Medical Expense Insurance Flashcards
(39 cards)
Medical expense insurance
Basic hospital, surgical and medical policies and major medical policies are grouped into medical expense insurance.
Do hospital, surgical and medical coverages require a deductible?
No, they usually do not require the insured to pay a deductible
Basic hospital expense coverage
Hospital expense policies cover hospital room and board, and miscellaneous hospital expenses, such as labs, x-rays, medicines, use of operating room and supplies, while the insured is confined in a hospital.
Miscellaneous hospital expenses
Normally have a separate limit. They pay for other miscellaneous expenses associated with a hospital stay
Basic medical expense coverage
It provides coverage for non surgical services a physician provides. However, the benefits are usually limited to visits to patients confined in the hospital.
Basic surgical expense coverage
This is commonly written in conjunction with Hospital expense policies. This policy pays for the costs of surgeons services, whether the surgery is performed in or out of the hospital. It includes surgeon fees, anesthesiologist and the operating room when it is not covered as a miscellaneous medical item
Comprehensive major medical
Is a combo of basic expense coverage and major medical coverage, sold as a separate policy. They do include a deductible.
In an HMO, a gatekeeper helps control what?
Helps control the cost of healthcare by only making the necessary referrals
Point of service (pos) plan
Is a combo of HMO AND PPO PLANS. Individuals can visit an in-network provider at their discretion and an out of network physician.
Medical savings account (MSAs)
Is an employer funded account linked to a high deductible medical insurance plan. They are only available to small employers with 50 or fewer employees, or a self-employed person. The employer raises the medical plan deductible and returns all or part of it to the employees to contribute to the MSA. The employee uses the funds from the MSA to cover health insurance deductibles during the year. If there is a balance at the end of the year, the employee may leave it in the fund to collect interest or withdraw the remaining amount as taxable income.
Flexible spending accounts (FSAs)
Is a form of cafeteria plan benefit funded by salary reduction and employer contributions. The employee deposits a certain amount of their paycheck into an account before paying income taxes. During the year the employee can be directly reimbursed from this account for eligible health care and dependent care expenses. It is a use or lose annually. Changing can be made during open enrollment unless the circumstance are deemed a qualified event. They are tax exempt.
Grace periods
In most cases the grace period for policies due on a weekly bases is no less than 7 days, 10 days for monthly premium policies and 31 days for all other modes. Coverage will continue in force during the grace period
What is Group underwriting
It’s designed to avoid adverse selection by the following requirements:
The insured must be incidental to the group
There should be a steady flow of persons through the group
The persistency of the group
A method that prevents the individual selection of benefits
Eligible participants
Size and composition
COBRA (consolidated omnibus budget reconciliation act)
Requires any employer with 20 or more employees to extend group coverage to terminated employees and their families after a qualifying event.
Qualifying COBRA events are
Voluntary termination of employment
Termination of employment for reasons other than gross misconduct
Employment status change: full vs part time
COBRA COVERAGE IS EXTENDED FOR HOW LONG?
is extended up to 18 months. The terminated employee must exercise the extension of benefits under COBRA within 60 days of separation of employment.
In the case of death of an employee, divorce or legal separation, the period is extended to 36 months for dependents.
HIPAA
Ensures portability of group insurance and includes various required benefits. HIPAA guarantees access to individual policies for qualifying individuals and guaranteed renewability of individual policies.
In order to convert health insurance coverage from a group plan to an individual policy, you must meet these criteria
Have 18 months of continuous creditable health coverage
Have been covered under a group plan in most recent insurance
Have used up any COBRA coverage
Not be eligible for Medicare
Not have any other health insurance
Applied for individual health insurance within 63 days of losing prior coverage
Metal tiers for plans
Bronze 60%
Silver 70%
Gold 80%
Platinum 90%
Medical loss ratio (MLR)
Indicates how much of the health coverage premiums must go toward actual medical care as opposed to administrative costs and profits. Insurance companies are required to spend 80%(for individual or small groups) and 85%( for large groups) of premium dollars
Health savings account (HSA)
Are tax deductible. Contributions by an employer are not included in the individuals taxable income. It’s designed to help individuals save for qualified health expenses that they, their spouse or dependents incur. They are portable, the HSA goes with the employee wherever they go. It is owned by the individual not the employer. You can’t be on Medicare or claimed as a dependent on someone else’s tax return. An HSA holder who uses money for a non health expenditure pays tax on it, plus 20% penalty. After age 65, a withdrawal for that purpose would be taxed, not penalized.
Patient protection and affordable care act (PPACA)
The affordable care act has mandated increased preventive, educational and community based health care services.
Health reimbursement account (HRA)
Consists of funds set aside by employers to reimburse employees for qualified medical expenses, such as deductibles or coinsurance amounts. Employers qualify for preferential tax treatment. Employers can deduct the cost of the HRA as a business tax! They’re not taxable employee benefit, but the employee can roll over any unused balances at the end of the year. No statutory limits and are available to employers of all sizes
Contributory group insurance plan
The eligible employees contribute to payment of the premium(both the employer and employee pay part of the premium) at least 75% of all eligible employees must participate in the plan.
