Chapter 1 - Health and Accident Insurance
Medical Expense Insurance
-your standard health care insurance -includes plans that cover hospital care, surgical expenses, doctor visits, and outpatient care, along with most of your other basic medical expenses
Franchise Health Plans
-provides health coverage for small groups whose #s are too small to qualify for true group insurance
Eligible Groups
-qualify for a group health insurance, applicants must be a part of a group formed for a reason other than just obtaining health insurance
Cobra
-requires employers with 20 or more employees to extend group health coverage to terminated employees and their families
Business Overhead Expense Insurance
-sold to small business owners who must continue to meet overhead expenses such as rent, utilities, and payroll -reimburses business owners for the actual overhead expenses incurred while the business owner is totally disabled -does not reimburse the business owner for their salary
All students attending a large university could be covered by
a blanket policy explanation: blanket health insurance is issued to cover a group who may be exposed to the same risks
which of the following is the reimbursement of benefits for the treatment of a beneficiaries injuries caused by a third party? a.indemnity b.subrogation c.legal action d. consideration
b subrogation explanation: subrogation is the right for an insurer to pursue a third party that caused an insurance loss to the insured
Which statement is true regarding a minor beneficiary?
b. Normally, a guardian is required to be appointed in the Beneficiary clause of the contract
difference between group and blanket is
blanket health policies do not issue certificates
Contributory plan
both the employees and the employer pay part of the premiums and 75% of all eligible employees must participate
Premium factors
-how health insurance is paid for -premiums can be paid annually, semi, quarterly, or monthly
Business Needs
-in addition to protecting individuals against the possible loss of income due to a disability, disability income policies are also used to protect businesses
Conversion Privilege
-members of a group have the ability to convert their policy to an individual plan
How does group insurance differ from individual insurance?
-premiums are lower for group insurance
Disability Buy-Sell
-Buy-sell is a legal agreement that specifies how a business will pass between owners when one of the owners dies or becomes disabled
Tax Treatment of Group Plans
-Employers are entitled to take a tax deduction for premium contributions they make to an employee group health plan as long as the contributions represent ordinary and necessary business expense
Factors that enter into premium
-Interest -expenses -types of benefits -morbity -age -sex -occupation
Pre-existing conditions
-an individual may be excluded from group coverage for up to a year for any conditions in which the individual sought treatment 6 months prior to the enrollment date
Maternity Benefits
-any policy of health insurance that provides coverage for maternity care must also cover the services of certified nurse-midwives, and services of licensed birth centers -in addition the insurance company cannot limit the length of stay for maternity or new borns that are less than medically necessary
Non-contributory
-employer pays the entire premium and 100% of the employees must participate
If employee dies, how long will spouse be covered for cobra regulations?
36 months
3 Basic Categories of Health Coverage
Medical Expense Insurance Disability Income Insurance Accidental Death and Dismemberment Insurance
A business overhead expense
covers business expenses such as rent and utilities
What is issued to each employee of an employer health plan? a. provision b. receipt c. policy d. certificate
d. certificate
Which statement is TRUE regarding a group accident & health policy issued to an employer>
employer receives the policy, employee is issued a certificate
disability buy-out
just as with the life insurance buy sell agreement, the disability buyout agreement specifies who will purchase a disabled partner's interest and legally obligates that person or party to purchase the business interest of the disabled partner
an accident policy will most likely pay a benefit for a
off the job accident
Accidental Death and Dismemberment Insurance
provides a beneficiary with a lump-sum death benefit in the event of accidental death of the insured -it will also pay a living benefit for dismemberment
Disability Income Insurance
provides replacement income when wages are lost due to a disability -it does not cover medical expenses associated with a disability, but provides a guaranteed flow of income while the person is disabled
Health Insurance
refers to the broad field of insurance plans that provide protection against the financial consequences of illness, accident, injury and disability -Health insurance is designed to provide coverage for accidents and sickness -funded by regular premium payments