Hartford Disability Insurance

Mandatory Contribution

A LTD or STD plan in which employees pay the entire premium (100% contributory) and the employer requires enrollment as a condition of employment

Salary Gross Up

A LTD plan in which the employer adds the cost of each employee's computed premium to the employee as a salary increase. The employer then takes periodic deductions from the employee's salary to pay for the premium. (The employer may also require a lump sum payment at the end of the year.) This makes a noncontributory LTD plan into a 100% contributory plan and thus the benefit becomes nontaxable.

Fibromyalgia

A chronic disorder characterized by widespread musculoskeletal pain, fatigue, and multiple tender points. Tender points are tenderness that occurs in precise, localized areas, particularly in the neck, spine, shoulders, and hips. People with this syndrome may also experience sleep disturbances, morning stiffness, irritable bowel syndrome, anxiety, and other symptoms

Durational Core/Buy-Up

A core buy-up plan characterized as a core plan with a short LTD duration (two, three, four, or five years are typical) with a buy-up to a full duration to age sixty-five or Social Security Normal Retirement Age (SSNRA)

Core Buy-Up Plan

A disability plan (usually LTD) in which a "core" or base plan is funded by the employer. The base or "core" plan design generally has lower benefits than a traditional LTD plan design. The buy-up plan design is paid by the employer up to the cost of the core plan design, and the employee pays the additional cost, usually on a voluntary basis. The buy-up plan design provides benefits that are better than the core plan design and will equal or exceed the benefits of a traditional disability plan design

Integration (offsets, coordination of benefits)

A feature of both short-term disability and long term disability policies intended to avoid overinsurance by considering other sources of disability income that may be available to a disabled workers, such a social security disability or workers compensation. The process subtracts other sources of disability income from the gross benefit amount to arrive at a net benefit payable by the insurer. LTD example at a 60 percent benefit percentage and $1,000 social security payment: Worker's Monthly Predisability Income: $3,000 Gross Benefit - $3,000 x 60%: $1,800 Social Security Payment: -$1,000 Net Benefit: $800

Americans with Disabilities Act (ADA)

A federal civil-rights law, enacted in 1990, that forbids discrimination of various sorts against person with physical or mental handicaps. Its primary emphasis is on enabling these persons to enter the job market and remain employed, but it also outlaws most physical barriers in public accommodations, transportation, telecommunications, and government services. The Americans with Disabilities Amendment Act of 2008 amended the definition of disability to make it easier to establish a disability within the meaning of the ADA. Portions of the Act dealing with accessible design were further revised in 2010

Patient Protection and Affordable Care Act (PPACA)

A federal law that was enacted with a goal of overhauling the U.S. healthcare system. Often referred to as the Affordable Care Act (ACA), Obamacare, or healthcare reform, the law is intended to make insurance companies more accountable, lower healthcare costs, guarantee more choice of providers and plans, make health care more affordable, expand preventive services, and promote the use of health information technology

Salary Continuation

A formal continuation of a payroll plan that is designed to mimic disability coverage. Usually an extension of an employer's payroll practice they usually do not enjoy the protection of ERISA, nor are they regulated under ERISA.

Return to Work (RTW) Programs

A formal process used by employers to encourage workers with disabilities to return to work. May include "return to work" incentives, which are financial inducements to encourage claimants to return to work by allowing the claimant to collect up to 100 percent of predisability earnings from both partial work earnings and the insurer's benefit

Traditional LTD or STD

A group disability plan that is not voluntary

Under Enrolled

A group insurance plan whose participation rate is below that which the underwriter anticipated. For traditional contributory LTD, the enrollment rate is 75%, anything less and the plan is under enrolled. For voluntary disability, the participation or enrollment rate can vary by carrier, but minimums are on the order of the greater of five to fifteen enrolled lives and 15 to 25 percent participation

Manual Rates

A group insurer's theoretical or book rates. These are developed using actuarially-driven factors that can be applied to a group's specific characteristics such as age, gender mix, occupation, and plan design to determine the "ideal" rate for that group

C

A lesson about regulation and legislation carriers have learned over time is: a. carriers can predict how events will unfold b. these things have minimal effect, if any, on the disability business c. some carriers can respond positively to changes in regulation and legislation and prosper d. all carriers respond similarly by changes in regulation and legislation

D

A lesson from the economic cycle with its depressions and boom times for disability insurers was: a. all carriers will suffer from poor economic times b. only high interest rates can result in profitability for disability insurers c. the economic cycle has no effect on disability insurance and its insurers d. the economic cycle can affect disability insurance in a negative way, yet some carriers have developed the expertise to minimize the effect of trying economic times

A

A lesson insurers learn periodically is: a. carriers and underwriters who submit to pressure to lower rates, liberalize benefits and contracts, periodically see poor profit results as a consequence b. rich plan provisions, liberal contracts and underwriting have no effect over time on profitability c. lower rates can be offset by high growth d. liberal underwriting can be made up for at renewal

Consumer Price Index (CPI)

A measure of inflation published by the U.S. Department of Labor. CPI-W is the index for Urban Wage Earners and Clerical Workers, which is focused specifically on wage inflation and is used by most insurers to index predisability earnings

Proportionate Loss Formula

A method for calculating benefits Monthly Benefit = ((A-B)/A) X C A = Predisability Monthly Earnings B = Current Income While Disabled C = Monthly Benefit if Totally Disabled

Monthly Income Loss Formula

A method for calculating benefits: Predisability earnings - Work earnings = Monthly Income Loss Monthly Income Loss x Benefit Percentage - Offsets = Net Monthly Benefit

Straight Offset, Nonspecified Benefit Calculation Method

A method for calculating benefits: Predisability earnings x benefit percentage = gross benefit. Gross Benefit - Offsets (including work income) = net monthly benefit

Noncontributory

A method of funding group plan in which the employer pays the entire premium, i.e. the employee does not contribute premium

Self-Funded (or Self-Insured)

A method of operating a group benefits plan in which the plan sponsor (often the employer) takes on the responsibility of operating a plan as an alternative to paying a monthly premium to an insurer in exchange for disability protection under a group policy. The plan sponsor typically seeks out experts to help run the plan, such as third party administrators or group disability insurers. The advantage of this "do-it-yourself" approach can be a significant savings in cost of the plan as well as more autonomy in the administration of the plan

Reflex Sympathy Dystrophy Syndrome (RSDS)

A neurological syndrome characterized by disabling plan. Also known as Complex Regional Pain Syndrome (CRPS)

Functional Limitation

A problem that prevents a person from completing a range of tasks. The effects are manifested in the performance or performance capacity of the person as a whole

No Loss/No Gain (Continuity of Coverage)

A provision of the policy that protects a covered employee upon change of carrier. The idea that the person will not lose coverage simply due to a change of carrier.

Mental Illness Limitation

A restriction in a policy that limits the duration of benefits if the individual is disabled from a mental disease and is not confined in an institution

Cash Sickness Plan

A state-mandated benefits plan that requires that employers with employees working in certain states provide income loss replacement for nonoccupational injuries or illness. May be referred to as "statutory disability"

B

According to an Accenture 2010 survey, what percentage of Americans say they trust insurers to do what is right? a. 60% b. 40% c. 50% d. 30%

C

According to the 2010 US census, approximately what percentage of Americans considered themselves disabled? a. 1 percent b. 6 percent c. 19 percent d. 52 percent

Federal Insurance Contribution Act (FICA)

Act that requires employers and employees to be taxed on wages for social security and medicare. FICA and medicare taxes are often referred to as "payroll taxes"

State Unemployment Tax Act (SUTA)

Act that requires employers to pay a payroll tax on wages to support state unemployment programs

Federal Unemployment Tax Act (FUTA)

Act that requires employers to pay a payroll tax on wages to support the federal unemployment programs

D

All of the following are reasons disability insurance is a good value to employees except: a. disability insurers can provide services to a disabled employee to help the employee get on with life b. disability insurance frees the employee from the financial worry of lost income due to a disability c. applying for group disability is simple as no health information and income verification is necessary d. disability insurance is expensive

Performance Guarantee

An agreement between the policyholder and the insurer in which the insurer agrees to meet stipulated performance requirements, most commonly applied to claim payments. For example, a common performance guarantee is that the insurer pay 90 of STD claims within five business days of receipt of a "perfected" (claim with complete information) claim. If the insurer fails to meet the agreed upon performance standards, the insurer pays a penalty to the policyholder or may reduce the next premium payment

Voluntary Plan

An employee benefit plan funded entirely by the employee and usually allowing a lower participation (25 percent or more) than a traditional contributory plan that requires 75 percent participation minimum as a rule. Voluntary plans can be written using a group or individual contract

Contributory

An employee benefit plan in which premium is split between the employer and employee

100% Contributory

An employee benefit plan in which the entire premium is paid by the employee

Whistleblower

An employee who alerts the employer or insurer to potential fraudulent actions on the part of another employee who is a disability insurance claimant

C

An employee works for a company headquartered in California. The employee lives in New Jersey and commutes to work in New York. She vacations two weeks every year in Puerto Rico. Which state's level of benefits is the employer required to provide to the employee? a. California b. New Jersey c. New York d. Puerto Rico

Chronic Fatigue Syndrome

An illness characterized by prolonged, debilitating fatigue and multiple nonspecific symptoms such as headaches, recurrent sore throats, muscle or joint pains, and cognitive complaints

Preexisting Condition (Pre-X, Pre-Ex, PEC)

An important risk management tool for disability underwriters and claims professionals. This exclusion provides protection against deliberate plan abuses that may result from anti-selection. Specifically, disabilities resulting from disorders that existed prior to coverage that occurred during a specified initial coverage period are not covered under the LTD plan. The options for preexisting condition period (time before effective date of coverage), treatment free period (if applicable), and preexisting condition exclusion period (number of months insured) are standard across the industry

Normal Retirement Age

As stated in the 1983 revision of the United States Social Security Act

Incidence (of claim)

As used in disability insurance the term refers to the frequency of claims, usually expressed in number of claims per 1,000 workers per year. For example, in STD the incidence is usually expressed in number of claims per 1,000 workers per year. In LTD the incidence generally runs three to five claims per 1,000 covered workers per year. The exact incidence for an employer is determined by a number of factors, including the benefit design of the disability program and the age and occupation of the covered workers.

Early Intervention

As used in disability, this term refers to getting access to a worker newly disabled early in the worker's disability. This early intervention is thought to help a worker with a disability return to work than an initial contact with the worker after an extended period of time. Generally it is thought that initial contact or early intervention must occur as soon as possible after the worker becomes disabled.

C

At which point do SSDI benefits cease for a disabled claimant? a. when the dependents are no longer eligible b. when spouse reaches NRA c. when the claimant reaches NRA d. Age 70

Payment in Arrears

Benefit payments are made after a period has elapsed. For example, the social security and statutory disability benefits are paid after a period of time, such as at the end of the month

Employee Assistance Program (EAP)

Benefit programs offered to employees and supervisory staff by many employers. Provide counseling and referral support services for emotional, legal, financial, and work life needs. Are intended to help employees deal with the broad range of stressors an problems that might disrupt their lives and to help employees be as productive as possible despite challenging circumstances at home or at work.

D

Besides the cost advantages inherent in group insurance, the other major factors leading to the growth of employee benefits include all but which of the following: a. wage freezes in WWII and the Korean War b. A supreme court decision permitting labor unions to negotiate benefits on behalf of members c. internal revenue code providing tax incentives d. increase in number of insurers offering employee benefits

Step Rates (Age Banded Rates or Age Bracketed Rates)

Billing rates, typically used on group voluntary cases, that provide rates based on different age bands.

Which statutory state has the longest duration maximum (fifty-two weeks)? a. Hawaii b. Delaware c. California d. New Jersey

C

Cost of Living Adjustment (COLA)

COLA is an optional benefit that increases the benefit payable to a claimant by some predetermined amount on an annual basis to take inflation into account

A

Carriers coming in and out of the disability market and events such as mergers and acquisitions coupled with the long tail nature of Long-Term disability insurance show the wisdom in: a. selecting a carrier who can manage the business and will be in the business for the long haul b. not being concerned about who the carrier is as they are all regulated equally c. selecting the fastest growing carrier d. selecting the carrier with the lowest rate

Exclusions

Certain causes of illness, accident or injury are specifically not covered, or excluded from coverage under a policy

C

Data about health shows: a. people are dying at earlier ages b. people are living longer and healthier lives c. people are living longer but not necessarily healthier lives d. the number of people in the US with disabilities is declining

B

Data about obesity shows: a. the rate of obesity in the US is declining b. the rate of obesity in the US is growing and it has an effect on health c. the rate of disability in the US is growing but it does not have an effect on health d. there is no reliable data on obesity and health

A

During the 1960s and 1970s, group carriers began using product features and policy language to: a. differentiate themselves due to competitive pressures b. develop a pretext for denying claims as profits plunged c. replace group medical and dental coverage d. discourage employees from enrolling int he plans as profits plunged

D

Employees do not need disability insurance because: a. SSDI provides fully for the needs of all employees b. Workers Comp covers most injuries and illnesses on and off the job c. the odds of disability are small and the financial consequences are minimal d. people do not need disability insurance due to large gaps in SSDI and workers compensation and the significant financial consequence of losing one's income

C

Group Long Term Disability started coordinating or integrating with SSDI to: a. provide a duplication of benefits b. determine if LTD should be payable based on the SSDI benefit decision c. avoid overinsurance as a result of receiving both SSDI and LTD d. ensure higher paid workers had a richer benefit

D

Group disability insurance, especially LTD has its roots in: a. health insurance b. workers compensation c. SSDI d. Individual Disability Insurance

Long-Term Disability (LTD)

Group insurance program that pays a monthly benefit for income lost due to injury or illness. major characteristics are: benefit is a percentage of lost income - typically 60 percent; Benefit payments begin after a long elimination period (EP), typically 90 or 180 days; Maximum duration of benefits may continue until normal retirement age is reached

Short Term Disability (STD)

Group insurance program that pays a weekly benefit for income lost as a result of an injury or illness. Major characteristics are: benefit is a percentage of lost income - commonly 60%; the benefit starts after a short elimination period or EP, commonly seven-day EP with benefits commencing on the eighth day; the duration of benefit is set at a specified number of weeks with thirteen weeks and twenty-six weeks being most common

State Filing

Group insurers are required to file their contract language with the state insurance departments. The language is reviewed by the insurance department to ensure that is is written to comply with existing state laws and legislative requirements. State filing is a valuable consumer-protection function that the state Departments of Insurance provide.

A

Group insurers file their contract language with: a. the state insurance department b. the DOL c. the department of commerce d. ERISA

B

Historically, which type of the following groups were most preferred by group disability insurers? a. semi-skilled, blue collar workers b. highly motivated professional white collar groups such as doctors and lawyers c. military personnel d. seasonal and part-time employees

A

How disabled must a claimant be in order to meet the social security definition? a. unable to perform any kind of "substantial gainful activity" anywhere in the economy b. unable to perform own job c. unable to perform the activities of daily living d. unable to work a full, forty-hour work week in previous occupation

D

How does ADEA apply to retired workers who are eligible for group benefits? a. the law requires retirees to be reduced on a cost-justified basis b. the law prevents retiree benefits from being reduced whatsoever c. the law requires insurers to cover employees who have retired beyond normal retirement age d. the law has no impact on retirees

B

How long is the elimination period before becoming eligible for SSDI benefit payments? a. 1 month b. 5 full months c. at least 12 continuous months d. there is no waiting period

D

How many insurance carriers are selling group disability coverage in the market today? a. ten b. fifteen c. twenty d. more than thirty

IRS Revenue Ruling 2004-55

IRS ruling that permitted an employer to amend a noncontributory disability plan to allow any employee to make an annual irrevocable election to have the value of the employer paid premiums included in the employee's taxable wages and thus receive a nontaxable benefit at point of claim

Pregnancy Discrimination Act

In 1978, the U.S. Congress passed this act, an amendment to the sex discrimination section of the Civil Rights Act of 1964. This act prohibits discrimination due to pregnancy: "...pregnancy, childbirth, or related medical conditions shall be treated the same for all employment-related purposes, included receipt of benefits under fringe benefit programs, as other persons not so affected but similar in their ability or inability to work..."

Time Value Adjustment

In an experience evaluation, the amount that Paid Claims and reserves are discounted due to the time value of money. Insurers account for and credit the policyholder for the use of the premium to meet benefit payments and reserving requirements over time

Turnaround Time

In claim-paying operations, the time from initial claims (complete) submission to the date the claim decision is (made) communicated

Ombudsman

In insurance, an employee who is authorized by an employer to investigate claims by other employees concerning the possibility of fraudulent activity on the part of other employees who are disability insurance claimants. Remains anonymity of the employee providing the tip and reports information to the employer for investigation by the insurer's fraud investigation unit

Nonintegrated Benefit

In reference to disability insurance, it is a benefit that is generally a flat dollar amount, like $1,000 monthly or weekly. The benefit amount is not offset or integrated with other income sources such as social security disability income

C

In the event an employee becomes disabled, disability claims management is designed to: a. cut claimants off from benefits as quickly as possible b. pay claimants 100% of their predisability earnings c. help employees return to an active, productive lifestyle whenever feasible d. Guarantee the employee their position in the company, regardless of their disabling condition

B

In today's employment environment, getting a job when one has a disability: a. easier than those who are non-disabled because of the protections afforded under the Americans with Disabilities Act b. difficult c. prohibited if a person is receiving group disability benefits d. easier, according to statistics showing decreasing employment rate for the disabled

D

In which jurisdiction do statutory disability benefits include a modest burial benefit and accidental death and dismemberment benefit? a. California b. New Jersey c. New York d. Puerto Rico

Offsets

Include other sources of income, such a sick leave or workers' compensation payments

Third Party Administrator (TPA)

Independent specialty organizations hired as contractors to perform specific tasks related to a group benefits plan. Typically, a plan sponsor (employer) would hire a TPA to help fun the self-funded plan and perform such services as claims administration and adjudication

Indirect Costs of Disability

Intangible or hidden costs the employer incurs, as a result of a disability. Some examples are recruiting costs, training costs, lowered morale, overtime, replacement employees, etc. Some of these costs have been quantified in various studies to indicate that the indirect costs of disability can run 8 percent of an employer's payroll

D

Integrated Disability is commonly referred to as the coordination of: a. employee group life, statutory disability, and autocoverage b. the ADA and the ADEA c. Blue collar groups with the same level of coverage as white collar groups d. workers compensation, employee benefit disability, and employee health coverage

Situs

Legal Term used to describe the location (state) in which a group policy will be issued. The policy provisions must comply with the state mandates of the issuance of "situs" state. The situs state is often the state in which an employer is headquartered.

ICD-10 Codes

Medical term used to describe "International Classification of Diseases" codes. Claims examiners use these codes in order to determine the precise diagnosis the treating physicians(s) have assigned to the claimant's condition. Having such a code enables the examiner to investigate the "Average" claim duration, typical complications, and expected course of treatment. In 2015, ICD 10 was fully implemented, replacing ICD 9

CPT-4 Code

Medical term used to describe "current procedural terminology." Claims examiners use these codes in order to determine exactly the type of procedure, surgery, and/or treatment the claimant has undergone or needs to undergo

Salary Split

Method for determining the amount of premiums on a disability benefit plan in which the split is based on some fixed dollar amount of employee wages. For example: first $30,000 of wages is employer paid and any employee with wages in excess pays the remaining premium

Percentage Split

Method for determining the amount of premiums on an employee benefit plan in which the split is based on some percentage between the employer and employees. Such a plan could be any split amount such as 90 percent employer funded and 10 percent employee funded or 10 percent employer funded and 90 percent employee funded

Three-Year Look Back Rule

Method used by the IRS to determine the taxability of disability benefits on a contributory plan. The IRS looks at employer contributions to the plan compared to overall plan costs for the three calendar years prior to the date of disability to determine the ratio of taxable benefits

Fringe Benefits

Noncash benefits provided to employees that are often designed to assist them in performing a necessary job function. Includes items such as discounts, transportation, food, lodging, and non-cost services. Fringe benefits are regulated by Internal Revenue Code section 132.

C

Of the following, which would NOT be considered a fiduciary responsibility of an ERISA plan? a. maintenance and communication of claim-handing procedures b. adequate written notice regarding claim denials c. maintenance of work site safety and loss control d. description of time limits to resolve a claim

A

On which basis is statutory disability customarily written? a. nonoccupational b. occupational c. 24 hour coverage d. conventional

C

Once a person has been disabled for a prolonged period (2 years) the following is true: a. the odds of recovery increase b. the odds are the person will die within 5 years c. the odds are the disability will last five years or longer d. the odds are the person will recover in five years or sooner

C

Population data shows: a. we as a nation are getting younger, which should reduce disability b. we as a nation are getting younger, which should increase disability c. we as a nation are getting older, which should increase disability d. we as a nation are getting older, which should reduce disability

Rehabilitation

Process of assisting a person with an ongoing impairment that resulted from a disability back to functioning as fully as possible. In the workplace it refers to getting the person back to work after a disability

Termination of Benefits

Reason or event that causes an employee, who was approved for benefits, to cease receiving benefits under a policy

Termination of Coverage

Reason that an employee's coverage or eligibility for benefits under the policy stops or terminates

Extraterritoriality (ET)

Refers to how a law enacted in one state can apply to the residents of that state even if the policy situs is in another state. Some states look solely to the place where services are delivered or policies are issued to determine jurisdiction, while others look at additional factors such as location of an employer or the residence of the insurer

Direct Costs of Disability

Refers to the costs employers pay that are expressly for disability. Examples of these include: premium payment for workers compensation, STD and LTD, and sick pay.

Covered Payroll (CP)

Refers to the dollar amount of the employer's payroll that is covered under the group disability plan. It can also refer to an individual's salary that is insured by the plan, so that the employer's CP is the sum of the covered employees' CP. The covered payroll of an individual is capped based on maximum benefit. The maximum covered salary for an individual is found by dividing the maximum benefit by the benefit percentage. Any salary ab ove this amount is not covered.

Substance Abuse Limitation, Drug and Alcohol Limitation

Restrictions in the policy that limit the duration of benefits if the individual is disabled due to substance or alcohol abuse and not confined in an institution

Standard Industry Classification (SIC) and North American Industry Classification System (NAICS)

SIC code was established by the Department of Labor, which categorizes all businesses - profit or not for profit - in the American economy. The code contains four digits. This code is used to describe the type of business a particular entity engages in. The 1997 NAICS is a six digit system that has replaced the SIC system

A

SSDI replaces high percentage of pre-disability income for: a. lower paid workers b. high paid workers c. all workers d. Only blue collar workers

Sick Banks

Similar in nature to Sick Leave, but these programs generally allow the employee to accumulate sick leave days year to year. Some programs only allow a carry over for one year. Then days are lost from the bank after the second year. Some employers (notably government and education) permit employees to "bank" unused sick days for their entire span of employment

Paid Time Off (PTO)

Similar to sick banks, but PTO includes all causes of absence, including sickness, vacation, etc. PTO plans may have limitation about accumulated or carry-over days from one year to the next, particularly if the accumulated time can be exchanged for cash

Residual Disability

Situation where the employee can perform some, but not all of the essential duties of his own occupation during and after the elimination period, and is earning more than 20 percent but less than 80 percent of his predisability earnings

A

Small business owners are unlikely to recognize their employees' need for disability insurance: a. If they do not see their own need for it b. because existing laws make providing disability coverage too difficult c. because most owners do not know them or care about them as evidenced in historically high turnover rates d. because the cost will likely drive them out of business

B

Statistics show: a. people of working age are more likely to die than become disabled b. people of working age are more likely to become disabled than to die c. people of working age should be more concerned with on the job injuries than other causes of disability d. death rates have increased while disability rates have declined

D

Statutory disability plans typically place limits on how much of the premium the employer: a. can get reimbursed from the state b. can get reimbursed from the federal government c. decides to allocate for group Life and medical coverage d. may require employees to pay for the statutory coverage

Partial Disability

Term used in group disability insurance contract when a disabled employee is able to return to work in a "partial" capacity. This can be by either performing some of the normal duties of the occupation on a full-time basis or all of the duties on a part time basis.

STD Incurral Period

Term used to describe a period of time, commonly a running twelve months, not necessarily tied to the policy anniversary date

Offset

Term used to describe a reduction in group disability benefit payment because of the existence of another source of benefits to which the claimant may be entitled. Offsets are sometimes referred to as "other income benefits" in the group policy. Group insurers routinely offset against other sources so that the sum of the other source and the insurer's offset payment equal the amount the employee would have originally received from the insure if no offset existed. For example, assume an LTD claimant was entitled to a monthly benefit payment of $1,250. Further assume the claimant had another source of monthly benefits in the amount of $600. The insurer would offset for the $600 and pay the claimant the difference ($1,250 - $600 offset = $650). The insurer paid $650, but the total between both sources was $1,250. See also "integration"

Incurral Period

Term used to describe a snapshot in time, commonly a twelve-month period. The term is derived from the "incurral" date of the LTD claim. Regardless of when the claim is paid, the claims will be attributed back to the period in which the claim was initially incurred (based on date of disability)

Independent Medical Exam (IME)

Term used to describe an exam conducted by a physician who is disinterested in the outcome of the claim. Requested by the insurer to ensure that the medical evaluation of the client is objective, when the examiner has conflicting medical data from the treating physician, and/or when there is limited objective evidence to support the claim

Nonoccupational

Term used to describe coverage for a disability occurring while the employee is away from work. Disability occurring while at work is not covered

Flat Dollar Benefits

Term used to describe disability benefits that are expressed as a whole dollar amount. $500 per week flat STD benefit, or a $3,000 per month flat LTD benefit.

Credibility

Term used to describe the believability or reliability of experience data as a predictor of future experience results

Runout of Runoff Claims

Term used to describe the claims that are paid after a period of liability has ended. Claims that are initially incurred during the active policy period are considered runouts if they are paid after the period of coverage or after case cancellation date.

Marginally Disabled

Term used to describe the health condition of an active employee that threatens to prevent the employee from working and becoming disabled. A person with this condition is one who manages to go to work and who has found ways to cope with the pain and/or limitaitons of the health condition. For example, an employee with severe arthritis goes to work everyday. Unless and until the arthritis causes a crisis and prevents the employee from working (and possibly become disabled), the employee is marginally disabled.

Death Spiral

Term used to describe the rate disintegration of a voluntary group insurance plan that suffers from insufficient participation. As the underwriter raises the rates to support the risk, the best risks leave the plan because of the increased cost. The worst risks remain, causing another increase in rates to support the worsening experience generated by these deteriorating risks.

Taxable Wage Base

That amount of salary on which FICA, FUTA, and SUTA are based. The FICA taxable wage base is published by the IRS and changes (increases) each year

A

The ADA promotes claimants' return to work efforts by: a. offering tax incentives to employer who make such workplace modifications b. supplementing the salary of returning disabled employees c. removing any liability the employer may have while the employee is at the workplace d. requiring group insurance carriers to make workplace modifications for any interested claimant

Age Discrimination in Employment Act (ADEA)

The Age Discrimination in Employment Act (ADEA) of 1967 prohibits employment discrimination against persons 40 years of age or older in the United States. It also sets standards for pensions and benefits provided by employers and requires that information about the needs of older workers be provided to the general public

C

The NAIC insurance Fraud Prevention Model Act recommends the following for a person convicted of insurance fraud: a. mandatory minimum prison sentence b. mandatory maximum fines c. full monetary restitution d. summary executions

Primary Insurance Award (PIA)

The amount of social security retirement of disability benefits for which a worker qualifies

A

The changes to the FMLA regulations effective in 2009 required employers to: a. provide up to 12 weeks leave for a qualifying military exigency b. provide up to 26 weeks leave for qualifying military exigency c. provide up to 12 weeks leave for care to a family member for care of an injured service member d. provide 26 weeks to next of kin for a qualifying military exigency

C

The cost of disability to employers: a. cannot be estimated b. can be estimated and is insignificant c. can be estimated and is significant d. can be estimated, but should not be a concern for employer

A

The following factors arose out of individual disability insurers' experience in the depression and became early themes for group disability: a. Restrictive policies and benefits, careful underwriting, and development of disability expertise b. liberal policies, rich benefits, and liberal underwriting c. coordination with social security d. growth of employee benefits

D

The lack of clear, meaningful disability communication material to employers and employees coupled with hyper-focus on medical insurance has: a. raised awareness of group disability coverage as a great value b. caused group disability carriers to give up their past communication efforts c. driven prices for disability coverage to be on the same level as medical d. Fueled the perception that group disability products are overly complicated

D

The market for disability is characterized as: a. largely unsaturated and the only opportunity is for larger employers b. largely saturated for small employers c. largely unsaturated, especially for larger employers d. largely unsaturated, especially for small employers

Monthly Maximum Benefit

The maximum benefit the insurer is willing to provide to a claimant on a monthly basis regardless of the individual's salary

Reserve

The money that an insurance company sets aside to pay future claim amounts that arise from a claim that already has been filed

A

The most recent changes in the ADA revolved around: a. the regulations make it easier for individuals to establish coverage under the "regarded as" part of the definition of disability in the ADA b. the change made it easier for public places to become more accessible c. the regulations required private buildings adhere to public accessibility provisions d. the change made it harder for people with disabilities to establish coverage under the "regarded as" part of the definition of disability in the ADA

Composite Rates

The practice in voluntary policyholder billing of using one rate for the entire group or class, regardless of age. This insures that the case or class with have a single rate

Indexing

The process of adjusting predisability earnings of a claimant who also has work earnings. Indexing prevents premature loss of benefits due to work earnings exceeding the "standard" 80 percent (or 60 percent) of earnings test

Worksite Modification

The process of altering a workplace to permit a person with an impairment to perform a job or job function

Job Accomodation

The process of an employer modifying the duties of a job to permit a person with an impairment to perform that job or job function

Dovetailing or Dovetail

The process of ensuring the Short-Term Disability (STD) benefits align appropriately with the Long-Term Disability (LTD) benefits. For example, having the STD maximum benefit duration be coincident with the start of the LTD benefit payment period (end of the LTD elimination period)

Classing Out

The process of sorting employees to be covered into different groupings so that benefits that are most appropriate for each class can be designed

Replacement Ratio

The ratio of the amount of disability income benefit the worker receives compared to the amount of income or predisability wages of the worker. (Frequently calculated on post-tax benefits and wages by underwriters.) Most STD and LTD programs are designed for a 60 percent replacement ratio

A

The single biggest reason employees cite for not having disability insurance is: a. cost b. access to coverage c. lack of information about the products d. complexity of the products

Eligibility

The term means an employee's ability to apply for coverage under a group plan. Group plans define which employees of a company are eligible for benefits under the plan

Elimination Period (EP)

The time period that begins when a disability first occurs and ends when the worker is eligible for benefit payments.

Waiting Period

The time the plan requires an employee be employed before the employee is eligible for coverage under a group plan.

Fully Insured

The traditional method of covering employees with a group plan. The employer or plan sponsor remits premium to the group insurer in exchange for the full array of legally-binding services and claim-paying responsibilities associated with the issuance of a policy. The terms "fully insured" and "self funded" are used to distinguish the two distinct methods of operating a group plan.

D

The typical cost of LTD per employee per year is approximately a. $2,000 b. $1,500 c. $1,000 d. $180-$400

Compound Annual Growth Rate

The year over year growth rate of an investment or other financial measure over a specific period of time. The compound annual growth rate is calculated by using the following formula

Evidence of Insurability (or Evidence of Good Health)

These terms all apply to the process in which an employee must supply some sort of information about the employee's health in order to obtain benefits under a group plan. While sometimes called medical underwriting, the process itself and the medical information gathered by the insurer is nowhere near as comprehensive as for individual insurance. The phrase short form underwriting refers to the minimal number of questions frequently used in this process

C

This 1993 federal legislation requires employers with 50 or more employees to provide unpaid leave for up to 12 weeks to address serious personal or family medical issues: a. ADA b. civil right act/pregnancy discrimination act c. FMLA d. ADEA

B

This federal legislation requires employers to treat pregnancy-related disability the same as any other disability: a. ADA b. civil right act/pregnancy discrimination act c. FMLA d. ADEA

Social Security Disability Insurance (SSDI)

This federal program provides assistance to people with disabilities who have worked long enough and paid enough social security taxes qualify. Family members of disabled individuals also may qualify for benefits.

Booklet (or Certificate)

This is sometimes referred to simply as the "booklet" or the "cert." The booklet/certificate is the document issued by the insurer that is made available to each employee who is covered in the group plan. The "booklet" describes eligibility, benefits, and plan provisions. It is a legal document certifying that the employee has coverage

Plan Sponsor

This term is typically associated with the person(s) or entity that has the fiduciary responsibility for the establishment and maintenance of the group benefits plan under ERISA. Makes the decisions related to how the plan is structured and operates and is responsible for the financial integrity of the plan. The plan sponsor has come to be synonymous with the policyholder

Internal Revenue Code (IRC)

Title 26 of the United States Tax Code. It is the codified domestic tax law of the United states including laws covering the income tax, payroll taxes and excise taxes

C

To meet the social security definition of disabled, how long must the disability be expected to last? a. 1 month b. 6 months c. 12 continuous months d. there is no minimum length

A

Under ERISA, a claim fiduciary is responsible for: a. ensuring that processes are in place to attain fair and objective claims handling b. obtaining workers compensation coverage for claims c. preempting the group policy language when necessary d. completing the claim form for the claimant

B

Under FMLA, which coverage is the employer required to continue during the employee's absence a. Life b. Health c. STD d. LTD

Subjective Conditions (or self-reported conditions)

Under a self-reported symptom limitation, companies limit the benefit duration for disorders whose primary diagnostics features are those reported symptoms that are not verifiable or quantifiable using generally accepted medical tests, procedures, or clinical examinations. Most companies include such symptoms as headaches, pain, fatigue, stiffness, soreness, ringing in ears, dizziness, numbness and loss of energy

B

Under most states' Workers Compensation formulas, a worker suffering a Permanent Total Disability usually has wages continued for: a. 12 weeks to match FMLA b. the duration of disability up to NRA c. the same amount of time allowed under an individually-purchased disability policy d. life, including benefits for the surviving spouse for life

B

Under the ADA, an employer may be exempted from complying with a particular employee's need if that need: a. occurs for an employer with 15 or more employees b. causes the employer an undue hardship c. is only temporary d. costs more than $25 per year to accomodate

Claim Pick

Underwriting term used to describe the claims data used for rate projection purposes. The underwriter picks the length of time in the claims base and often uses different picks for modeling different projection outcomes

Life Years

Used in the credibility formula of an underwriting analysis. It is the average number of lives covered in the plan in a year, or portions of years. If the multiple years of experience are used, the underwriter will add up the average lives for each year being considered. The more life years, the higher the group's credibility

A

Veterans disability benefits are typically: a. not considered an offset in most group disability contracts b. the largest offset in most group disability contracts c. used to exclude veterans from obtaining group disability coverage d. used by SS to deny coverage to veterans

D

Ways in which employers can provide disability insurance at no cost or at small cost to them include: a. 100% contributory b. Contributory c. Voluntary d. All of the above

Disability

What constitutes disability is defined by terms of the policy, but can vary from carrier to carrier. Generally it is accepted that there are degrees of disability - total, partial, and residual, although this terminology may vary as well.

B

What employer recommendations can help protect whistleblowers from repercussions when reporting possible insurance fraud? a. the employer offers a cash reward b. the employer appoints an employee to act as ombudsman c. the employer offers immunity to employees who report violations d. the employer discourages employees from reporting potential fraud in the first place

C

What impact, if any, is there for an employer headquartered in Nebraska with New York employees who fails to comply with New York statutory requirements? a. The New York employees are automatically covered by the state b. The employer will be shut down by the State of New York c. the employer could be subject to fines d. no impact; business as usual

C

What is a recommended employer strategy designed to limit or reduce disability fraud? a. encourage employees to participate in a wellness program b. encourage employees to remain out of work when in doubt being able to return c. clearly communicate their position on fraud and where the employer will side in the event of a disability claims investigation d. encourage employees to enroll in the group disability plan only when they absolutely need the coverage

D

What is an advantage of a disabled worker being approved for SSDI? a. they are not required to reimburse the group insurer for any SSDI award b. they no longer have to pay state or federal income tax c. they are no longer required to submit proof of continued disability to the SSA d. They may become eligible for Medicare after 24 months of disability payments

C

What is the ERISA "pre-emption" a. ERISA prohibits states from making laws regarding the regulation of group benefits b. ERISA protection to employers is suspended for a particular employer c. ERISA provisions take precedence over conflicting state law regarding benefits plans d. ERISA automatically applies, even to non-ERISA entities for their own protection

A

What is the estimated percentage of group disability claims tainted by some form of fraud? a. 3% to 5% b. 10% to 12% c. 18% to 21% d. 24% to 27%

C

What is the primary source of regulation of the insurance industry? a. general accounting office b. department of commerce c. state insurance departments d. department of health and human services

B

What is the purpose of a "benefit offset" in a group disability contract? a. to increase the claimant's total benefit payment from all sources b. to reduce the group benefit based on other sources of income in order to lower the potential of over-insurance c. to ensure the claimant receives at least 100% of their predisability earnings d. to reduce or take away government-sponsored benefits from employees who have individual or group disability coverage

A

What is the standard definition of disability for statutory coverage? a. own occupation b. any occupation c. definition established by SSA d. must match the definition established in group medical contract

B

What is the standard elimination period for statutory disability plans? a. 1 day accident, 7 day sickness b. 7 day accident, 7 day sickness c. 15 day accident, 15 day sickness d. 26 day accident, 26 day sickness

A

What size employers are impacting by the ADEA? a. Employer with 20 or more employees b. Employers with ten or more employees c. Employers with at least 1,000 employees d. All size employers

Family Social Security

When a social security disability insurance (SSDI) claimant starts receiving disability benefits, (the individual's award is termed the primary award) certain members of the family also may qualify for benefits on the claimant's record. Benefits may be paid to the claimant for a spouse, divorced spouse, children, and disabled children. Each family member may be eligible for a monthly benefit of up to 50 percent of the claimant's primary award. However, there is a limit to the total amount of money that can be paid to the claimant on the claimant's Social Security record. The limit varies, but it is between 150 and 180 percent of the claimant's primary award. If the sum of the benefits payable on the claimant's account is greater than the family limit, the benefits to the family members will be reduced proportionately. The claimant's Primary Award is not affected.

Presenteeism

When an employee is present at work but not fully engaged due to almost any reason: a cold, worry about a sick child at home, depression, etc.

D

Which activities would a fraud claims specialist NOT engage in while investigating fraud allegations? a. checking of public records b. interview(s) with the claimant c. video surveillance d. wiretapping

D

Which diagnostic grouping accounted for the highest percentage of disabling conditions for LTD in 2011? a. Fractures b. Cancer/Neoplasm c. Digestive System Disease d. Musculoskeletal/Connective Disorder

A

Which group is most likely to opt out of the social security system? a. government entities such as municipalities b. construction workers c. maritime workers d. retail sales

A

Which group would likely have the highest replacement ratio in a primary SSDI award? a. minimum wage earners, $1,000 and under of monthly income b. middle wage earners, $3,000 - $4,000 of monthly income c. higher wage earners, more than $5,000 of monthly income d. Government employees

D

Which jurisdiction considers a claimant's dependents when calculating the statutory disability benefits? a. California b. New York c. Puerto Rico d. Rhode Island

D

Which jurisdiction requires that a statutory disability claims adjudicator have a claim office within its jurisdiction? a. California and New Jersey b. New York and Rhode Island c. New Jersey and New York d. Hawaii and Puerto Rico

C

Which level of law governs group insurance fraud committed by a claimant? a. International level (Interpol) b. National level (ERISA) c. State laws d. municipal laws (civil court)

A

Which might be considered a warning sign of disability fraud? a. claimant refuses to provide claims examiner a physical address b. claimant calls claims examiner to question benefit payments c. claimant calls state department of insurance to complain about a delay in benefit payments d. claimant does not have a valid driver's license

C

Which of the following states does NOT allow no-fault auto payments as an offset in an group policy? a. West Virginia b. Kansas c. New Jersey d. Arizona

D

Which state does NOT require statutory STD benefits? a. Hawaii b. New York c. New Jersey d. Oregon

C

Which statutory state does NOT have a state-operated statutory disability plan? a. California b. New York c. Hawaii d. Rhode Island

C

Which type of fraud was reported on most frequently by the news media in 2008? a. disability b. life insurance c. medical d. business arson

C

Which type of worker is customarily exempt from statutory disability coverage? a. part-time employees b. full-time personal or domestic workers c. full-time high school students d. employees working for charitable organizations

D

Which type of workers are usually covered under the Jones Act? a. construction workers b. retail workers c. factory workers d. maritime workers

Preexisting Condition Exclusion

While common in LTD, STD plans generally do not contain clauses that exclude pre-existing conditions discourage their use

C

Why are states so circumspect in authorizing employers to self-fund a statutory disability program? a. they are concerned that the federal government will seize or freeze self-funded plan assets b. most employers are incapable of proper self-funding plan administration c. they want to ensure employees' rights are protected and the plan has sufficient funding d. the states do NOT have concerns with self-funding a statutory disability plan

A

Workers Compensation Benefits are offset in many states for other potential sources of disability benefits such as: a. unemployment benefits while disabled, Social Security retirement, or Old Age Benefits b. 401(k) savings and defined contribution pension plans c. personal savings or assets acquired while working for the employer d. spouse's income and shared assets after date of marriage

A

Workers at what age are affected by the ADEA? a. forty and older b. fifty and older c. sixty five and older d. there is not age impact

B

Workers compensation is considered "no fault" insurance because: a. workers who injure themselves on the job are never at fault b. it alleviates the need for the employee to sue the employer in order to file for benefits c. employer cannot be found at fault for unsafe working conditions d. WC is a subset of the automobile insurance laws of the various states

C

Workers compensation laws are formulated: a. under the terms of ERISA b. by federal legislation c. by state legislation d. by the unions of the industries that are covered by worker's compensation

Proof of Loss

a formal statement made to an insurer, offering evidence to support a claim, including he fact that a loss has occurred, as well as the amount of the loss. This is necessary for the insurer to proceed to the next step of determining the extent of liability.

Own Occupation

a portion of the definition of disability that refers to the individual's specific occupation (but not specific job)

Minimum Benefit

a provision commonly found in disability contracts that establishes a benefit amount that a disabled person is guaranteed to receive regardless of any other disability income. For example, the minimum benefit may be states at $50, $100, or the greater of 10 percent of $100. The minimum benefit is paid if an integration calculation results in either a very small benefit or no benefit otherwise due from the insurer.

Recurrent Disability

a provision in the policy that protects a claimant who recovers and returns to work for a specified period and subsequently goes back out on disability from the same cause without jeopardizing the claimant's status for continued benefits

Post-Tax Premiums

paying for benefits by an employee with employee money that has already been taxed for federal and state taxes

Pre-tax Premiums

premiums that can employee can pay for with pre-tax dollars, often using a Section 125 plan. This is a common feature in cafeteria or flexible benefit plans

Antiselection

situation in which someone with a known condition that may result in an impending insurance claim applies for insurance

Payment in Advance

situations in which payments are made in advance of work being done

Total Disability

term often used in group disability contract language and sometimes in government-provided insurance to refer to employees whoa re so severely disabled that they are able to work less than 20 percent of their normal work week or not at all. It does not necessarily mean such employees are permanently disabled, although a totally disabled person might be permanently disabled

Managed Disability

term used to describe any disability program, insurance plan, or services that attempt to reduce incidence or duration of disabilities among a population of employees

Occupational

term used to describe coverage for disability occurring while the employee is at work

Seasonality

term used to describe fluctuations in claim patterns attributed to the time of the year. For example, certain industries' claims patterns are sometimes impacted during the cold and flu season or during the summer school vacation.

Participation Rate

term used to describe the ratio of employees who purchase voluntary product compared to all eligible employees. If there were 1,000 eligible employees and 500 purchased, the participation rate would be 500/1,000 or 50%.

Predisability Earnings

the earnings of an individual prior to the individual's date of disability

Carrier Assignment of Cases

the methods by which a carrier assigns cases for adjudication

Carrier Intake Process

the methods by which a carrier is informed of a claim (submission by paper, fax/image, telephonic, internet)

Carrier Claim Decision Processes

the methods by which a carrier makes decisions upon claims that have been submitted

Loss Ratio

the ratio of paid (or incurred) claims divided by premium

Any Occupation

the term refers to an occupation the claimant is reasonably suited for through experience, education, training, and salary

Accident & Sickness Plans (A&S)

weekly benefits paid to a worker unable to work due to an injury or illness. These programs predated-and ultimately evolved into-what is now known as short-term disability insurance. Also known as weekly sick pay, weekly disability, weekly income, or disability income.

Co-occuring (or comorbid) claims

where a claimant has more than one diagnoses, each of which may be a contributing factor in the disabling condition (e.g., hypertension preceding and/or following a stroke, depression following a heart attack).