Types Of Health Policies Flashcards
Medical Expense Insurance is made up of
Basic hospital, surgical, and medical policies and the Major Medical Policies
Basic coverages (hospital, surgical, medical) can be purchased how
Separately or together In a package
First dollar means the same as
No deductible
What does Basic Hospital Expense Coverage cover
Hospital room and board, lab and x-day expenses, medicines, use of operating room and supplies, while the insured is confined in a hospital
Basic Medical Expense Coverage covers what (also refers to as Basic physicians nonsurgical expense coverage)
Provides coverage of nonsurgical services a physician provides. Benefits are limited to visits to patients confined in the hospital.
How is basic medical coverage limited
Usually by number of visits per day, limit per visit, or limit per hospital stay.
Basic medical and also be purchased to cover
Emergency accident benefits, maternity benefits, mental and nervous disorders, hospice care, home health care, outpatient care, and nurses expense.
Basic surgical expense coverage is often written in conjunction with hospital expense policies. This covers
Cost of surgeon services, performed in or out of the hospital. No deductible but coverage is limited
Major medical policies usually provide for
- Comprehensive coverage for hospital expenses ( room and board, and miscellaneous expenses, nursing expenses, physicians services )
- Catastrophic medical expense protection
- Benefits for prolonged injury or illness.
Supplemental major medical policies are used to supplement the coverage payable under a basic medical expense policy. Before the supplemental coverage takes place after basic medical has pays, the supplemental takes effect:
On a first dollar basis( no-deductible) but a corridor deductible must be paid after basic expenses are exhausted and before supplemental picks the the remaining cost.
The Health Maintenance Act of 1973 helped develop Health Maintenance organizations (HMOs). The act forced
Employers with more than 25 employees to offer the HMO as an alternative to their regular health plans.
The main goal of the HMO act was
Reduce the cost of health by utilizing preventative care
HMO’s offer free
Annual check ups and free or low cost immunizations
HMO provide benefits in the form of
Services, rather than reimbursement for services. It provides both financing and patient care
HMOs are organized geographically. That means
If you live within the geographic limitations for an HMO, you are eligible, if not, you are ineligible
HMOs have a limited choice of providers. The purpose of this is
To limit costs by only providing care from physicians that meet their standards, and provide care at a pre negotiated price
HMOs also require copayments. This payment is required to paid for
Each visit
HMOs operate on a capitated basis. This means
The HMO receives a flat amount each month attributed to each member WHETHER YOU SEE A PHYSICIAN OR NOT
HMOs have 4 general characteristics
- Limited Service Area
- Limited Choice of Providers
- Copayments
- Prepaid Basis
Primary Care Physician or gatekeeper is chosen
When a person becomes a member of an HMO.
What kind of care does an HMO provide other than preventative
Inpatient hospital care in or out of the HMOs service area.
Inpatient hospital care of an HMO my be limited for what conditions
- Treatment of mental disorders
- Emotional disorders
- Nervous disorders
Including alcohol or drug rehabilitation of treatment
Can emergency care by an HMO be given to someone outside for the service area?
Yes. Emergency care must be given to a member both in and out of the service care area.
Preferred Provider Organizations (PPOs), rather pay physicians on a salary basis like HMOs
Pay physicians on paid fees for services.
PPO encourage members to visit approved member physicians in the form of
Benefits. The PPO may provide 90% of the cost to members who see an approved physician, as compared to 70% for a physician not on the list.
A group of physicians and hospitals that contract with employers, insurers, or third party organizations to provide medical care for services at a reduced fee is
A PPO
What are two ways PPOs differ from HMOs
- PPOs do not provide service on a prepaid basis, but paid a fee for service
- Subscribers are not required to use physicians or facilities have have contracts with PPO
Open panel means
When a medical caregiver contracts with a health organization to provide services to its member or subscribers, but retains their right to treat patients who are not members or subscribers
When the medical caregiver provides services to only members or subscribers of a health organization and contractually is not allowed to treat other patients is referred to as
A closed panel
Point of Service plans (POS) plans
Are combination of HMOs and PPO plans
In a PPO all network providers are considered
“Preferred” and you can visit them, even specialists, without first seeing a primary care physician. (called PCP referrals)
A form of cafeteria benefit plan funded by salary reduction and employer contributions. Employees are also allowed to deposit a certain amount of their paycheck into an account before paying income tax. Benefits are on a use it or lose it basis
Flexible Spending Account (FSA)
2 types of Flexible Spending Accounts
- Health Care account for out-of-pocket health care expenses
- Dependent Care Account
FSA ARE exempt for what kind of taxes
- Federal Income Taxes
- Social Security (FICA) taxes
- In most cases, state income taxes
If an FSA plan favors highly compensated employees, the benefits for those employees are or are not exempt from taxes?
Are NOT exempt from federal income taxes.
These things qualify a child or dependent care for be covered by an FSA
- A dependent who under the age of 13 AND can be claimed as an exemption on the employee’s Federal Income Tax return
- A spouse who is physically or mentally not able to care for him or her self
- A dependent who was physically or mentally not able to care for him or her self and can be claimed as an exemption
One can change benefits during the open enrollment period in an FSA if one of these 6 events happen (qualified life event)
- Marital status
- Number of dependents
- One of dependents satisfies or ceases to satisfy requirements for coverage
- Change of employment
- Change in dependent care provider
- Family medical leave
Contribution to Dependent Care Accounts are limited by
The IRS. ($5000 for family limit, $2500 for married employee filing separately)
Funds set aside by employers to reimburse employees for qualified medical expenses are
Health Reimbursement Accounts (HRAs)
A key characteristic or an HRA is
They are contribution healthcare plans, not defined benefit plans
Not a taxable employee benefit
Employees can rollover unused balances at the end of the year
Eligibility and contribution limits for HRAs are determined by
The employer, not matter the size
High Deductible Health Plans have
Higher annual deductibles and out of pocket expenses which has a lower premium
In order to be eligible for Health Savings account (HSA)
And individual must be covered by a HDHP, and must not be covered by other insurance
An HSA holder that uses the money for a nonhealth expenditure pays tax on it plus a penalty. What is that penalty?
20% penalty for funds withdrawn before 65. After 65 no penalty, just tax for nonhealth uses
This type of insurance provides coverage to employers who self insure or self fund their employee coverage. Claims are laid from own funds. Once that limit is reached they don’t have to pay anymore
Stop loss insurance
This is designed to replace lost income in the event of this contingency and is a vital component of a comprehensive insurance program
Disability Income insurance
A provision found in most disability income policies that specifies conditions that will automatically qualify the insured for full disability benefits. Provides benefits for dismemberment (of any two limbs) total and permanent blindness or loss of speech or hearing
Presumptive disability
This is generally expressed in a policy provision specifying the period of time (3-6 months) during which the recurrence of an injury or illness will be considered as a continuation of a prior period of disability. This means the disabled will not have to endure another elimination period
Recurrent disability
The waiting period that is imposed on the insured from the onset of the disability until benefit payments commence.
The elimination period
What is the purpose of the elimination period
To eliminate coverage for short term disability in which the insured will be able to return to work in a relatively short period of time
The range of most elimination polices is between
30 and 180 days
The longer the elimination period means
The lower the premium
Waiting period, often 10 to 30 days from the policy issue date where benefits will not be paid for illness-related disabilities. Accidents will still be provided for
Probationary period
True or False
The Probationary Period under some policies is an additional waiting period after the Elimination period
True
What is the purpose of the probationary period
Reduces chances of adverse selection agains the insurer
Most common types of benefit periods
1 year, 2 years, 5 years, and to age 65
True or False
Most insurers will not adjust benefits according to amounts the insured might be receiving from Social Security or Workers’ Compensation
False, the insurer will adjust benefits according to amounts received from Social Security or Workers’ Compensation
What is the purpose of Social Security Riders
Supplement or replace benefits that might be payable und Social Security Disability
Social Security riders provide payment under what situations
- When an insured is eligible for social security benefits but before the benefits begin
- If insured has been denied coverage under Social Security
- When amount payable under Social Security is LESS than the amount payable under the rider
Disability income polices generally do not cover loses from
- War or military service
- Intentionally self-inflicted injuries
- Overseas residence
- Injuries suffered while committing a felony
What are three types of disability policies used for businesses
- Business Overhead Expense Policy
- Key Person Disability
- Disability Buy-sell
This is sold to small business owners to help pay rent, utilities, employee salaries, installment purchases, leased equipment, etc following a disability
Business Overhead Expense Policy
Business Overhead Expense policies have an elimination period of
15-30 days
BOH expense polices do not cover
Reimbursement of the owners personal salary or compensation of income
In BOH expense polices premiums are ______ and benefits are _______
Tax-deductible; taxable
True or False
Disability Buyout policies generally have really long elimination periods
True, sometimes 1-2 years
Disability buyout specifies what
Who will purchase a disabled partners interest, and legally obligates them to do so
Disability buyout policy premiums, regarding taxes, are
Not tax deducible
Disability buyout policy benefits, regarding taxes, are received
Tax free
Groups disability plans differ from individual plans in these ways
- Benefits are specified on percentage of worker income, individual is a flat amount
- Short term have max benefit plans of 13-26 weeks, individual have 6months to 2 years
- Long term benefit plans max benefit period of more than 2 years and monthly benefits 60% of income
- Employees must have worked 30-90!days to be eligible
- Some limit coverage to nonoccupational disabilities only
In Key person disabIlity, who is the owner of the policy, pays the premium, and is the beneficiary
The business
This is written as a rider or as a separate policy. Most frequently part of life and group health plans. Lump sum benefit payment plan in the event of accidental death or loss of certain body parts caused be accident
Accidental Death and Dismemberment
This is the sum paid out for accidental dear under AD&D
Principal sum
This is the sum paid out to loss of sight or accidental dismemberment and is a percentage of the principal sum
Capital sum
Full death benefits will be paid under AD&D as long as the death occurs within
90 days of the accident
Long-Term Care policies provide care for whom
Individuals who no longer can live an independent lifestyle and require living assistance at home or in a nursing home
LTC must provide continuation coverage for at least how long in a setting other than an acute care hospital
12 consecutive months
LTC has an elimination period of how long, similar to disability income policies
30 days where the insured must be confined in a nursing home
LTC benefit period is how long
2-5 years
The longer the benefit in an LTC
The higher the premium
Most LTC polices must at least be
Guaranteed renewable
LTC benefits are usually paid
A specific fixed dollar amount per day
His type of policy cannot be cancelled, establish a new waiting period when coverage is replaced or converted, or cover only skilled nursing care
Long Term Care
All of these are LTC exclusions EXCEPT
Pre existing conditions Mental and nervous disorders Organic cognitive disorders (Alzheimer's, dementia, Parkinson's) Alcoholism Drug addiction War related illness injury Stuff covered under government plans
Cognitive disorders such as Alzheimer’s
Daily nursing and rehabilitative care that can only be provided by medical personnel is
Skilled care
Occasional nursing or rehabilitative care that can only be provided by medical personnel and can be carried out Ina nursing home, care facility or patients home
Intermediate care
Care for meeting personal needs like assistance eating, dressing, or bathing. Can be provided by no medical personnel. Caring for activities of daily living
Custodial Care
This is provided by a skilled nursing or other professional services in ones home
Home health care. Includes physical therapy, occupational therapy, speech therapy, and medical services by a social worker
Provided in the insureds home under a planned program by their attending physician
Home convalescent care
This is provided while the insured resides in a retirement community. Provides physical and social environment that contributed to continued intellectual psychological and physical growth
Residential care
This is care for functionally impaired adults in less than a 24-hour basis
Adult day care
Designed to give relief to the family caregiver
Respite care
Under group health, terminated employees can convert to individual insurance
Without evidence of insurability as long as done in conversion period
What is the conversion period regarding group health insurance
Within 31 days of termination of employment
COBRA stands for
Consolidated Omnibus Budget Reconciliation Act
Requires employers with 20 or more employees to extend group health coverage to terminated employees and their families after a qualifying event
COBRA
All of the following are qualifying events under COBRA except
Voluntary termination of employment
Termination of employment other than gross misconduct
Employment status change
Termination for any reason whatsoever
Termination for any reason whatsoever
How long is coverage extended for qualifying events
18 months
How long does employee have to exercise extension of benefits under COBRA
60 days
In events such as death of the employee, divorce coverage extension rate is how long for dependents
36 months
Under COBRA disqualifying events can discontinue coverage. These are
- Failure to make a premium
- Covered under another group plan
- Becoming eligible for Medicare
- Employee terminates all group health plans
HIPAA ensure portability or group health insurance.
True
This is a policy that provides a variety of benefits for a specific disease such as a cancer policy or heart disease policy.
Dread disease plan
In dread disease plans how are benefits paid
Schedules fixed dollar amounts for medical procedures like hospital confinement and chemotherapy
A policy that pays a lump sum benefit to the insured upon diagnosis and survival. Must survive for 30 days to get benefits.
Crucial illness plan
Policy provides a specific amount on a daily, weekly, or monthly basis while insured is confined in hospital. Payment is based on number of days confined in hospital
Hospital indemnity plan
Covers treatment and preventative care of dental disease and injury
Dental plans
Dental plan coverage includes
Teeth cleaning and fluoride treatment
