Module 5 Flashcards
A plan where the plan sponsor assumes full liability for the financial legal, and administrative costs of the plan.
Self-insured
An alternate term for ‘self-insured’
Self-funded
An insure group plan’s premiums surplus or deficit
Experience Results
An annual process for insurers to determine the premium for the contract year
Premium Rate Renewal
A renewal method where the insurer amalgamates claims experience for an entire book of business into one pool.
Fully Pooled Premium Rate Renewal
An annual statement prepared by a contracted service provider to reconcile plan sponsor payments to claims and expenses plus cash flow interest for the period.
Annual financial accounting
Protection against exposure to large individual claims
Large amount pooling
Protection against potentially catastrophic claims that occur with low frequency. This applies to the entire claim.
Pooling from first dollar
Protection against an unexpectedly high level of total claims in any one contract period for one benefit.
Aggregate stop-loss pooling
Protection against financial risk beyond a specified number of years for a disability claim, assumed by the insurer
Duration pooling
A renewal method where the group’s own claims experience determines premium rates.
Prospectively rated premium rate renewal
The amount of money an employer is willing/able to contribute from revenue and plan member contributions to pay for group benefits.
Funding Sources
Determination of who bears the underlying risk for paying claims and expenses for a group benefits plan.
Funding arrangement
A fully insured plan with no risk to the plan sponsor
Insured non-refund
A fully insured plan with some risk o the plan sponsor
Insured Refund
The charge paid by the plan sponsor to the insurer for assuming the risk for claims above a pooling threshold
Pooled Premium
A fund established by the insure from plan surpluses for the purpose of offsetting a future deficit
Claims Fluctuation Reserve
An agreement a plan sponsor enters into with an insurer or third party administrator to administer a plan, with financial and legal responsibility for all plan costs remaining with the sponsor.
Administrative Services Only
Projected claims and expenses paid by monthly deposits similar to how premiums are billed
Billed in Advance (Budget ASO)
Claims and expenses are reimbursed to the insurer or TPA with a cheque payment in the following month
Monthly billed in arrears
Reimbursement to an insurer for claims and expenses is by automatic funds transfer from the plan sponsor’s account, on the basis of cheques issued and expenses
Billed in arrears
