Arkansas State Health Insurance

What is the typical deductible for basic surgical expense insurance

$0

elements of insurable risk

-due to chance -definite and measurable -statistically predictable -not catastrophic -randomly selected -large loss exposure

Covers hospital room and board, and miscellaneous expenses, such as lab and x-ray charges and medicines while insured is confined to a hospital

Basic hospital expense coverage

Replaces lost income in the event of a disability

Disability income insurance

Funded by salary reduction and employer contributions

Flexible Spending Accounts

What are the 2 types of Flexible Spending Accounts

Health Care Accounts and Dependent Care Accounts

Used in coordination with MSAs, HSAs, or HRAs. Features higher annual deductibles and out of pocket limits than traditional health plans which means lower premiums

High deductible health plans (HDHPs) and Related Health Savings Accounts (HSAs)

The annual contribution limit of a Dependent Care Flexible Spending Account is set by

IRS

Concerning insurance, the definition of a fiduciary is

a producer/broker who handles insurer funds in a trust capacity

the larger the number of people with a similar exposure to loss, the more predictable actual losses will be

law of large numbers

decrease in the value of an asset

loss

reduction of value; basis of claim

loss

a fact that would lead to a different underwriting decision had the insurer known about it

material fact

causes of loss

perils

What percentage of individually owned disability income benefits is taxable

0%

A combination of HMO and PPO plans; employees not locked into one plan; allowed to choose depending on the need for medical services

Point-of-service plans (POS)

Group of physicians and hospitals that contract to provide medical care services at a reduced fee

Preferred Provider Organizations (PPOs)

Regarding the taxation of Business Overhead policies,

Premiums are deductible, benefits are taxed.

the federal fair credit reporting act

Regulates consumer reports

supplement or replace benefits payable under Social Security Disability

Social Insurance Supplement (SIS)

classification of risks

Standard, Preferred, Substandard, Declined

two types of major medical policies

Supplemental Major Medical Policies and Comprehensive Major Medical Policies

"first-dollar coverage"

The insured is not required to pay a deductible.

What is the purpose of coinsurance provisions

To help the insurance company to prevent overutilization of the policy

In forming an insurance contract, when does acceptance usually occur?

When an insurer's underwriter approves coverage

How soon following the occurrence of a covered loss must an insured submit written proof of such loss to the insurance company?

Within 90 days or as soon as reasonably possible, but not to exceed 1 year

based on the principals actions or words

apparent authority

Provides coverage for nonsurgical physician's services. also can be purchased to cover emergency accident benefits, maternity benefits, mental and nervous disorders, hospice care, home health care, outpatient care, and nurses' expenses

basic medical expense coverage

certain conditions must be met

conditional

info collected from employment records, credit reports, and other public resources

consumer report

A health insurance policy that pays a lump sum if the insured suffers a heart attack or stroke is known as

critical illness

between insurer and insured

personal

types of hazards

physical moral morale

In a group health policy, a probationary period is intended for people who

Join the group after the effective date

Under the Accidental Death and Dismemberment (AD&D) coverage, what type of benefit will be paid to the beneficiary in the event of the insured's accidental death?

Principal Sum

Can an individual who belongs to a POS plan use an out of network physician?

Yes, and they may use any preferred physician, even if not part of the HMO

a deductible is

a specified dollar amount that the insured must pay first before the insurance company will pay the policy benefits

similar to a consumer report, but additional info is obtained through an investigation and interviews with associates, friends, or neighbors of the consumer

investigative consumer report

state of mind that causes indifference toward loss

morale hazard ex. "if I'm insured why should I worry?" careless client

*issues participating policies, owned by policyowners, pays to policyowners (return of unused premiums)

mutual insurers

When an agent receives the application and issues a conditional receipt, the insurer has

not yet approved the application or issued the policy

individual characteristics that increase the chances of the cause of a loss

physical hazard ex. "I've been a smoker since I was 16"

no more than 6 months; must pay premium for all of those months

policy backdating

reduced risk of loss; covered at reduced rate

preferred risk

two types of risk

pure and speculative

specifies period of time during with the recurrence of an injury or illness will be considered a continuation of a prior disability

recurrent disability

statements that are true to the best of the applicants knowledge

representations

possibility that a loss could occur

risk

type of risk that is loss or gain, financial gain

speculative (gambling)

average exposures; covered at standard rate

standard risk

*types of insurers

stock and mutual

*issues nonparticipating policies, owned by stockholders, pays dividends to stock holders (taxable as ordinary income)

stock insurers

increased risk of loss; covered at increased rate

substandard risk

What provision states that claims must be paid immediately upon written proof

time of payment of claims

For what reasons can a temporary license be issued

to service existing business

risk selection and classification process

underwriting

one sided promise

unilateral

honesty on both parts

utmost good faith

absolutely true statements

warranties (breach of warranties can void the policy)

In forming an insurance contract, when does acceptance usually occur

when an insurer's underwriter approves coverage

Law of Agency

-agents represent the insurer -knowledge of the agents=knowledge of the insurer -the insurer is responsible for the agents actions -payment to the agents=payment to the insurer

Attending Physician's Statement (APS)

-greater risk -need to obtain specific medical info -helps determine likelihood of claims -less expensive than a medical exam

What is a required advance notice for a hearing held by the Commissioner of Insurance

10 days

consumer must be advised in writing about the investigative consumer report within ___ days of request

3

If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?

5 days

Under the uniform required provisions, proof of loss under a health insurance policy normally should be filed within

90 days of a loss

Insuring of risks that are more prone to losses than the average risk

Adverse Selection

nonprofit trade organization comprised of member insurance companies; stores and shares medical information among member insurers; helps uncover misrepresentations and prevents concealment

Medical Information Bureau (MIB)

An insured wants to name her husband as the beneficiary of her health policy. She also wishes to retain all of the rights of ownership. The insured should have her husband named as what type of beneficiary?

Revocable

"take it or leave it"

adhesion

*certificate of authority; approved to transact insurance in a state

admitted; authorized insurer

unequal exchange

aleatory

*incorporated outside of the U.S.

alien insurer

In insurance, an offer is usually made when

an applicant submits an application to the insurer

Covers costs of surgeons' services, whether the surgery is performed in or out of the hospital

basic surgical expense coverage

intentional withholding of information of a material fact that is crucial in making an underwriting decision

concealment

states that coverage will be effective either on the date of application or the date of the medical exam, whichever occurs last, as long as the policy is issued as applied for

conditional receipt

too high a risk; not covered

declined risk

*incorporated in this state

domestic insurer

Agreement, consideration, competent parties, legal purpose

elements of a legal contract

The provision in a health insurance policy that ensures that the insurer can not refer to any document that is not contained in the contract is the

entire contract clause

written in contract

express authority

Agent Authority

express, implied, apparent

*incorporated in another state or territory

foreign insurer

intentional misrepresentation of a material fact, made with intent to deceive

fraud

3 parts of application

general information, medical information, agent's report

conditions that increase the probability of an insured loss

hazards

higher frequency of payment=_________ premium

higher

Which type of a hospital policy pays a fixed amount each day that the insured is in a hospital?

hospital indemnity

not written in contract, but assumed

implied authority

A life insurance policy has a legal purpose if both of which of the following elements exist? A. Insurable interest and consent B. Underwriting and reciprocity C. Offer and counteroffer D. Policyowners and named beneficiaries

insurable interest and consent

The transfer of risk

insurance

transfer of loss; protection

insurance

this type of insurance pays benefits for medical, surgical, and hospital costs

medical expense insurance

tendencies toward increased risk

moral hazard ex. "I lied on my insurance application" dishonest client

types of receipts

premium & conditional

the type of receipt that is issued when premiums are collected with the application

premium receipt

Specifies condition that qualify insured for full disability benefits

presumptive disability

serves as gatekeeper for HMOs

primary care physician

type of risk that is loss only, no financial gain

pure (insurance)