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9/24/2026CRPC Chapter 5 (1).pdf##############################################################################
Chapter 5 (1).pdfCRPC Chapter 5 (1).pdf############################################
CRPC Chapter 5
Affordable Care Act
Categories of coverage and the average percentage of costs each covers: -
ANS-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 - ANS-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 - ANS-Percentage of expenses paid by insurance company once the
deductible has been met for covered services
Copayment - ANS-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) - ANS-Tax-sheltered savings account similar to an IRA
but created primarily to pay for medical expenses.
4 advantages of HSA for an individual: - ANS-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 - ANS-1) employer contributions are
tax deductible for income tax purposes
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CRPC Chapter 5 (1)CRPC Chapter 5 (1).pdf######################################################################
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9/24/2026CRPC Chapter 5 (1).pdf##############################################################################
Chapter 5 (1).pdfCRPC Chapter 5 (1).pdf############################################
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 - ANS-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 - ANS-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 - ANS-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 - ANS-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 - ANS-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 - ANS-A legal shell.
It is funded when the grantor become incapacitated. This means that someone must
have the legal authority to transfer the grantor's assets to the trust and manage them on
behalf of the grantor. This is a person with a durable POA (sometimes with a "springing"
power).
Living will - ANS-a document in which a person states his or her wishes about life
support and other treatments
######################################################################################!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!Q
CRPC Chapter 5 (1)CRPC Chapter 5 (1).pdf######################################################################
######################################################################################!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!Q
9/24/2026CRPC Chapter 5 (1).pdf##############################################################################
Chapter 5 (1).pdfCRPC Chapter 5 (1).pdf############################################
CRPC Chapter 5
Affordable Care Act
Categories of coverage and the average percentage of costs each covers: -
ANS-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 - ANS-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 - ANS-Percentage of expenses paid by insurance company once the
deductible has been met for covered services
Copayment - ANS-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) - ANS-Tax-sheltered savings account similar to an IRA
but created primarily to pay for medical expenses.
4 advantages of HSA for an individual: - ANS-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 - ANS-1) employer contributions are
tax deductible for income tax purposes
######################################################################################!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!Q
CRPC Chapter 5 (1)CRPC Chapter 5 (1).pdf######################################################################
,#############################CRPC
######################################################################################!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!Q
9/24/2026CRPC Chapter 5 (1).pdf##############################################################################
Chapter 5 (1).pdfCRPC Chapter 5 (1).pdf############################################
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 - ANS-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 - ANS-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 - ANS-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 - ANS-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 - ANS-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 - ANS-A legal shell.
It is funded when the grantor become incapacitated. This means that someone must
have the legal authority to transfer the grantor's assets to the trust and manage them on
behalf of the grantor. This is a person with a durable POA (sometimes with a "springing"
power).
Living will - ANS-a document in which a person states his or her wishes about life
support and other treatments
######################################################################################!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!Q
CRPC Chapter 5 (1)CRPC Chapter 5 (1).pdf######################################################################
