't profit
109
What is Social Insurance Supplement (or Social Security riders) used for?
supplement or replace benefits that may be payable under social security disability
and also under other social insurance programs or workers comp
110
In what situations do the SIS or Social security riders pay benefits?
1) when insured is eligible for social security benefits but before the benefits being (usually 5 month waiting period for Social security)
2) If insured has been denied coverage under social security (roughly 75% get denied because of strict definition)
3) when the amount payable under social security is less than the amount payable under the rider (only the difference will be paid)
111
In what cases does disability income policies not provide coverage?
losses arising from war, military service, intentionally self-inflicted injury, overseas residence, or injuries suffered while committing or attempting to commit a felony
112
Since businesses can also be protected using the disability income policies, what are the 3 types of disability incomes policies for businesses?
1) Business overhead expense
2) Key person disability
3) Disability Buy-Sell insurance
113
Which insurance policy is sold to small business owners who must ontinue to meet overhead expenses such as rent, utililities, employee salaries, etc. following a disability of the owner?
Business overhead expense
114
What is covered and not covered in the BOE policy to the owner?
benefit paid to the actual overhead expense incurred during disability
**not the salary, income, or compensation of the owner
115
What are the limitations in the BOE policy?
benefit payments are limited to 1 to 2 years
benefits limited to covered expenses incurred or the maximum monthly benefits stated in the policy
116
What is the usual elimination period to the BOE insurance policy?
15 to 30 days
117
What happens to the payments and benefits received in a BOE policy?
premiums paid are tax deductible as a business expense
benefits received are taxable to business as received
118
What agreement is a legal agreement prepared by an attorney and specifies how the business will pass between owners when one of the owners dies or becomes disabled?
A Buy-Sell agreement
119
Which agreement specifies who will purchase a disabled partners interest and legally obligates that person or party to purchase such interest upon disability?
Disability buyout agreement
120
What are the elimination periods for both a Buy-Sell agreement and Disability buyout agreement?
1 to 2 years (extremely long)
121
Which agreement between the Buy-Sell and Buyout provide a lump sum benefit?
Both
122
What happens to the benefits and premiums in the Buy-sell insurance?
Premiums are not tax-deductible
benefits are received tax free
123
Which type of policy is purchased by the employer on the life of a key employee?
Key Employee Policy
124
How is a key person's economic value to the business determined?
in potential loss of business income which could occur as well as the expense of hiring and training a replacement for the key person
125
What is the rule of the Key Employee Policy?
Contract owned by business, premium paid by business, and business is beneficiary
126
Does the business in a Key Employee policy need to have the key person's consent to be insured in writing?
Yes, the employee is the insured
127
What is one common way Group plans differ from individuals on the benefits paid?
Group- benefit based on percentage of workers income
Individual- specify a flat amount
128
What is a difference between Short-Term group and individual plans in terms of benefit periods?
Group- maximum period of 13 to 26 weeks (w/ weekly benefits of 50% to 100% of individuals income)
Individual- maximum period of 6 months to 2 years
129
What is a difference between Long-Term group and individual plans in terms of benefit periods?
Group- max periods of more than 2 years w/ monthly income of 60% of individuals income
130
What is the typical requirement period for individuals to become eligible for group plans?
minimum participation requirements, usually 30 to 90 days
131
Which coverage, written as seperate policy or rider, provides for the payment of a lump sum benefit, in event the insured dies from an accident defined in policy, or in event of loss of certain body parts caused by accidents?
Accidental Death and Dismemberment (AD&D)
132
Which insurance is considered a pure form of accident insurance and why?
AD&D because coverage only pays for accidental loss
133
What is paid in accidental death in the AD&D coverage?
Principal sum, amount usually equals amount of coverage under insurance contract, or the face amount
134
What is paid in event of loss of sight or accidental dismemberment?
A capital sum, or percentage of principal sum
**amount varies according to severity
135
What is the payment amount in loss of two different body parts versus one of different parts?
full principal for loss of both types of limbs or sight of eyes
50% for one of limbs or sight of one eyes
136
What could happen in payments in case of accidental death?
policy could pay double or triple indemnity (face value)
137
What is the time period that death (caused by accident) must occur within for the accidental death benefit to be paid?
within 90 days
138
What are the 2 special types of policies that pay accidental death and dismemberment benefits only under specific circumstances?
Limited Risk Policy and Special Risk policy
139
Which policy defines the specific risk in which accidental death or dismemberment will be paid?
Limited Risk Policy
| i.e. travel accident policy- only pays when accident occurs during travel
140
Which policy covers unusual types of risks that are not normally covered under AD&D policies (covers specific hazard or risk identified in policy)?
Special Risk Policy
**e.x. racecar driver test-driving a new car
141
What policy provides coverage for individuals who are no longer able to live an independent lifestyle and require living assistance at home or in a nursing home facility?
Long-term care (LTC) policies
142
How can LTC's be marketed?
Individual policies, group policies, or riders to life insurance
143
What do LTC poliicies coverage vary in?
days of confinement covered, # of home health visits covered, amount paid for nursing home care, and other contract provisions
144
What is the elimination period in LTC policies?
similary to disability income policies, usually 30 days or more which insured must be confined in a nursing home facility before benefits will begin
145
The LTC policies define the benefit period for how long coverage applies after elimination period, what is the benefit period?
usually 2 to 5 years, with few offering lifetime coverage
146
What happens with premiums when the benefit period is longer?
higher premiums will be charged
147
What is the benefit amount in an LTC polilcy?
a specific dollar amount per day regardless of actual cost of charge
148
Are LTC policies guaranteed renewable?
Yes, also insurers have the right to increase the premiums
149
What are the three levels of care that can be covered in a Long Term care (LTC) policies?
Skilled nursing care, intermediate care, and custodial care
150
In addition to the level of care provided in LTC, what other coverage can be provided?
Home Health Care
Adult day care
Hospice Care or Respite Care
which can be received at home
151
What is Skilled Care in LTC policies?
Daily nursing and rehab care that can only be provided by medical personnel, under the direction of a physician
152
Where is Skilled care almost always provided?
an Institutional setting
153
What is not considered Skilled Care?
care given by a nonprofessional staff
154
What is Intermediate care? LTC policies
occasional nursing or rehab care provided for stable conditions that require daily medical assistance on a less frequent basis?
155
How does the Intermediate care in LTC operate?
ordered by a physician, skilled medical personnel would deliver or monitor this type of care
156
Where can Intermediate care be carried out in?
Nursing home, an Intermediate care unit, or in patients home
157
What is custodial care?
meeting personal needs such as assistance in eating, dressing, or bathing which can be provided by non medical personnel, such as relatives or home health care workers
***involves caring for a persons activities of daily living, and not hospital or surgical needs
158
Where can Custodial care be provided in?
an Institutional setting or in patients home
159
What is home health care?
care provided by a skilled nursing or other professional services in one's home
160
Home Health care can include what?
occasional visits to person's home by registered nurses, licensed practical nurses, licensed vocational nurses, or community-based organizations like hospice
also different types of therapy by a social worker
161
What is Home convalescent care?
provided in the insured's home under a planned program established bis their attending physician, and must be provided by a long-term care facility, a home health care agency, or hospital
162
What is Residential Care?
provided while insured resides in retirement community or a residential care facility for the elderly
163
Who are Residential care facilities most common to?
middle or upper class because of costs
164
What is Adult day care?
care provided for functionally impaired adults on less than 24 hours basis
165
How could Adult Day care be provided?
by a neighborhood recreation center or community center
166
What is included in Adult Day care?
includes, transportation to and from the day care center, and a variety of health, social and related activities
**meals are usually included as part of service
**respite care can be provided as well
167
What is Respite Care?
designed to provide relief to the family caregiver like someone coming home while caregiver takes a nap
168
What is an advantage to Individual LTC contracts?
1) state regulation of LTC plans
2) guaranteed renewability
3) ability to customize plan to individuals own needs
169
What is an advantage of Group LTC contracts?
1) offer lower rates
2) less underwriting
* *allowing someone who might be denied individual coverage to enroll in open enrollment periods
3) are voluntary
170
What are the disadvantages in Group LTC contracts?
1) not all states regulate group LTC
| 2) many group plans do not offer employer contributions to premiums
171
How can a group qualify for group coverage?
Group must be form for a purpose other than just obtaining insurance (coverage must be incidental to the group)
172
What are the 2 types of group insurance?
Employer-sponsored
| Association-sponsored
173
What is employer-sponsored group insurance?
the employer (partnership, corporation, or sole-proprietorship) provides coverage to it's employee
**may be either contributory or noncontributory
174
What is the requirement an individual must meet before becoming eligible for participating in the Employer-sponsored group?
meet certain time of service requirements and work full-time
175
What is an association-sponsored group insurance?
an association group (alumni or professional) can buy group insurance for it's members
***and may be either contributory or noncontributory
176
What are the requirements a group must meet for Association-Group insurance?
1) must have at least 100 members
2) be organized for a reason other than buying insurance
3) have been active for at least 2 years
4) have a constitution
5) have by-laws
6) must hold at least annual meetings
177
What are some examples of Association groups for insurance?
```
Trade associations
Professional associations
College Alumni associations
Veteran Associations
etc.
```
178
What happens with contract copies (proof of insurance) in Group Health Insurance?
the master contract (actual policy) is issued to the group sponsor
the individual insureds are issued certificates of insurance as proof of coverage
179
What are the provisions in Group Health that are similar to Group life?
1) ability to provide coverage for dependents
| 2) right to convert to individual coverage if group contract is terminated
180
Why is the underwriting process in group policies unique?
when policy is written, every eligible member of the group must be covered regardless of physical condition, age, sex, or occupation
***underwriting concentrates on the group as a whole, not individuals
181
What is the price in group health policies based on?
will vary by the ratio of males to females and the average age of the group
182
Why isn't evidence of insurability normally not required in Group Health?
an annual reevaluation makes adjusting of the premium possible based upon the group claim experience
183
How is individual health contracts different from group?
1) are issued to cover the applicant and usually dependents
2) most are issued guaranteed renewable
3) factors included are the individuals age, gender, physical condition, occupation, habits, or lifestyle
184
How is group health contracts different from individual?
1) underwriting can be less restrictive
2) the yearly renewable term contract under which the insurance is written contemplates annual reevaluation of the risk and adoption of remedial measures if initial evaluation proved to be incorrect
3) underwriting written on group as whole
4) on each contract anniversary dates, insurer can change: premium rate, conditions of contract, benefits provided
185
What does COBRA stand for?
Consolidated Omnibus Budget Reconciliation Act of 1985
186
What does COBRA do?
requires any employer with 20 or more employees to extend group health coverage to terminated employees and their families after qualifying events
187
What are the qualifying events in COBRA?
1) voluntarily termination of employment
2) termination of employment for reasons other than gross misconduct
3) employment status change: from full time to part time
188
How long is coverage extended to after the qualifying events in COBRA?
18 months
189
What time frame must an employee exercise extension of benefits under COBRA after separation from employment?
within 60 days of separation
190
What rate can an employer collect of a premium from the terminated employee?
at a rate of no more than 102% of the individuals group premium rate
** the 2% charge is to cover the employers administrative costs
191
What is the period of extension for the dependents of an employee who has died, legal separation or divorce?
36 months
192
What type of insurance does COBRA apply to?
Only group health not individual
193
What does COBRA do instead of the conversion policy?
continues the same group coverage the employee has and the employer pays the group premium that the employer paid (or pay amount if contributory)
194
At what age are the eligible dependents of the insured covered for?
age of 26
195
After a dependent of COBRA reaches the loss of dependent child status, what is the maximum period coverage can continue for?
36 months
196
What are the disqualifying events in which COBRA benefits may be discontinued?
1) failure to make premium payments
2) becoming covered under another plan
3) becoming eligible for Medicare
4) employer terminates all group health plans
197
What must a contract providing limited coverage for sickness or accidents specify?
types of accidents or sickness covered
limited perils and amounts of coverage
and benefits may be paid on an expense-paid (reimbursement) basis or indemnity basis
198
What are Short-term medical insurance plans designed for?
to provide temporary coverage for people in transition (those between jobs or early retirees) and are available for terms from one-month up to 11 months depending on the state
199
What is the difference between Short term medical plans and individual major medical plans?
short term:
1) not regulated by ACA
2) enrollment is not limited to open enrollment period
3) also do not meet requirements of the federally mandated health insurance coverage
200
What do Short-term plans have that traditional health plans may not?
1) medical provider networks
2) impose premiums
3) deductibles
4) coinsurance
5) benefit maximums
6) also cover physician services, surgery, outpatient and inpatient care
201
What policies are limited polices that provide coverage for death, dismemberment, disability or hospital and medical care resulting from an accident.
Accident-only policies
202
What is covered in the Critical Illness policy?
multiple illnesses, such as heart attack, stroke, renal failure, and pays a lump-sum benefit to the insured upon the diagnosis (and survival) of any of the illnesses covered by the policy
203
What does the Critical Illness policy specify?
minimum number of days the insured must survive after the illness was first diagnosed
204
What does the Accident-only policy pay for?
only pays for losses resulting from accidents and not sickness
205
What is covered in the Cancer policies?
ONLY cancer
206
What is the payment type in the Cancer policies?
pays a lump-sum cash benefit when the insured is first diagnosed with cancer
207
What is the cancer policy intended to do?
to fill in the gap between the insured's traditional health coverage and the additional costs associated with being diagnosed with the illness
208
How can the insured spend the funds in the Cancer policy considering it isn't restrictive?
the benefit can be used to pay for medical bills, experimental treatments, mortgage, personal living expenses, loss of income, etc.
209
Which policy provides a specific amount on a daily, weekly, or monthly basis while the insured is confined to a hospital?
Hospital Indemnity
210
What is the payment on the Hospital Indemnity based on?
unrelated to the medical expense incurred, but based only on the number of days confined in a hospital
***also called a hospital fixed-rate policy
211
What is Dental Expense insurance?
a form of medical expense health insurance that covers the treatment, care, and prevention of dental disease and injury to the insureds teeth
212
What is an important feature of dental insurance not typically found in medical expense insurance plan?
the inclusion of diagnostic and preventative care (teeth cleaning, fluoride treatment, etc)
***some plans require periodic examinations as a condition for continued coverage
213
What is the type of deductible if the dental expense is packaged or integrated with other health insurance benefits like major medical?
common deductible
214
What type of dental coverage is an essential health benefit under the ACA that MUST be available as part of a health plan or a stand-alone plan for children 18 or younger?
Pediatric dental coverage
215
What type of dental coverage do insurers not have to offer?
Adult dental coverage
216
Depending on state, pediatric dental benefits can be offered through one of the following types of plans?
1) A qualified health plan that includes dental coverage
2) a stand-alone dental plan purchased in conjunction with a qualified health plan
3) a contract/bundled plan
217
What type of plan do employers provide to their employees to cover eye examinations and eyeglasses, or hearing aids on a limited basis?
Vision and Hearing plans
218
Per the ACA, what is mandatory in the Vision and Hearing plans?
Pediatric vision benefits
