GBA 1

Describe the typical plan features of behavioral health care benefit plans

- cover inpatient and outpatient mental health services - intermediate treatment covered: residential, partial hospitalization, intensive outpatient services.

Discuss how dental plans resemble today's medical plans

- fee for service indemnity approach - preferred provider organization - dental health maintenance organization approach

What is the market composition of behavioral health care benefits?

- majority purchased by large groups that buy comprehensive health care and other insurance for covered members - the smaller the group, the more likely to purchase a mental health plan integrated as part of general health plan -sold through large brokerage and consulting firms, MBHO sales force, and health carrier sales force

What are basic types of funding arrangements of an MHBO?

1. Fully insured arrangements 2. Mixied (often insured up to a certain claim amount, then employer responsibility) 3. Admin only (also called self-funded)

Differentiate between HSA and HRA

1. HSAs are funded by both EE and employer. HRAs are employer only 2. HSAs have annual max. HRAs do not have limit 3. HSAs rollover. HRA rollovers are up to employer 4. HSAs allow for nonmedical with penalty and tax. HRAs are medical only

Does CDHP enrollment negatively affect low-income and less healthy enrollees?

Critics believe this however few studies have examined the issue with data on actual use of care vs self-reported delays

Describe insurance as a mechanism from the standpoint of an employee benefit plan:

EEs (insured) pay premium to insurer who in turn reduces or eliminates specific risk of loss. All insured share resulting loss in way of premium payments.

What is the high level of accreditation to MBHOs by national committee for quality assurance?

Full for three year period

Is risk selection among employer-based groups primarily an issue for large or small employers?

Large. These employers tend to have multiple options including HDHPs while small firms typically have one HDHP option.

What impact have labor unions historically had in employee benefits?

- Argued to National Labor Relations Board (NLRB) that the duty to bargain in good faith over wages also included insurance and fringes such as pension benefits. Later ruled in W.W. Cross & Co. that this included health and accident plan

Explain the types of business or HR related reasons for firms establishing employee benefit plans:

- Attract and retain employees - Foster Corporate Efficiency, Productivity, and Improved Employee Morale

Identify steps used in applying the functional approach to employee benefit plan design, review, and revision:

- Classify employee needs - Classify categories of persons to protect - Analyze current offering in terms of functional categories (needs/objectives/employee categorees/regulatory/mandatory) - Determine any gaps in benefits or overlap - Consider recommendations for changes in the employer's present employee benefit plan - Estimate the costs or savings from each of the recommendations - Evaluate alternate methods of finance or securing recommended benefits and existing - Consider cost-saving techniques - Decide based on analyses -Implement changes - communicate the changes - periodically reevaluate

Why is the employee benefit mechanism an effective and efficient way of providing insurance coverage?

- Convenience for employees - Less expensive - Easier/Simpler for providers and suppliers to market employee benefits through employer

List the categories of benefits that generally are considered to fall under a broad view of employee benefits:

- Legally required benefits: Social Security - Payments for time not worked: rest periods, lunch, vacations, holidays - Employer's share of medical and medically related benefits - Employer's share of retirement and savings plan payments - Miscellaneous benefits: employee discounts, severance pay, education expenditures

Summarize three major federal tax advantages associated with employee benefit plans:

- Most contributions to employee benefit plans by employers are deductible as long as they are reasonable business expenses - within certain limits, these employer contributions are generally not considered income to employees - in certain types of retirement and capital accumulation plans, benefits accumulate tax-free to the employee until distributed

What elements of its compensation system should an employer seek to balance in designing a total compensation package?

- Salary - Bonus (incentives) - Employee benefits - Stock or performance-based plans/long term

Explain the significance of the Taft-Hartley Act in employee benefit planning:

- The Labor-Management Relations Act, called Taft-Hartley Act sets framework for good faith bargaining over wages, hours, conditions, and terms of employment and employee benefits. - established distinction between retirement benefits and welfare benefits -provided regulatory framework for administration of these benefits in a collective bargaining agreement

What is the functional approach to employee benefit planning?

- The application of a systematic method of analysis to an employer's total benefits program.

List the overall questions that should be addressed in setting benefit objectives:

- What benefits should be provided? - Who should be covered by the benefit plan? - Should employees have benefit options? - How should the benefit plan be financed? - How should the benefit plan be administered? - How should be benefit plan be communicated?

What are the classifications of employees that are often considered separately when determining benefit coverages?

- active full-time ees - dependents of active full-time ees - retire former ees - dependents of retired former ees - disabled employees and their dependents - surviving dependents of deceased employees - terminated employees and their dependents - ees who are temporarily separated from employers service (loa, military leave, etc.) -individuals other than full-time active ees

List the characteristics of a dental plans covered group that should be considered in the cost of the plan:

- ages of participates (increased usage for ages 30-40) - distribution by gender of group (females have high utlization) - location of group as dental charges vary by locale - incomes of participants. higher incomes higher utilization - occupations as blue collar have lower costs than white collar

summarize the impact of various plan designs on dental plan costs:

- as much as a 12% reduction in cost can be gained by increasing deductible from $50 to 100$. benefits maximum has minor impact. changes to restorative coinsurance has great effect and ortho inclusion is a source of high cost.

Describe the reasons that the functional approach is considered to be an appropriate approach for the effective planning, designing, and administration of employee benefits:

- benefits are significant element of total employee compensation - benefit plans are large item of labor cost and need effective planning and avoidance of waste to control costs - eliminate overlap and benefit gaps - allows plan to remain current, competitive, and compliant

Explain the different opinions on the use of deductibles in dental plans:

- can be lifetime or calendar year - deductibles reduce costs for small claims and therefore control costs for claims administration -alternatively, dental success pends on preventive procedures to avoid high costs. successful plans often cover the costs of preventive/diagnostic services

Discuss how dental technology affects dental plan design:

- constantly changing so it is important to distinguish between new techniques and new procedures - new techs and procedures are reviewed by american dental association. if approved, then typically covered. if not, then no. - often compare new procedure to similar procedures to see if cost and benefit make sense

Identify the three factors that affect the cost of a dental plan and the issues to be addressed in designing a dental plan:

- design of the plan - characteristics of the covered group - employers approach to plan implementation Issues: type of plan, deductibles, coinsurance, plan maximums, treatment of preexisting conditions, and whether services should be limited along with questions regarding ortho coverage

How did the mental health parity and addiction equity act of 2008 (MHPAEA) expand on MHPA?

- expanded rules to extend to substance abuse disorder in additional to mental health - retains small employer exemption - ACA eliminated exemption apart from grandfathered plans with 50 or fewer employees - mental health and substance abuse benefits are essential benefits according to ACA

Describe the characteristics of the group insurance technique that enable coverages to be written as ee benefit plans by minimizing risk:

- formation of group must be incidental to the obtaining of insurance - steady flow of lives through the group - minimum number of persons in the group - minimum percentage of group participating - eligibility requirements imposed - maximum limits on amount of benefits - coverage is determined for all individuals in the group on an automatic basis

List the health professionals that comprise a typical behavioral health specialty network:

- individual practitioners and multispecialty group practices - medical doctors specializing in addictionology - developmental behavioral pediatricians to improve access for children with special needs

Discuss differences between inpatient, partial day, and outpatient mental health services:

- inpatient services built to address acute needs (suicidal or homicidal) - partial hospital programs offer intensive treatment during the day but patients return home overnight - intensive outpatient are designed for patients who need more than weekly outpatient therapy, but they require fewer hours each day than partial or day facilities provide

Describe the types of employee needs and exposures to loss that may be covered under the employee benefits plans:

- medical expenses incurred by active employees, by their dependents, by retired employees or former employees and by their dependents - losses due to employees' disability -losses resulting from active employees' deaths, their dependents', those that are retired - retirement needs of employees and their dependents - capital accumulation needs or goals - needs arising from unemployment or from temporary termination or suspension of employment - losses resulting from property and liability exposures and the like -needs for dcfsa - needs for education assistance for ees and dependents - needs for custodial-care expenses for ees and dependents and retired ees - other ee benefit needs

How have employee assistance programs evolved?

- originally focused on substance abuse problems - evolved to include: range of employee/family issues, human resource support through management consultation, onsite employee and employer seminars, and critical stress management after catastrophic workplace events

Identify and describe the several design peculiarities of orthodontic benefits within dental plans:

- ortho procedures are typically one and done - maximums over lifetime -often paid for in installments

Describe MBHO cost-containment practices:

- preauthorization for treatment - predictive modeling and risk assessment - performance measurement - case management - utilization review - outcomes management - coordination of care - depression disease management programs - substance abuse relapse programs

What are some innovative approaches that might succeed in meeting the critical needs of mental health patients?

- proactive disease management programs - outreach to people who want treatment but do not know how to access it or locate - innovative ways to deliver therapy increasing accessibility and cost-effectiveness

How does a predetermination-of-benefits provision in a dental plan operate?

- requires dentist to prepare treatment plan that shows work and cost prior to services. generally required for nonemergency only and if above $300. dental consultants may review appropriateness of care

What is involved in providing an effective behavioral health program?

- should include integrated health/chemical dependency benefit including inpatient/outpatient services in addition to eap - depends on employee awareness of program services and value - depends on appropriate use of benefits - how well the behavioral vendor and its network providers prevent and manage costly disorders

What organizations provide dental care coverages?

-Insurance companies - state programs - self insured - hmos

describe the operation of nonscheduled dental plans

-cover some percentage of usual and customary -include deductible -usual and customary charge is typically set between 75 and 90th percentile

What were the provisions of the mental health parity act of 1996 (MHPA) and the reasons it largely failed to accomplish its objective?

-passed to establish parity between mental health benefits and other health benefits - prevented group health plans, insurance companies, and HMOs from placing lower annual or lifetime dollar limits on mental health benefits than on medical. - allowed for limits on inpatient/outpatient days, prescription drugs, which had similar effect - only applied to groups that offered mental health benefits and had more than 50 employees - did not require plan sponsors to include mental health benefits in their benefit packages - did not apply to substance abuse and chemical dependency treatment

What is the basic structure of a preferred provider organization?

1. Allows limited benefits for care received outside the PPO network. 2. No permission, referral needed to see specialist 3. Out of network services significantly more expensive

Identify and describe three types of total compensation/benefits policies that employers may adopt:

1. Average compensation/benefits policies follow the generally prevailing compensation/benefits level in a firm's industry or community or both 2. High-compensation/benefits policies attempt to attract higher levels of management, technical and general employee talent 3. Low-compensation/benefits policies are lower than average and more modest in scale.

Describe concerns made by critics of HDHPs

1. Consumers may not know how to differentiate between more or less valuable care 2. Greater risk segmentation if favorable risk population gravitates toward plans with lower premiums and higher cost sharing 3. Doubts exists on whether HDHPs will actually reduce health care spending

What aspects of cost sharing are relevant to HDHPs?

1. Deductible 2. Coinsurance 3. OOPM

Identify and describe the ten professional treatment categories into which virtually all dental problems are placed:

1. Diagnostic - routine oral exams and x-rays to determine existence of oral disease 2. Preventive - procedures to preserve and maintain dental health 3. restorative - procedures for the repair of natural teeth, including fillings 4. endodontics - treatment of dental pulp 5. periodontics - treatment of gums and other supporting structures 6. oral surgery - tooth extraction 7. prosthodontics - construction repair replacement of missing teeth 8. orthodontics - correction of malocclusion 9. pedodontics - treatment of children who do not have all permanent teeth 10. implantology - use of implants

What are common types of employer-sponsored health plans offered as sole plan or as one of several plan options?

1. Health maintenance organization 2. Preferred provider organization 3. Point of service 4. High deductible health plans

Summarize the basic methods used to reimburse health care providers:

1. Per time period: budget and salary 2. Per beneficiary: capitation 3. Per Recipient: contact capitation 4. per episode: payment per stay, bundled payments 5. per day: per diem, per visit 6. per service: fee for service 7. per dollar of cost: cost reimbursement 8. per dollar of charges: percentage of charges

Describe the basic difference between medicine and dentistry

1. Physicians typically practice in groups while many dentists practice exclusively in individual offices. 2. Culture of preventive care for dentistry while medicine is centered around diagnostic services 3. Dental treatment is often treated as elective unless there is pain or trauma. Most folks put off dental work. 4. Charges may be discussed ahead of time. 5. Dental care is often cosmetic 6. Dental expenses are typically lower 7. Great variety of alternative treatments with equal effects, but varying complexity and cost

List three key features that are generally associated with CDHPs:

1. Relatively high deductible 2. Personal spending account 3. availability of information tools for enrollees

How does an HMO plan operate?

1. Requires PCP and referrals to other physicians 2. No benefits available for care received outside HMO 3. Routine pocket expenses are copay driven.

Describe the types of safeguards against adverse selection used by insurance companies in underwriting contributory dental plans:

1. combining dental plan participation and contributions with medical plan participation 2. limiting enrollment to a single offering, thus preventing subsequent sign-ups or dropouts 3. requiring dental exams prior to joining plan and limiting or excluding treatment for conditions identified in exam 4. requiring participants to remain in the plan for a specified time before being eligible to drop coverage

What are some examples of medications excluded under a prescription drug plan?

1. drugs from cosmetic conditions 2. lifestyle (mood and sexual performance enhancers) 3. OTC 4. biotech meds (normally covered under medical)

What insurance and health care coverage reforms were enacted by Patient protection and affordable care act?

1. expansion to eligibility for medical benefits under the federal government's program for low-income, financially needy individuals 2. prohibition against the denial of insurance benefits for physical or mental illnesses or conditions that existed before coverage began 3. restrictions on variation in premium rates by insurers and tax credits/subsidies for low-income individuals purchasing individual coverage 4. establishment of marketplace exchanges to make available standardized medical plans health care 5. group health insurance mandates having direct and indirect impact on employer-sponsored health plans

Describe the characteristics of an ideal insurable risk:

1. large number of homogeneous risks 2. loss should be verifiable and measurable 3. loss should not be catastrophic in nature (large number of units should not suffer losses at same time) 4. change of loss should be subject to calculation so as to facilitate premium 5. premium should be reasonable or economically feasible 6. loss should be accidental and unintentional from standpoint of insured

Describe the common elements of a modern day prescription drug plan:

1. member eligibility cards 2. online claims adjudication 3. tiered copays or deductibles and coninsurance 4. pharmacy networks providing discounts for branded medications 5. meximum allowable cost pricing for generics 6. mail service 7. formularies and preferred drug lists 8. prior authorizations for certain high-cost medications 9. therapeutic interchange or switching

Summarize ACA requirements that impact employers sponsoring group health plans:

1. play or pay rules regarding medium and large employers offer of health insurance to aca defined fulltime employees or pay a penalty. 2. establishment of list of essential health benefits 3. elimination of lifetime maximums and capping of out of pocket maximums 4. expansion of coverage for preventive services 5. temporary tax subsidies to small employers that offer group health 6. new administrative and reporting requirements

Identify general groupings of dental procedures that are used in the design of dental plans

1. preventive and diagnostic procedures 2. minor restorative procedures 3. major restorative 4. orthodontic 5. typically exclude implantology because of expense

What mechanisms are established to mitigate financial incentives inherent in the various payment methods and to safeguard quality?

1. utilization review 2. provider profiling 3. public reporting 4. appeals to professional ethics 5. licensure and certification 6. peer review 7. litigation 8. prohibition against self-referral

What factors have been contributing to dramatic increase in prescription costs?

1. volume mix and availability of products 2. direct to consumer advertising 3. increasing age of population

Describe managed behavioral health care organizations:

1980's behavioral care was carved out and managed by MBHOs to control costs and provide better oversight. ACA mandates supported/integrated care so trend may change in years to come

Define the variety of pricing involved in the supply chain of pharmaceutical drugs.

AWP: average wholesale pricing is the price assigned by the drug manufacturer and used as a reference price for all discounts paid to pharmacies and PBMs WAC: wholesale acquisition service is the price at which wholsalers buy pharmaceuticals from manufacturers. MAC: maximum allowable cost of a generic medication. originated with federal medicaid program (not medicare)

Advantages/Disadvantages of using insurance to fund an employee group health plan:

Advantages - known premium set in advance - outside administration as it reduces employer disputes - financial backing - cost management as insurance companies often have the best cost saving practices in place - economy as insurance often the most efficient and low cost Disadvantages - additional admin costs for administrator - employee satisfaction affected by claims and problem solving abilities of insurer

Explain the arguments related to flexibility in the design of an employee benefit plan as related to the functional approach to benefit planning:

Argument 1 - The more flexibility, the more likely an employee to choose the benefits that really matter to them and meet their needs. Argument 2 - the more flexibility, the greater the likelihood an employee does not enroll for what they need and leave important needs uncovered.

Briefly summarize methods that may be used for handling risk:

Avoidance - one does not acquire or take on the risk. Only mutually exclusive options. Control - reduce probability of loss or severity of the loss Retention - accepting/assuming risk Transfer - risk transferred to other party. trampoline park waiver. Insurance - transfer of risk to other party with payment

What is a behavioral health care carve-out program, and what reasons are given for employers to choose it?

Carves out mental and chemical dependency services from a medical plan and usually provides them under a separate contract by a managed behavioral health care organization (MBHO). Reasons: 1. managed by firms specializing in behavioral health treatment 2. allows large self funded employers to offer same behavioral health benefits across all health plans 3. allows health plan to minimize adverse selection Less common now given ACA promoting more integrated plan.

Compare the compensation/service-oriented benefit philosophy and the needs-oriented benefit philosophy:

Compensation/service-oriented - views benefits purely as means of compensation, wages to employees Needs-oriented - focus on needs of employees and design benefit plan on that basis

What are psychotropic medications and what challenge do they pose for MBHOs?

Drugs that affect psychic function, behavior or experience. Part of the medical benefits administered by PBMs. Account for significant part of overall health care costs because of the chronic nature of mental illness. MBHOs do not manage these prescriptions so they often do not know about the types of meds or dosages.

What is the history of prescription drug coverage?

Early days - represented a small portion of overall health expenditures and such expenses were not covered by plans When prescription coverage became available, they were subject to the same copays, deductible, co-insurance rates. Today - prescription coverage is carved out of medical health plans and administered by pharmaceutical benefit managers

Explain motivations for developing HDHPs

Emerged as counter to managed care plans and rise in health care expenditures. Intended to control costs by having ee have greater stake in services so more consumer behaviors would occur.

What is an HRA?

Employer funded account established to pay health care expenses. Employers not required by law to roll over funds or leave them in account once employee terms.

What are the three types of tax savings accounts coupled with HDHP?

FSA (1970's) HSA/HRA (2000's)

Describe the effects of HDHPs on the use of preventive care services:

Few or no reduction. EEs more sensitivity as to which tests are covered.

Under MHPAEA 2008, what restrictions are imposed on a plan with multitier networks?

Financial or quantitative treatment limits may not be any more restrictive than the predominant requirements or limits imposed on substantially all m/s benefits in each subclassification

What is the impact on health care use of employer contributions to - and in the form of - personal savings accounts in HDHPs?

Greater employer contributions were associated with greater spending. employers with low contributions saw reductions in spending.

Discuss the cost increase provision that may exempt a plan from the parity rules of MHPAEA

If MHPAEA compliance requires changes that increase plan costs by at least 2% in the first year or at least 1% in any subsequent year, the law exempts the plan from MHPAEA for the following plan year. The exemption lasts for one plan year and applies for alternating plan year. Directly attributable to coverage expansion, not necessarily increased utilization from ees.

Describe the impact of making a plan contributory on employee participation:

Impacts ee participation and how well a plan meets ee needs. High costs lead to low participation, low costs don't pay for rich coverage.

Do employee benefit plans cover property and legal liability risks?

In some plans, yes. Homeowner insurance, auto, legal services. Greater emphasis on personal risk in employee benefit plans.

Adverse Selection

Individuals with higher than average risks join a group or comprise a larger % of a group than anticipated because of the availability of insurance and other benefits.

Insurance mechanism vs gambling

Insurance handles existing (pure) risk while gambling creates a risk where one was not previously.

Explain the principle of indemnification:

Insurance is used to make the victims of losses whole - placed in somewhat the same situation that existed prior to the loss. Indemnification.

Summarize two ways in which favorable risk selection with HDHP enrollees may occur:

Insurers have incentives to design policies that will cause consumers to self-select into coverage based on their risk. If low/high risk ees have different preferences for coverage then this is not necessarily inefficient.

Initially, after WW2, hospitalization for mental illness was covered at the same level of benefits as that for nonpsychiatric benefits. for what reasons did insurers start to place limits, particularly on outpatient mental health care, soon after that?

It is believed insurers started to place limits on outpatient mental health care because treatment often continued for indefinite lengths of time and there was much subjectivity surrounding mental disorders and treatment methods.

Describe the effect of firm size on HDHP enrollment:

Large firms more likely to offer HDHP than small/medium. For those small/medium sized firms, a larger proportion of ees are enrolled in HDHPs

What benefits are typically excluded when the term "employee benefits" is viewed and defined in a narrow sense?

Legally mandated - employer funding for social security benefits and workers' compensation.

What are the features and rationale behind a HDHP?

Lower premiums for catastrophic insurance only. The idea being having a greater financial stake in health care will cause one to be a better health care consumer.

What were the typical mental health care benefits of health maintenance organizations as they proliferated in the 1980s?

Mental health care coverage was limited under HMOs. restricted to 30-45 days per mental illness or 30 or 60 days per year. Greater limitations on outpatient services. $1000 per year with 25 or 40 reimbursement limit per visit.

Describe how HDHPs impact health care spending omong types of enrollees:

Mixed results. National study shows yes they reduce spending for medium/low risk employees. Single firm studies show less consistent evidence showing decreases and increases in spending under HDHP.

Do CDHPs have an effect on appropriateness of health care services?

Mixed. Some studies suggest indiscriminate reduction in utilization in response to HDHP enrollment and others show reduction of less clinically appropriate care.

Describe how POS plans are a hybrid of HMO and PPO plans?

Offer in and out of network benefits and have a PCP

Describe differences between PPO and POS:

POS has lower copays, smaller networks, and needs a PCP

Describe the relationship of peril and hazard to risk:

Peril - the cause of loss (tree falling on house) Hazard - condition that increases the probability of loss (living in the woods)

Explain the concepts of physical hazard, moral hazard, morale hazard:

Physical hazard - physical condition, presence or absence of physical thing contributing to likelihood of peril Moral hazard - character defects increasing chances of loss Morale hazard - carelessness or indifference due to existence of insurance

What role does HIPPA have in data gathering during behavioral treatment?

Plays part in protecting sensitive patient information

How is the possibility of catastrophic loss handled by employee benefit plans?

Policy limitations, reinsurance and restrictions on groups insured all can be used to minimize the problem to the extent it exists.

What is the difference between a "prior generation" prescription drug plan embedded within a group health policy and today's "carved-out" plan?

Prior generation - prescription coverage either included within medical plan or as a rider. receipts submitted as claim just like medical services and reimbursed according to deductible and coinsurance. Subscriber pays for prescription up front in pharmacy. Current - carved out from medical. administered by PBM offering payer discounts and reducing costs.

Explain the nature of property and legal liability risks:

Property risks - involve potential losses to the value of one's real or personal property Legal liability risks - losses resulting from the negligent or wrongful actions of individuals that result in injuries or losses to others

Explain how the use of length of service, probationary periods may var with respect to protection-oriented benefits and accumulation-oriented benefits:

Protection-oriented benefits include medical, life, pai, std, ltd that protect ees from immediate financial disaster. These typically have a short waiting period due to the need for immediate coverage for the ees and dependents. Accumulation-oriented benefits consist of pension plans, profit-sharing, savings plans that reward an ee for relatively long service with employers. These benefits typically have a longer waiting period.

Pure risk vs Speculative risk

Pure risk involves chance of loss ONLY (accident or misfortune). Speculative risk involves chance of loss OR gain (gambling, stock investment).

Are retiree plans subject to MHPAEA, and does that act preempt state insurance laws?

Retiree plans not subject to MHPAEA and does not preempt state insurance laws except to the extent they interfere with MHPAEA

Discuss the concept of risk within the context of employee benefit planning:

Risk in this context means uncertainty with respect to possible losses and inability to determine with confidence the number/value of claims a benefit plan will have to meet.

Identify the drivers of the health care spending reductions:

Savings driven by reductions in pharma and outpatient as well as drug utilization in the case of asymptomatic conditions (hypertension, high cholesterol)

Explain the nature of an incentive dental plan:

Seek to promote or incent sound dental hygene by increasing reimbursement levels generally to only preventive and maintenance procedures with other procedures being on a scheduled or nonscheduled basis

How do payment methods affect the delivery of health care?

Services may be billed in a number of ways such as per service, per subscriber, per episode, and so on. The means why which a service is paid impacts the quality and number of services rendered by physicians.

What is the starting point in the design of any employee benefit plan?

Setting overall objectives from the standpoints of both the employer and the employees

What is the significance of an allowed amount or usual and customary fee (UCF)?

The allowed amount is a term used by health plans to determine the max amount the plan will pay for covered health services. If out of network charges more than the allowed amount by the health plan, the provider can charge the member for the difference.

Explain how changes in payment methods can have sweeping effects using examples from medicare reform payment efforts:

The means by which health care services are paid for may be viewed as a slider where one end shifts more risk on the provider and the other shifts the risk on the payer. Depending on where in this scale, doctors may need to be more efficient or book additional volume in order to make money. 1980s medicare switched reimbursement from cost of charges to drg(diagnosis related groups) causing providers to grow efficiencies since payments were no longer based on their bills, but rather an average of costs amongst similar services.

What distinguishes self-funding from the insurance method of financing employee benefit plans?

The organization retains the risk rather than coverage by means of insurance/transfer

Explain how the concept of replacement ratio can be used by firms for setting benefit levels of retirement and disability plans:

The replacement ratio is a % of the ees income that is to be continued in the event of retirement (pension) or disability (std, ltd). This % acts as an objective and employers may set benefits levels accordingly.

What has been the impact of the parity legislation on mental health and substance abuse?

There was limited coverage with MH/SA compared to medical and surgical in the form of lower reimbursement rates (50% vs 80-100%), fewer visits, and lower lifetime and annual out of pocket maximums. Inequities addressed in parity legislation culminating with the ACA

Describe the basic features of indemnity plans

They pay a percentage of the cost of treatment and do not require insureds to obtain permission from their physician to access specialty or diagnostic services.

Explain how the type of industry in which a firm is operating affects its total compensation philosophy and employee benefits approach:

Types of business/benefits approach 1. Mature - well established business may take balanced approach 2. Developing firms or growth industries - need more capital so may focus on short-term goal 3. Conservative - long/term 4. Non/profit - long/term 5. Sales - short/term

Explain underwriting in the context of adverse selection:

Underwriting serves as a means for insurers to select and classify applicants for insurance. Policy provisions are often written to include pre-existing condition clauses, suicide clauses, benefit maximums, enrollment period restrictions.

Describe the special consideration for preventive care in light of the ACA:

Whereas previously preventive care could be covered using cost-sharing tools, post ACA plans require preventive care be covered 100% (except for grandfathered plans)

Is the wide range of procedures in dentistry important to a dental plan's design?

Yes, procedures are occasionally excluded such as surgical periodontics and temporomandibular joint dysfunction therapy

how does a scheduled dental plan operate? List advantages and disadvantages.

a scheduled plan pays a fixed allowance for each procedure advantages - cost control, uniform payemtns, ease in understanding plan, employee relations reasons related to employee appreciate of the plan disadvantages - must be reviewed regularly to achieve reimbursement objectives, reimbursement levels vary in different locations, reimbursement rates may influence dentists to raise cost

List the categories into which mental disorders can be loosely categorized:

a. adjustment disorders b. anxiety disorders c. childhood disorders d. eating disorders e. mood disorders f. cognitive disorders g. personality disorders h. psychotic disorders i. substance-related disorders

Advantages and disadvantages of lifetime deductibles:

advantages - avoiding cost to the plan of accumulated dental neglect - participants are investing in dental health prior to adequate dental coverage disadvantages: - promotes early utilization by those anxious to take advantage of the plan - once satisfied lifetime deductibles are of no use - employee turnover an important cost consideration for the plan - depending on level, may result in adverse employee reaction

what are the advantages and disadvantages of nonscheduled dental plans?

advantages - percentage reimbursement is uniform across locations, built in automatic adjustment for inflation disadvantages - cost control is difficult as reimbursements change rapidly, difficult to make modest benefit improvements, it is rare to know in advance what payment is to be received.

What is a combination dental plan?

certain procedures reimburseed on a scheduled basis while others are reimbursed on a nonscheduled basis. seek to provide balance between need to emphasize preventive care and cost control

What design and managing options are available to employers for a pharmacy benefit plan?

employers may: 1. manage the benefit and adjucate claims internally 2. outsource the benefit management to a health plan 3. contract directly with pharmacies and adjucate claims internally

Describe the features of a three-tier prescription drug plan:

generic, preferred, nonpreferred or nonformulary

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What happens when an employee presents a drug card to a pharmacy that is in network?

pharmacist checks online system to answer questions: 1. is the drug covered? 2.is the member eligible or are there any limitations member pays copay/coinsurance, payer is sent bill at negotiated rate

explain the typical levels of coinsurance or reimbursement provided under dental plans for the various types of dental procedures, use of maximum benefit provision, treatment of preexisting conditions:

preventive services: 80-100% coinsurance restorative: 70-85% ortho: 50-60% calendar year benefit maximum for dental services and lifetime for ortho and implantology

Law of large numbers:

the greater the number of exposures, the more closely the actual results will approach the probable results that are expected from an infinite number of exposures

Define the concept of managed care:

wherein insurance carriers have a role in steering health services and care while prepaying some portion of health care services.