Health and Accident Insurance Flashcards
medical expense insurance
pays benefits for nonsurgical doctor’s fees commonly rendered in a hospital; sometimes pays for home and office calls
disability (income) insurance
form of ins. that insures the beneficiary’s earned income against the risk that a disablity creates a barrier for a worker to complete the core functions of their work. Although disabilty ins. is designed to protect one’s income, there are typically rules and regulations in place limiting the benefits of a disability policy to one’s income level, and typically only allowing protection for a portion of their income.
accidental death and dismemberment (AD&D) insurance
purest form of accident ins. it provides the insured with a lump-sum benefit amt in the even of accidental death or dismemberment under accidental circumstances
renewability provisions
define the rights of the insurer to cancel the policy at diff. point during the life of the policy. 5 principal renewability classifications: cancellable, optionally renewable, conditionally renewable, guaranteed renewable and noncancellable.
usually the more advantageous the renewability provisions to the insured, the more expensive the coverage.
Business Overhead Expense Insurance
form of disability income coverage designed to pay necessary business overhead expenses (ie rent) should the insured business owner become disabled.
doesn’t include any compensation for the disabled owner.
disability buy-sell plans (disability buy-out agreement)
agreements between business co-owners that provides that shares owned by any one of them who becomes disabled shall be sold to and purchased by the other co-owners or by the business using funds from disability income insurance. Usually contains provision allowing for lump-sum payment of the benefit, thereby facilitating the buyout of the disabled’s interest. The policy is legally binding and proceeds are normally received tax-free.
noncontributory
employee benefit plan where employer bears the full cost of the employees benefits, in most states plan must ensure 100% of eligible employees
contributory
group ins. plan issued to employer where both employer/employees contribute to cost of plan. generally 75% of eligible employees must be insured in most states.
coordination of benefits
designed to prevent duplication of group ins. benefits. limits benefits from multiple grp ins. policies in a particular case to a % of the expenses covered and designates the order in which multiple carriers are to pay benefits
Preexisting conditions
an illness or medical condition that existed before a policy’s effective date; usually excluded from coverage, through the policy’s standard provisions or by waiver.
COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985)
fed. legislation which extends group health coverage to terminated employees and/or their families at the individual’s expense, for up to 18mo.
usually applies when employee loses coverage through loss of employment or reduction in hours.
also extends to spouses/dependents in case of divorce or the death of the employee.
all co. that have averaged at least 20 full time employees over the past calendar year must comply with COBRA regs.
franchise health plans
(wholesale plans) provide health ins. cov. to members of an assoc. or prof. society. individual policies are issed to individual members and the assoc. or society simply serves as the sponsor for the plan.
premium rates are usually discounted for franchise plans
health savings account
tax-advantaged medical savings acct avail. to taxpayers in the US who are enrolled in a high-deductible health plan (HDHP). The funds contributed to an account are not subject to federal income tax at the time of deposit.
qualified medical expenses are incurred by the HSA owner, the spouse, and dependents.
HSAs are fully portable, and assets can accumulate over the years.
Upon death, HSA ownership may be transferred to a spouse tax free.
