Maine Life Insurance Exam Questions With Complete Solutions.

Maine Life Insurance Exam Questions With Complete Solutions. Contributory Health Insurance If the employees share a portion of the premium. Often require participation by 75% of eligible members. Noncontributory Health Insurance If the employer pays the entire premium. Most require 100% participation by eligible members. (Funding of Group Insurance) Shared funding Allows employer to self-fund health care expenses, select a deductible and pay covered expenses for any individual incurring claims up to that max, insurer assumes risk (Funding of group insurance) Min. premium arrangement Employer self-insure the normal and expected claims up to a given amount and the insurer funds only the excess amounts (Funding of group insurance) retrospective premium arrangement Insurer agrees to collect a provisional premium but may collect additional premium/make a premium refund at the end of the year based on actual incurred losses. (Funding of group insurance) Self-funding arrangement Large employers may elect to fully self-fund, or may self-fund a plan but contract for administrative services only (ASO). Conversion privilege An employee can convert their group certificate to an individual medical expense policy w/ same insurer, if/when they leave employer. Employee must make an application for a converted policy within a given period of time (usually 31 days) depending on the state. Health Insurance Portability and Accountability Act (HIPAA) Provides the ability to transfer and continue health insurance when someone changes or loses their job HIPAA Requirements Employers with 20 or more employees have to allow former employees to continue benefits. Rules apply to all types of group health plans except disability income plans HIPAA pre-existing conditions Health issues that existed, were treated, diagnosed within 6 months prior to employment COBRA Requires employers with 20+ employees to continue coverage for terminated workers, (as well as dependents) for up to 18 months. Employee is required to pay premiums (up to 102%) Group Disability Income Plans Specify benefits based on a percentage of the employees wages Blanket Health Plans Cover a group who may be exposed to the same risk, no certificates issued Taxation of group health premiums Employers are entitled to take a tax deduction for premium contributions made to group plans Taxation of group health benefits Any benefit received under a medical expense plan are not considered taxable income. Accidental means Requires that both the cause and the result of an accident must be unintentional accidental results only the injury resulting from the accident must be unintentional. 3 basic categories of health insurances Medical Expense, Disability Income Insurance, AD&D Health insurance premium factors Interest, expenses, types of benefits, morbidity, age, sex, occupation Disability Buy-Sell (business income policy) Legal agreement that specifies how a business will pass between owners when one of the owners dies or becomes disabled Business overhead expense (business income policy) Sold to small business owners who must continue to meet overhead expenses such as rent, used if owner becomes disabled. Covers fixed business expenses Disability Buy-Out (business income policy) Specifies who will purchase a disabled partner's interest and legally obligates that person/party to purchase the business interest of the disabled partner. Maternity Benefits Any policy of health insurance that provides maternity care must also cover the services of nurses/midwives, and licensed birth centers. Coordination of Benefits provision Prevents an insured covered by two health plans from making a profit on a covered loss Waiting period in a group health policy gives insurance company the right to delay coverage for a covered sickness for a specified number of days after the effective date of the policy HMOs (Health Maintenance Organizations) Not only finance health care services for their subscribers, but also organize and deliver the health services as well. Subscribers pay a fixed and periodic fee. Capitation Payment given to primary care provider for each HMO member assigned to them Closed panel When the HMO is represented by a group of physicians who are salaried employees and work out of the HMO's facility. "Open panel" works out of their own facility. PPO (Preferred provider organizations) A collection of health care providers who offer their services to certain groups at prearranged discount prices. Medicare Provides hospital/medical expense insurance to those over 65. Provides protection to anyone suffering from chronic kidney disease or those who have been receiving social security disability benefits for at least 24 months. Medicaid Financed by both the state and federal governments. State worker's compensation programs compensates employees for lost wages and medical expenses due to occupational accidents/diseases Requirements to start an HMO Obtain a certificate of authority, obtain a valid health care provider certificate, meet capital and surplus minimum requirements, make a deposit of $10,000 to the rehab and administrative expense fund, become a member of the state's health maintenance organization consumer assistance plan Medical Expense Plans Provides benefits upfront without having to satisfy a deductible. UCR (Usual, customary, reasonable) approach The max amount an insurer will consider eligible for reimbursement under a health insurance plan Major medical expense plans Usually carry deductibles, coinsurance requirements, and have large benefit maximums. Coverage provided for inpatient and outpatient hospital expenses. Comprehensive major medical combines the features of basic expense coverage and major medical coverage, sold as one policy Deductible What an insured pays before benefits are paid out. Used to control the cost of premiums and reduce over-utilization of medical services. Coinsurance Sharing expenses between insurer and insured, reduces over-utilization of the coverages. After insured pays deductible, the insurer covers 75-80% and insured pays remainder. Stop-Loss Designed to limit the amount of the insured's out of pocket medical expenses. HSAs (Health Saving Organizations) Helps people save for medical expenses, contributions are tax deductible. To be eligible, must have a high deductible health plan Hospital Indemnity Policies Pays a specific amount on a daily, weekly, or monthly basis to the insured while they are confined to a hospital. Carryover provision Permits expenses incurred during the last three months to be carried over into the new year if needed to satisfy the deductible for the next year Disability Income Insurance Financial impact of disability sometimes greater than that of death. Designed to provide an individual with a specified income benefit. Medicare select (or Part C) Insured agrees to use preferred providers, and pay a lower premium in exchange Medicare Part D Prescription drug plan Long term care insurance