CRPC Chapter 5 EXAM | Questions And Answers Latest {2024- 2025} A+ Graded | 100%
Verified
Affordable Care Act
Categories of coverage and the average percentage of costs each covers: - Catastrophic plans pay for
less than 60% of the total average cost of care. Only available to ind under age 30 unless they qualify for
hardship exemption
Bronze plan: pays 60% and insured pays 40%
Silver plan: pays 70% and insured pays 30%.
Gold plan: pays 80% and insured pays 20%
Platinum plan: pays 90% and insured pays 10%.
Affordable Care Act
How deductible works - Amount that the insured must pay before the plan pays anything.
Do not apply to every service, preventative care, may be paid 100% by ins company.
Health insurance deductibles are annual deductibles, not a per incident deductible.
Coinsurance - Percentage of expenses paid by insurance company once the deductible has been met for
covered services
Copayment - a fixed fee paid by the patient at the time of an office visit
Copay may or may not be applied to the annual deductible or coinsurance percentage, depending on the
plan
Health Savings Account (HSA) - Tax-sheltered savings account similar to an IRA but created primarily to
pay for medical expenses.
4 advantages of HSA for an individual: - 1) May claim a tax deduction for cash contributions made to
HSA, even if not itemized on tax return.
Medical expenses must exceed 7.5% AGI before they may be deducted by an individual as itemized
expenses on their income tax return.
2) interest and earnings on amounts held in an HSA accumulate tax free
, 3) employer contributions on behalf of an employee-account owner do not result in taxable income
4) distributions to an account owner are tax-free as long as they are used to pay for qualified medical
expenses
4 important advantages of a HSA for an employer - 1) employer contributions are tax deductible for
income tax purposes
2) employer contributions to an employee- account holder HSA are not subject to payroll taxes
3) employee salary reduction contributions may be made to HSA feature that is part of an employee-
sponsored cafeteria plan.
Not subject to payroll taxes.
4) employers may be able to redesign their existing health plans to take advantage of HSA rules.
Conservator - Financial guardian; a court-appointed person given authority to manage the property and
financial affairs of an incompetent person
Drawbacks of conservatorship when it comes to incapacity - 1) competency of the person in question
must be determined through a court hearing.
2) court may require the posting of a security bond for the conservator and require detailed reports and
accounting to the court..
general power of attorney - an instrument in writing authorizing one person to do anything for the
principal. In other words, one party has full power of attorney for another party.
The authority of the attorney-in-fact ceases when the principal dies or becomes incapacitated.
Durable power of attorney - A durable POA does not cease upon the incapacity of the principal (it will
cease upon death). This makes it a more effective instrument for dealing with incapacity.
Revocable living trust - A trust set up on behalf of the grantor. Assets are transferred into the trust
before the grantor experiences any incapacity. It is operative and managed from the time it is
established.
Contingent (standby) trust - A legal shell.
Verified
Affordable Care Act
Categories of coverage and the average percentage of costs each covers: - Catastrophic plans pay for
less than 60% of the total average cost of care. Only available to ind under age 30 unless they qualify for
hardship exemption
Bronze plan: pays 60% and insured pays 40%
Silver plan: pays 70% and insured pays 30%.
Gold plan: pays 80% and insured pays 20%
Platinum plan: pays 90% and insured pays 10%.
Affordable Care Act
How deductible works - Amount that the insured must pay before the plan pays anything.
Do not apply to every service, preventative care, may be paid 100% by ins company.
Health insurance deductibles are annual deductibles, not a per incident deductible.
Coinsurance - Percentage of expenses paid by insurance company once the deductible has been met for
covered services
Copayment - a fixed fee paid by the patient at the time of an office visit
Copay may or may not be applied to the annual deductible or coinsurance percentage, depending on the
plan
Health Savings Account (HSA) - Tax-sheltered savings account similar to an IRA but created primarily to
pay for medical expenses.
4 advantages of HSA for an individual: - 1) May claim a tax deduction for cash contributions made to
HSA, even if not itemized on tax return.
Medical expenses must exceed 7.5% AGI before they may be deducted by an individual as itemized
expenses on their income tax return.
2) interest and earnings on amounts held in an HSA accumulate tax free
, 3) employer contributions on behalf of an employee-account owner do not result in taxable income
4) distributions to an account owner are tax-free as long as they are used to pay for qualified medical
expenses
4 important advantages of a HSA for an employer - 1) employer contributions are tax deductible for
income tax purposes
2) employer contributions to an employee- account holder HSA are not subject to payroll taxes
3) employee salary reduction contributions may be made to HSA feature that is part of an employee-
sponsored cafeteria plan.
Not subject to payroll taxes.
4) employers may be able to redesign their existing health plans to take advantage of HSA rules.
Conservator - Financial guardian; a court-appointed person given authority to manage the property and
financial affairs of an incompetent person
Drawbacks of conservatorship when it comes to incapacity - 1) competency of the person in question
must be determined through a court hearing.
2) court may require the posting of a security bond for the conservator and require detailed reports and
accounting to the court..
general power of attorney - an instrument in writing authorizing one person to do anything for the
principal. In other words, one party has full power of attorney for another party.
The authority of the attorney-in-fact ceases when the principal dies or becomes incapacitated.
Durable power of attorney - A durable POA does not cease upon the incapacity of the principal (it will
cease upon death). This makes it a more effective instrument for dealing with incapacity.
Revocable living trust - A trust set up on behalf of the grantor. Assets are transferred into the trust
before the grantor experiences any incapacity. It is operative and managed from the time it is
established.
Contingent (standby) trust - A legal shell.
