Chapter 8 Flashcards
(127 cards)
1
Q
Accident & Health Policy (A & H)
A
Policy covering both injury and sickness.
2
Q
Accidental Injury
A
A spontaneous event, unforeseen and unintended resulting in injury.
3
Q
Adverse Selection
A
The tendency of more bad risks than good risks to purchase and maintain insurance.
4
Q
Coinsurance
A
Is a participation requirement whereby the insured must share, on a percentage basis, the cost of expenses in excess of the deductible.
5
Q
Copayment
A
Is an amount paid by the insured person each time a medical service is accessed. For example, if an office visit costs $100, the insured may have a copayment of $20 for each office visit.
6
Q
Deductible
A
The amount the insured pays on a claim. This is cost containment method designed to help control rising premium costs. It can be expressed as a specific dollar amount that the insured pays first.
7
Q
Elimination (Waiting) Period
A
A type of time deductible. A period of days that must expire after onset of an illness or occurrence of an accident before benefits will be payable. The longer the elimination period, the lower the cost of coverage.
8
Q
Extension of Benefits
A
If a group Medical Expense Policy is terminated for any reason, the benefits to a disabled insured are extended 3 months for Basic Medical Expense and 12 months for Major Medical Expense. If the coverage is terminated on an individual basis, the Major Medical Expense is to the end of the following calendar year after termination. The disability must occur while covered by the terminated policy. The disability must occur while covered by the terminated policy.
9
Q
Gatekeeper Concept
A
This establishes a primary care physician (Gatekeeper) to monitor the insured’s health care needs. This concept helps to control costs by not recommending unnecessary services, including referrals to other physicians and specialists. Not using the primary care physician or gatekeeper may cause a claim to be denied.
10
Q
Managed Care
A
This is a system whereby the insured participates in a specific care system such as a HMO or PPO. Care must be provided within the system’s network of providers and facilities unless an emergency makes such treatment impossible or impractical.
11
Q
Master Policy Owner
A
This refers to the employer or group which is issued and controls the actual policy. Each employee or group member receives a Certificate of Insurance rather than a copy of the actual policy. The Certificate lists the coverages and who is covered under the certificate.
12
Q
Morbidity Table
A
Table showing the mathematical probability of disability (illness or injury).
13
Q
Peril
A
Specific Causes of a loss
14
Q
Policy Period
A
Time interval when the policy is in force; A & H policy typically for 1 yar.
15
Q
Pre-Existing Conditions
A
Prior medical conditions for which the applicant has received, or should have received medical advice or treatment within a specified period before the effective date of a policy.
16
Q
Probationary Period
A
A specified period of time, such as 30 days, that a newly hired employee must satisfy before being enrolled in a group health plan. It is intended for people who join the group after the policy effective date.
17
Q
Sickness
A
Illness or Disease which first manifests itself or which is first diagnosed and treated while the policy is in force.
18
Q
Stop Loss Provision
A
Monetary Limit which, once reached, the insurer pays the full amount of healthcare costs. For example, an insured may be required to pay 20% of the healthcare costs (coinsurance) up to $1,000.
19
Q
Waiver of Premium
A
Premiums are waived by the insurer after a stated time period (usually 3 to 6 months). Premiums are not paid by the insured until such time s/he has recovered from the disability; then premiums are resumed at the same mode and amount.
20
Q
Principal Types of Losses and Benefits
A
Loss of Income/Disability (Loss of Time) Medical Expense Dental Expense Long Term Care Expenses Accidental Death and Dismemberment
21
Q
Loss of Income/Disability (Loss of Time)
A
Valued contract that pays weekly or monthly benefits due to injury or sickness. The benefit is a percentage of the insured’s past earnings.
22
Q
Medical Expense
A
Contract that covers the various expenses which an insured may incur due to a disability or illness. It may provide payment in a variety of ways.
Scheduled - pays benefits in the amount as listed for each specified expense.
Cash - pays a lump sum payment up to the stated maximum number of days.
Reimbursement - pays benefits directly to the insured, unless assigned to the provider(s) then it pays directly to the provider.
Fee for Service - Pays directly to the provider for the medical services received.
Prepaid - provides and coordinates health care in return for predetermined monthly premiums.
23
Q
Dental Expense
A
A form of Medical expense health insurance covering the treatment and care of dental disease and injury affecting the insured’s teeth. Optional feature with maximum limitations annually or life of the contract.
24
Q
Long-Term-Care Expense
A
Product designed to provide coverage for necessary diagnostic preventative, therapeutic, rehabilitative, maintenance, or personal care services provided in a setting other than an acute care unit of a hospital, such as a nursing home or even one’s own home.
25
Accidental Death & Dismemberment
Pays (principal amount) upon accidental death, loss of sight or loss of 2 limbs. It also pays a smaller amount (capital amount) as per policy schedule for lesser accidental dismemberment losses. It may be added as a rider to a disability income, medical expense or life insurance policy.
26
Field Underwriting Nature and Purpose
Field underwriting is very important due to the risk of a moral hazard. It includes the agent's initial personal contact with the applicant and the determination of insurability while assisting the applicant in recording information on the application. Fundamentally, the purpose is to be certain that a prospective insured individual or group has the same probability of loss for which the premium rate is based.
27
Underwriting Factors
```
Demographics
Smoking/Non-Smoking
Hobbies
Physical Condition
Moral, Morale, Financial Hazard
Medical/Health History
Chronic/Ongoing Conditions
Foreign Travel/Residence
Other Insurance
Plan Applied For
Carrier History
```
28
Underwriting Factors
Underwriting involves analysis of the applicant to determine if he/she is acceptable for the insurance proposed under the conditions indicated. It also attempts to eliminate conditions with more frequent and higher claims than the insurer's rates anticipates.
Net Insurance rates are obtained by multiplying claim frequency by the average value of claims.
29
Demographics
Age - increased age increased risk.
Gender - Women generally live longer than men
Occupation - When an applicant has more than one occupation, the most hazardous will be used for rating.
Location - temperature, climate, can affect and increase health risks.
30
Smoking/Non-Smoking
Smoking is a physical hazard that increases health risks.
31
Hobbies
Many of these pose physical risks, such as diving, racing, skiing.
32
Physical Condition
Once health has declined, it's extremely difficult to restore it. The unhealthy are more risky.
33
Moral, Morale, Financial Hazard
Hazard is an increase of risk, so any type of hazard will be considered.
34
Medical/Health History
Some health conditions are genetic, also considered here are disabled employees.
35
Chronic/Ongoing Conditions
A chronic illness is generally held to be that which lasts 3 months or longer. Extended illness increases the probability of loss.
36
Foreign Travel/Residence
Many nations do not have the same sanitary/safety standards of the US, and the visitor is more susceptible to illness or injury. The more frequent the foreign travel, the greater the risk.
37
Other Insurance
Insurers want to know if a prospective client has already been denied coverage. If so, that means the client is likely a higher risk.
38
Plan Applied for
As with any other product, a health insurance policy's cost will be affected by what the customer wants it to do. The more bells and whistles the client wants, the more risks are being covered and to a greater degree.
39
Carrier History
If an existing carrier is being replaced, the new insurer will consider what the previous carrier has already had to pay in claims. This is another indication of the risk being considered.
Note that political and religious preference is not considered in determining rates. When an applicant has 2 occupations, the most hazardous will be used for rating.
40
Underwriting Actions
```
Upon receipt of an application for insurance, the insurer's underwriting will take one of the following actions:
Issue Standard
Issue Rated-Up
Issue with Exclusions/Limitations
Rejection
```
41
Issue Standard
Issue the coverage requested at the rate that was quoted.
42
Issue Rated-Up
Issue the coverage requested but at a higher rate. Same as substandard in life insurance. Higher premiums are required due to the greater potential for a large number of claims.
43
Issue with exclusions/limitations
May be temporary or permanent, limits the insurer's obligation to pay. The rider used to exclude coverage for existing conditions is sometimes referred to as an Impairment Rider.
44
Rejection
Policy is not issued, applicant is excessive risk
45
Health Group Underwriting Process
Most health insurance is issued on a group basis. group underwriting is different than individual underwriting; all eligible members of the group are covered regardless of physical condition, age or gender. Cost is determined by the type, size, average age, location and the group's claims experience. In multi-state groups, cost is also determined by the state in which the majority of the employees are located and the policyholder's principal office location. Insurer's corporate office location is not a cost factor. Evidence of insurability is not required since annual re-evaluation makes premium adjustments possible, based upon the group's claims experience.
46
Group Health Requirements
The group must be formed for a purpose other than obtaining insurance.
A minimum number of enrollees are required.
Contributory requires that at least 75% of employees participate
Noncontributory requires the employer to insure 100% of employees. Employees have to work a minimum number of hours weekly to be eligible. Independent directors and contractors are not employees.
47
Group Health Underwriting Cont.
New employees are usually eligible to enroll after a probationary period. If they do not enroll upon becoming eligible, and enroll later, the insurer may require proof of insurability. If the employee doesn't initially enroll, he/she may do so at the next enrollment period, which is typically the plan's anniversary date. Proof of insurability is not required during enrollment period.
48
Health Group Insurance Rating
Can be Community or Experience rating.
Community Rating - essentially geographical rating. The cost of medical care within a particular geographical area or community determines how much the plan's premium will be.
Experience Rating is the utilization of the claim history of the group seeking to purchase insurance to determine how much the plan's premium will be.
49
Advantages/Disadvantages
Advantages of group coverage include cheaper premiums and underwriting standards are generally not as strict. Disadvantages include the percentage of participation requirements, enrollment requirements and the potential for change in insurers. Individual policies can be obtained any time with any company of the insured's choosing.
50
Group Plan Design Factors
```
Employer's Objectives
Types of Benefits a Plan should Provide
Plan Provisions for controlling costs
Benefit plan Communication
Benefit Outsourcing
```
51
Employer's Objectives
The objectives will vary for each organization based upon such factors as size, location, type of business, the result of collective bargaining and the employer's benefit.
52
Types of Benefits a plan should provide
in most cases the decision is ongoing and involves either the offering of new or improved benefits or the redesigning of existing benefits.
53
Plan Provisions for Controlling Costs
These provsions can include probationary periods, benefit limitations, and contributory financing.
54
Benefit plan communication
An effective communication program should create an awareness of the way that current benefits improve the employee's financial security; provide a greater understanding of available benefits, encourage the wise use of benefits; and assure that benefits comply with the legal requirements.
55
Benefit Outsourcing
The types of functions that an employer may decide to outsource are benefit administration such as in self-insured plans, and actuarial compliance such as in qualified retirement plans.
56
Group Provisions
Group Health is written to cover people working for the same employer. It usually covers only nonoccupational injury or disease, and the contract is between the employer and the insurer.
57
Group Sponsor
receives a Master Policy, while individual employees receive a Certificate of Insurance showing a summary of benefits; all employees have the same coverage. The group sponsor applies for coverage, provides information for underwriting, maintains the policy, and makes premium payments. Group insurance identifies the employee, employer relationship
58
Conversion Privilege
Allows an employee to convert the group coverage to an individual policy, without proof of insurability, upon termination of eligibility or termination of the group plan, providing the request is submitted to the insurer within 31 days after the qualifying event.
59
Continuation of Coverage for Dependent Children
Policies providing coverage for a dependent child (until a specified age, usually 19) shall not terminate that coverage if the child is dependent upon the insured and is incapable of self-support because of a physical or mental handicap, provided the handicap occurred while the policy was in force and the person agrees to pay for a physical exam at the request of the insurer. Both incapacity and dependency must be proven. Coverage may be extended to ages 21 through 25 depending on insurer, for children attending an accredited university.
60
Extension of Benefits
If a group Medical Expense Policy is terminated for any reason, the benefits to a disabled insured are extended 3 months for Basic Medical expense, 12 months for Major Medical Expense. If the coverage is terminated on an individual basis, the Major Medical Expense Extension of coverage is to end the following calendar year after termination. The disability must occur while covered by the terminated policy.
61
Coordination of Benefits
Is a method of determining primary and secondary coverage when an insured is covered by more than one group policy to help reduce overinsurance. The insurer for the person with the claim is primary with the spouse's plan being secondary. In the event children are covered under two group plans, the insurer for the parent whose birthday is first in the calendar year is primary. Secondary carriers will not pay claims that are the primary carrier's responsibility.
62
Types of Eligible Groups
```
Employment-Related
Multiple Employer Trusts
Associations
Customer Groups
Franchise Plans
```
63
Employment Related Groups
Individual Employer Group
Multiple Employer Trusts (METs)
Multi-Employer Welfare Association (MEWAs)
64
Individual Employer Group
For employees of an eligible employer
65
Multiple Employer Trusts (METs)
Groups formed by insurers, agents, brokers, or third party administrators who are called sponsors, thus allowing employers, in states that require 5 to q0 people in a group, to join with other employers of the same industry for the purpose of obtaining insurance.
Sponsor develops the plan, sets underwriting rules, and administers the plan.
A non-insured plan operates without the services or funds of an insurance company. The employer assumes legal responsibility for providing coverage through a trust.
The trust is the Master Policyowner with certificates of insurance issued to each employee.
66
Multi-Employer Welfare Associations (MEWAs)
Are small firms that are grouped together for the purpose of forming an association in order to receive excellent rates for health insurance. These groups are typically self-funded employee health benefit plans. The formation and regulation of MEWAs can vary by state.
67
Taft Hartley Trust Act
Was passed to prevent employers of union members from paying for the benefits directly to the group plan carrier. The act established a negotiated trust for the unions to receive benefits from. Under the collective bargaining agreement, most employers pay a percentage of the benefits per hour worked by the union member.
68
Taft Hartley Act and METs
METs that are unable to show that they are subject to the jurisdiction of another agency of this or another state or the federal government, must submit to an examination by the Commissioner to determine their organization and solvency, and to determine whether they are in compliance with applicable provisions of the code, and are required to obtain a Certificate of Authority to do business in California and be required to meet all appropriate reserve, surplus, capital and other necessary requirements imposed by the code for all insurers.
69
Multiple Employer Welfare Arrangements (MEWAs)
Can be created as fully insured or self-funded or partially self-funded benefit programs as an alternative to traditional health insurance for small employers. In order for the Department of Insurance to grant a MEWA a Certificate of Compliance, the MEWA must adhere to standards set forth in the code that are not inconsistent with the provisions of ERISA.
70
Associations
The association must have at the outset a minimum number of members (usually 100) and is organized for a purpose other than buying insurance.
The association is the group policy-holder and handles all funds for the group.
Underwriting an association group is difficult if there is little or no claims history. Examples include teacher associations, trade associations, professional associations, alumni associations, etc.
71
Customer Groups
Customer based groups include depositor groups, creditor/debtor groups, etc.
72
Franchise Plans (Wholesale)
These plans are for small employers who do not have enough employees to qualify for group. An individual policy is issued to each insured, no Master Contract. Other eligible groups include labor unions and trusts.
73
Replacement of Group Policies
When replacing a group policy, the agent should always provide a comparison of benefits between the present and the proposed plan of coverage.
Level of Benefits
Preexisting Conditions
No Loss- No Gain
74
Level of Benefits
Carriers replacing hospital, medical, or surgical benefits within 60 days of discontinuance must cover all employees and dependents covered by or eligible for coverage under the previous policy as of the date of discontinuance.
75
Pre-Existing Conditions
Agent must assure the client understands this provision. It excludes conditions for which the insured received or should have received medical advice within a certain period of time (6 months) prior to the effective date of the replacing policy and it may reduce policy benefits.
A specified exclusion of time (elimination) by number of days or months could be used in place of excluding outright the preexisting condition.
When replacing a group policy, any employee with a preexisting condition must be given credit for the time covered by the policy being replaced.
76
No Loss- No Gain
Legislation that requires that when group health insurance is being replaced, ongoing claims under the former policy must continue to be paid under the new policy, overriding any preexisting condition exclusions, mandatory risk transfer. Also known as a Hold-Harmless Agreement, when the replacing insurer assumes the claims liability relieving the original insurer of any present or future liability of the claim. This provision applies equally for group life and group disability policies.
77
Definition of Small Employer
Business Group of One
Small Employer
Eligible Employee
78
Business Group of One
An individual, sole proprietor, or a single full time employee of an S Corporation, C Corporation, LLC, or partership who has carried on business activities for at least 1 year prior to the application date. Also, the business must have generated taxable income in one of the previous 2 years.
79
Small Employer
Any person, firm, corporation, partnership, or association that is actively engaged in business. A small Employer also includes a business group that is limited to the number of people it employs. In California, the definition of small employer is any person, proprietary or nonprofit firm, corporation, partnership, public agency, or assiciation, that employs on at least 50% of its working days during the preceding calendar quarter or year, at least 2, but not more than 50 eligible employees the majority of whom are employed in California.
80
Eligible Employee
An employee who has a regular workweek (30 hours). Does not include an employee who works on a temporary or substitute basis. In California, an eligible employee is any permanent employee who is actively engaged on a full-time basis in the conduct of the business of the small employer with a normal workweek of at least 30 hours. Small employers offering group health must offer the plan to all eligible employees. If dependent coverage is offered then the coverage must be offered then the coverage must be offered to all employees.
81
Essential (Basic) and Standard Benefit Plans
Every small employer carrier shall actively offer at least two health benefit plans. One must be an essential (Basic) Health Plan and the second a Standard Health Plan, both must offer maternity benefits as directed by legislation. The coverage provided under either plan is published by the state. Each plan offers an indemnity version, an HMO version and a PPO version.
82
Rating Factor
Small employer carriers will apply rating factors consistent with all small employers. Rating factors shall produce premiums for identical groups that differ only by the amounts attributable to the plan design and not by the nature of the groups themselves. A small employer carrier will treat all health benefit plans issued or renewed in the same calendar month as having the same rating period. A health benefit plan that contains a restricted provider network provision will not be considered the same as a plan that doesn't contain such a provision, if the restriction of benefits results in substantial differences in claim costs. A small employer carrier will not use case characteristics other than age, geographical area, family composition, or any other rating factors other than actual claims experience. Preexisting conditions may not be excluded for any longer than one year.
83
Renewability of Coverage
A health benefit plan will be renewable with respect to all eligible employees and dependents at the option of the small employer except in the following cases:
Nonpayment of required premiums
Fraud or misrepresentation of the small employer in the application.
Noncompliance with the plan's provisions.
An insufficient number of individuals under the plan to meet participation requirements.
Insurer cannot cancel for frequency of claims.
84
COBRA
Consolidated Omnibus Budget Reconciliation Act of 1985
| Federal Act covering Group Benefits
85
COBRA
Act states employers with 20 or more employees must provide a health coverage continuation option to all covered employees and dependents up to 18 months in the event of:
Termination of employee (unless it is for cause).
Reduction of hours for employee, so then no longer qualify as full time employee.
Coverage may continue for up to 29 months if an individual qualifies for Social Security disability.
86
COBRA Coverage for Dependents
```
May continue for 36 months when:
Death of the employee
Divorce or legal separation
Employee's entitlement to Medicare Benefits
Loss of Dependent Status
```
87
COBRA Provisions
Multiple location groups even if multi-state will not affect any COBRA benefits.
Employers may require a former employee or surviving spouse to pay up to 102% of the premium.
The premium for an employee disabled at the time of termination may be increased to 150% of the premium after the 18th month of continued coverage.
Employees must be notified of their right to continue coverage. The employee or beneficiary must notify the employer within 60 days if they elect to continue coverage.
88
COBRA Extension of Benefits
Requires no evidence of insurability and provides the same benefits as the group policy.
Covers preexisting conditions if covered under the group policy.
If insured carried dependent coverage on the group, dependent coverage must be made available on the continuation policy.
89
Events that will cause termination of COBRA coverage
Timely premium payments are not made.
Employer ceases to maintain any group health plan.
Employee becomes eligible for Medicare Benefits, dependents remain under COBRA.
Employee becomes covered by any other group health plan.
Employee converts to an individual health plan.
90
OBRA
Omnibus reconciliation act of 1989. The primary purpose of the OBRA federal legislation was to extend the minimum COBRA continuation of coverage from 18 to 29 months for qualified beneficiaries who are disabled at the time of either termination or reduction in hours.
To qualify, the disability must meet the Social Security definition of disability and the covered employee's termination must not have been due to gross misconduct. According to OBRA, an employer may terminate COBRA coverage because of coverage under another health plan provided the other plan doesn't limit or exclude benefits for a beneficiary's preexisting condition. OBRA also clarified that COBRA coverage may be terminated only because of Medicare entitlement and enrollment, not merely eligibility.
91
Cal-COBRA
Not all employees are required to offer continuing coverage under COBRA. Those who are not are those businesses with less than 20 employees. There are also certain other exclusions. However, California residents have the additional protection of Cal-COBRA which eliminates most of these exclusions, and also offers a time extension for those whose COBRA eligibility has expired.
92
Cal-COBRA Continued
Health, dental and vision plans are covered. However, if a carrier offers a package of those benefits, it cannot be required to offer only the dental and/or vision components under Cal-COBRA.
Most companies are required to extend benefits for up to 36 months when the individual is allowed less than 36 months under COBRA. This extension of benefits under Cal-COBRA includes family/medical leave and maternity benefits as covered under COBRA. Eligibility for Cal-COBRA extends to indemnity policies, PPO's, and HMO's only. Self-insured plans are not eligible. Unlike COBRA, church plans are eligible under Cal-COBRA.
93
HIPAA (Health Insurance Portability and Accountability Act of 1996)
HIPAA was designed to provide coverage for people with preexisting conditions. Prior to this legislation, an employee with preexisting conditions was normally unable to obtain coverage when changing employers.
HIPAA guarantees the continuation of health benefits to individuals who have been covered for 12 months immediately preceding a change of employment and who choose to participate in the new employer's group health plan.
94
HIPAA Continued
People who have been insured for at least 12 months must be covered immediately when they join a new group health plan, without regard to preexisting conditions. Someone joining a group plan for the first time without previous coverage cannot be excluded for preexisting conditions after 12 months. This law also applies to employees leaving the employer to become self-employed. They cannot be denied coverage. Can also go from group to individual with a different carrier.
95
HIPAA Coverage
Any coverage prior to a break in continued coverage of 63 days or more, within the 12 month qualification period, will not be credited against a preexisting condition exclusion period.
96
Existing HIPAA coverage must be renewed unless:
Failure of plan sponsor to pay premiums timely.
Failure of the plan sponsor to comply with a material provision, such as maintaining a minimum participation rate. The plan sponsor committed an act of fraud or intentional misrepresentation of a material fact regarding the terms of the plan.
The employer is no longer a member of the association that sponsors the plan.
The issuer of coverage ceases to offer coverage in a particular market. The issuer must notify each plan sponsor, participant and beneficiary at least 90 days prior to the discontinuation of coverage, and the issuer must offer each plan sponsor the option to purchase other health insurance coverage being offered by the issuer to a group health plan in the market. If the issuer exits the market entirely, the period of notice is 180 days, and the issuer cannot reenter the market for at least 5 years. There is no covered employee that lives or works in the service area of a network plan.
97
ERISA
Employee Retirement Security Act of 1974
This federal legislation was designed to accomplish pension equality, and to also protect group insurance plan participants and their beneficiaries.
The Act puts in place certain disclosures and reporting requirements for establishing and maintaining group health insurance and other qualified plans.
The Reporting provisions of the Act establish that summary plan descriptions must be filed with the Department of Labor and that an annual financial report be filed with the Internal Revenue Service and the participants. The Act also establishes eligibility requirements, contribution limitations, tax rules, vesting considerations and penalties for non-compliance with qualified plan requirements.
98
A Americans with Disabilities Act
An employer may not refuse to hire a qualified applicant who has a disability or has a dependent with a disability because of concern of health insurance costs.
ADA regulations require that employees be given access to whatever health benefits are provided to other employees. If an employer provides health insurance to employees in general, the employer must provide equal access to employees with disabilities. However, ADA Title V allows insurers and health benefit plans to make health-related distinctions, provided these practices are not used to evade ADA. Any coverage limits or exclusions on disability must be justified by actuarial data or other legitimate business or insurance reason.
A plan is rarely justified in completely denying coverage to an individual based on a diagnosis of disability. A group plan generally could not deny coverage for treatments or procedures unrelated to the disability.
99
FMLA (Family and Medical Leave Act)
Under the FMLA, an employer always must maintain the employee's existing level of heatlh coverage (including family or dependent coverage) under a group health plan during the period of FMLA leave, provided the employee pays his or her share of the premiums. An employer may not discriminate against an employee using FMLA leave, and must provide the employee with the same benefits normally provided to an employee in the same leave or part time status.
100
Basic Provisions FMLA
The FMLA provides 12 workweeks of leave in a 12 month period for:
The birth of a childe and to care for the newborn child within 1 year of birth.
The placement with the employee of a child for for adoption or foster care ant to care for the newly placed child within 1 year of placement.
To care for the employee's spouse, child, or parent who has a serious health condition.
A serious health condition that makes the employee unable to perform the eseential functions of his/her job.
Any qualifying crisis arising out of the fact that the employee's spouse, child, or parent is covered military member on "covered active duty."
Military Caregiver Leave - 26 workweeks of leave during a single 12-month period to care for a covered service member with a serious injury or illness who is the spouse, son, daughter, parent, or next of kin to the employee (Military Caregiver Leave).
101
Pregnancy Discrimination Act (PDA)
1978 Amendment to the 1964 Civil Rights Act, which prohibits workplace discrimination on the basis of pregnancy. Its application evolved as more and more women entered the workplace but few employer-sponsored group health plans allowed sick leave for pregnancy-related illness.
102
PDA Cont.
Prohibits discrimination against pregnant women in all areas of employment, including hiring, firing, seniority rights, job security, and receipt of fringe benefits. The same accommodations must be provided for an expectant worker as those others. Unpaid maternity leave and guaranteed job reinstatement.
103
Major Risk Medical Insurance Program
Because so many Californians don't have employer-sponsored group health coverage and cannot obtain coverage because of preexisting conditions, California has instituted the Major Risk Medical Insurance Program (MRMIP).
MRMIP is a 36 month program that will pay part of coverage premiums for those unable to obtain coverage in the individual market. Once the PPACA provisions regarding preexisting conditions become fully effective, the MRMIP will be deleted.
The program is currently funded primarily by tobacco taxes.
104
MRMIP Eligibility
Be a resident of California
Not be eligible to purchase any health insurance for continuation of benefits under COBRA or Cal-COBRA. If an individual has COBRA or Cal-COBRA, he/she may apply for deferred enrollment.
Not be eligible for both Part A or Part B of Medicare (unless solely because of end stage renal disease)
105
MRMIP Eligibility Cont.
Be unable to obtain adequate health coverage,
Denial of coverage within the last 12 months (must be submitted with application).
Involuntary termination of health insurance coverage in the last 12 months for reasons other than nonpayment of premium or fraud, (this must be submitted with an application).
Offer(s) of individual health insurance premium rate that is higher than the MRMIB subscriber rate for your first choice participating health plan (this must be submitted with an application).
106
MRMIP eligibility cont.
Even if an applicant is currently eligible, she or he can apply for MRMIP if eligibility is anticipated.To apply for deferred enrollment, the application must indicate when she or he will become eligible and include documentation from the current insurer or employer indicating when her coverage will end.
If MRMIP has not reached maximum enrollment and an applicant otherwise qualifies, she or he will be enrolled in the program. If the program has reached its maximum enrollment, applicants' names will be placed on a waiting list in the order in which their completed applications are received.
Medi-Cal beneficiaries can apply for the program, but will be responsible for monthly premiums, deductibles or co-payments, which can be up to $4,000 per year for a subscriber with enrolled dependents.
107
Preexisting Conditions Insurance Program PCIP
The result of ObamaCare, CA has a contract with the Federal Department of Health and Human Services to establish a federally funded high risk pool program to provide coverage for eligible individuals. The program will last until December 31, 2013 when the national health reform is set to begin. After that date, there no longer will be a need for high risk pools because federal rules will not allow insurers to reject persons with preexisting conditions or charge them higher rates than those without conditions. This program is available for individuals who have not had health coverage in the previous 6 months.
108
MRMIP/PCIP Premiums
California has 6 different rating areas and premiums are determined by the area in which coverage is sought, the insured's age and the number of dependents. Under the MRMIP/PCIP out of pocket limits is $5,950 for individuals and $11,000 for families excluding premiums.
109
Patient Protection and Affordable Care Act
Effective 2010
Adults with preexisting conditions became eligible to join a temporary high risk pool, which will be superseded by the health care exchange in 2014. To qualify for coverage, applicants must have a preexisting health condition and have been uninsured for at least the past 6 months and there is no age requirement. This limits our of pocket expenses to $5,950 for individuals and $11,000 for families, excluding premiums.
Insurers are prohibited from imposing lifetime dollar limits on essential benefits such as hospital stays, in new policies issued.
Dependents can remain on parents' insurance plan until their 26th birthday. This includes dependents who are no longer live with their parents, are not dependent on a parent's tax return, are no longer a student, or are married.
Insurers are prohibited from excluding preexisting medical conditions except those grandfathered, for children under age of 19.
Insurers are prohibited from charging copayments, co-insurance, or deductibles for level A or B preventative care and medical screenings on all new insurance plans.
Insurers are prohibited from dropping policyholders when they get sick. Insurers are required to reveal details about administrative and executive expenditures. Insurers are required to implement an appeals process for coverage determination and claims on all new plans.
110
California's Programs for mandated high risk pools
will remain in operation until January 1, 2014
It includes Major Risk Medical Insurance Program
Preexisting Condition insurance Program
Health E-App
111
PPACA Changes Effective in 2011
Insurers will be required to spend 85% of large group and 80% of small group and individual plan premiums (with certain adjustments) on healthcare or to improve healthcare quality, or return the difference to the customer as a rebate.
Flexible Spending Accounts, Health Reimbursement Accounts, and Health Savings Accounts cannot be used to pay for over the counter drugs (except insulin), purchased without a prescription.
112
PPACA Changes during 2014
Insurers are prohibited from discriminating against or charging higher rates for any individuals based on preexisting medical conditions.
Insurers are prohibited from establishing annual spending caps.
Impose a $2,000 per employee tax penalty on employers with more than 50 employees who do not offer health insurance to their full-time workers.
Set a maximum of $2,000 annual deductible for a plan covering a single individual or $4,000 annual deductible for any other plan. Long Term Care insurance program was dropped.
Establish health insurance exchanges, and subsidization of insurance premiums for individuals with income up to 400% of the poverty line, as well as single adults.
Health insurance companies become subject to a new excise tax based on their market share; the rate gradually raises between 2014 and 2018 and thereafter increases at the rate of inflation.
113
PPACA
All existing health insurance plans must cover approved preventative care and checkups without co-payment.
A new 40% excise tax on high cost (Cadillac) insurance plans is introduced. The tax is on the cost of coverage in excess of $27,500 for a family, and $10,200 for an individual. It is increased to $30,950 for a family and $11,850 for an individual for retirees and employees of risk professions.
114
California Health Benefit Exchange
California was the first state in the nation to enact legislation creating a health benefit exchange under federal health care reform. Starting in 2014, the California Health Benefit Exchange will allow individuals and small businesses to compare plans and buy health insurance on private market. the exchange is an independent public entity within the state government.
115
California HBE Cont.
Make information available:
A website that provides standardized comparison information on qualified health plan benefit plans/options.
A calculator for applicants to compare costs across plan options
A web-based eligibility portal to help link individuals to health coverage options available to them.
A toll free consumer assistance hotline.
116
CHBE Eligibility
Individuals and Small Employers must meet federal citizenship requirements.
Incomes between 133 to 400% of the federal poverty line (in 2010, approximately $29,000 to $88,000 for a family of four), may qualify for tax credits and subsidies. The exchange will ensure that Californians are eligible for federally-authorized tax credits and subsidies get those benefits.
Small employers with less than 100 employees may also purchase coverage through the exchange.
117
CHBE Costs
The federal government awarded California, a total of $40 million to design and initially establish the Exchange. Beginning in 2014, the Exchange must be self-supporting from fees paid by participating health plans and insurers.
118
Voluntary Health Plan and Insurer Participation
Health insurance products offered through the exchange must be available in the same form to consumer purchasing coverage outside the Exchange.
All health plans and insurers participating in the Exchange must offer all Exchange Plans at the federally designated bronze, silver, gold, and platinum levels.
Catastrophic plans will only be available through health plans and insurers participating in the Exchange. The catastrophic plans will be available both inside and outside the exchange from these health plans and insurers.
119
CHBE Cont.
The Exchange doesn't change how existing state health care coverage programs are administered. Medi-Cal and the Health Families Program will continue to be administered through the Department of Health Care Services (DHCS) and the Managed Risk Medical Insurance Board MRMIB, respectively.
The Exchange will screen for and enroll individuals in Medi-Cal or the Healthy Families Program if they are eligible for those programs. The federal law requires state exchanges to perform this function.
The exchange will coordinate DHCS, and MRMIB and California counties to ensure that individuals are seamlessly transitioned between coverage programs if their eligibility changes.
120
Medical Loss Ratios
The Medical Loss Ratio is the ratio of an insurer's administrative expenses versus its total premiums received. Thus, a medical loss ratio of 90% means that the insurer paid 90% of all premiums received for claims, reserves, or other cost-cutting measures and used only 10% for administrative expenses and costs.
121
Medical Loss Ratio and PPACA
The PPACA requires the medical loss ratio to be 85% for large groups and 80% for small group plans.
PPACA also gives the Secretary of Health and Human Services (HHS) the authority to grant waivers to states which demonstrate that the MLR regulations would destabilize their insurance markets.
Inf an insurer's loss ratio is lower than the required minimum, the excess is supposed to be refunded to the policy holders and if the actual ratio is higher than the minimum, the shortfall is supposed to be covered by the company's profits. This makes a health policy function much like a life policy issued by a mutual company.
122
Access for Infants and Mothers Program
This program covers any infant born to a woman who was enrolled in the program after June 30, 2004.
Services covered by this program include but are not limited to:
Preventative, screening, diagnostic, and treatment services furnished directly by a licensed clinic to patients who remain less than 24 hours at the clinic for an illness, injury, advice, counseling, outreach and translation as needed:
Physician Services
Emergency first aid, perinatal, obstetric, radiology, laboratory, and nutrition services.
Advance practice nurses or mid-level practitioners.
Health Education, including education regarding the harmful results of tobacco use, information and referral services.
123
Healthy Families Program
This program was instituted to provide health coverage to all children residing in households with family incomes below 200% of the federal poverty level.
124
Healthy Families Program Eligibility
Be applying in behalf of a child:
Less than 19 years old, and includes unborn children 3 months before they're born.
Not eligible for no cost full scope Medi Cal Medicare coverage at the time of application. Medicare.
US citizen or resident
Physically present in California.
Applicant should remain in the program for 6 months, unless proof of other coverage. Applicant shall enroll all eligible children in the program.
An applicant shall pay in full any family contributions owed in arrears for any health, dental, or vision coverage provided by the program within the prior 12 months.
125
Applicants Disapproved
It is determined that the children to be covered under the application were covered by an employer-sponsored insurance within the last 3 months. Exceptions include:
Loss of employment except voluntary termination.
Change to a new employer that doesn't provide option for dependent coverage.
Change of address so that no employer sponsored coverage is available.
Discontinuation of health benefits to all employees of the applicant's employer.
Expiration of COBRA coverage.
126
Healthy Families Cont.
Disapproved if covered by an individual health care service plan or individual disability insurance policy as determined by federal law.
Children excluded from coverage under title 22 unless they are qualified aliens.
Subscribers will continue their eligibility for the remaining 12 months after initial eligibility is determined.
127
Health E-APP
Official State of California secured online application for health care for California Residents. It can be used to apply for health coverage through Medi-Cal for Families or the Healthy Families program. Health E-APP offers:
Automated error checking and computation of income and deductions;
Real time preliminary eligibility determination
Online selection of providers and health, dental and vision plans.
Electronic payments of premiums
Electronic signatures
Confirmation of Application Submission
A toggle between english and spanish.
Americans with Disabilities compliance.
