Module 8

Question 1

Not giving credit to a plan for favorable risk attributes associated with a healthy population. This makes health insurance more affordable for those with higher risk.

Answer 1

Adjusted Community Rating

Question 2

Age (within a range of 3 to 1), geographic area, tobacco use, and family composition.

Answer 2

Post-ACA allowable underwriting factors

Question 3

They must be covered in fully insured plans, but don’t have to be with self-insured plans, leading to cost savings.

Answer 3

State-mandated Benefits

Question 4

In self-funding, looking at health plan components separately to determine which drive the plan’s costs the most.

Answer 4

Unbundling

Question 5

More transparency and use of bundled pricing and direct contracting to reduce claims costs.

Answer 5

Administrative enhancements when opting to self-fund.

Question 6

Cost fluctuations can put a strain on a company’s cashflow.

Answer 6

Risks when self-funding

Question 7

This policy caps how much an employer pays for any one person’s claims during the policy period.

Answer 7

Individual specific stop-loss insurance

Question 8

The policy caps how must an employer is obligated to pay for all its claims across a full plan year.

Answer 8

Aggregate stop-loss insurance

Question 9

Stop-loss insurance reimburses the plan sponsor for health payments in excess of this pre-determined level.

Answer 9

Attachment Point

Question 10

When insurers quote a separate, much higher deductible for high-risk individuals with large claims in the past.

Answer 10

Lasering

Question 11

Self-funded plans with stop-loss insurance with relatively low attachment points.

Answer 11

Level-Funded Plans

Question 12

“Minimum premium” language, which requires employer payments even if workers are laid off, and a 12/18 clause.

Answer 12

Contractual provisions to examine when opting for a level-funded plan.

Question 13

Federal agencies, including the DOL, the U.S. Treasury, HHS, and the EEOC.

Answer 13

Regulation of self-funded plans.

Question 14

In health insurance: Plan participants and dependents.
In stop-loss insurance: Employers being protected against excess loss.

Answer 14

Insureds for health insurance and stop-loss insurance.

Question 15

The employer’s economic condition, financial risk tolerance, and desire for plan flexibility and lower administrative costs.

Answer 15

Determinants of the viability to self-fund.

Question 16

Similar health risks; transition costs and barriers; and additional compliance, financial, and plan management obligations.

Answer 16

Arguments countering substantial exodus of healthy risks from insured marketplace.

Question 17

The employer (not the participant) takes on the risk of additional claims for the person.

Answer 17

Stop-loss contract lasers effect on individual participant actual plan coverage.

Question 18

They prohibit a plan from denying an individual eligibility for benefits based on a health factor & from charging a person a higher premium than a similarly situated person based on a health factor.

Answer 18

HIPPA non-discrimination prohibitions for group health plans.

Question 19

Advantages inherent in self-funding employee benefits include which of the following:

A. Lower administration costs since employers avoid the costs of insurance carrier profit margins, risk charges, premium taxes, and contingency margins.

B. Avoidance of the ACA’s Health Insurance Tax.

C. Greater opportunities for flexibility in plan design as compared to a fully insured plan.

D. All of the above.

Answer 19

D - All the points are true.

Question 20

All of the following are disadvantages inherent in self-funding EXCEPT:

A. Low Risk
B. Stop-loss coverage may be dropped or not available
C. Adverse selection on offerings my occur, especially if a fully insured plan is also offered.
D. High Risk

Answer 20

Answer: A

Self-funding can be high risk for organizations due to high volatility in claims and claims costs. A large, catastrophic claim can be devastating to employers that don’t have the financial reserves to cover it. Getting stop loss coverage or renewals is sometimes extremely difficult for some small groups desiring it.

Question 21

Which type of plan eliminates most, if not all, of the premium taxes and state-insured mandates?

A. Fully insured plans
B. Level-funded plans
C. Self-Funded Plans

Answer 21

C. Self- Funded Plans

Question 22

Which of the following is a common practice among insurers of assigning higher deductibles to specific high-risk individuals with large past claims to place responsibility on the employer?

A. Individual specific stop-loss insurance
B. Aggregate stop-loss insurance
C. Lasering

Answer 22

C. Lasering

Question 23

Which of the following types of insurance caps how much the employer pays for any one employee’s claims during the policy period?

A. Individual specific stop-loss insurance
B. Aggregate stop-loss insurance
C. Annual responsibility for care

Answer 23

A. Individual specific stop-loss insurance

Question 24

Which of the following types of insurance caps the amount the employer will pay for healthcare costs for the entire group over a full plan year?

A. Individual specific stop-loss insurance
B. Aggregate stop-loss insurance
C. Bundled pricing

Answer 24

B. Aggregate stop-loss insurance

Question 25

Which of the following reduces the employer’s financial risk, but increases the premium for stop-loss coverage?

A. Lower attachment points
B. Lasering
C. Using factors such as health status to set premiums

Answer 25

A. Lower attachment points

Question 26

All of the following are true of the healthcare-sharing ministries (HCSMs), EXCEPT:

A. HCSMs are true insurance in the conventional sense of the term.
B. HCSMs have no legal obligation to pay bills, but are ethically obligated if funds are available.
C. Individuals in HCSMs pay monthly share amounts, have an annual responsibility for care, have an annual unshared amount, and have lifetime maximum payments.

Answer 26

A. HCSMs are true insurance in the conventional sense of the term.

Question 27

All of the following are true about short-term health insurance places, EXCEPT:

A. It provides low-cost catastrophic coverage for relatively healthy people.
B. Short-term policies can currently extend for 365 days.
C. Policies are underwritten with adjusted community rating.

Answer 27

C. Policies are underwritten with adjusted community rating.