Accident, Health, or Sickness Basics

Massachusetts Child health insurance program

A combination of state-initiated and medicaid expansion programs that provides insurance for children in low-income families.

Notice of information practices

Agents are required to disclose to a prospect the facts about information collection practices, as well as the products they are proposing to sell.

Every insurance company must establish...

at all times maintain a system of control over the content, form, and method of dissemination's (spreading) of all ads on their policies. The insurer whose policies are advertised is responsible for all these ads regardless of who wrote, created, presented or distributed the ads.

Pre-existing conditions

conditions for which the insured has received diagnosis, advice, care, or treatment during a specific time period prior to the application for health coverage

Creditable coverage

coverage of an individual under serval kinds of health plans with no lapse of coverage for more than 63 days. provided they are over the age of 18, residents of common wealth and individuals that have become residents within the past 63 days are required to obtain creditable coverage for as long as it is affordable.

The commissioner of insurance in this state..

makes rules and regulations that establish minimum standards for complete and fair disclosure of info in accident and health insurance policies These rules are intended to: standardize and simplify coverage to permit an applicant to understand policy terms and compare coverages, eliminate misleading or confusing provisions in the purchase of insurance or in the settlement of claims, eliminate deceptive sales practices, limited coverages that are so limited that they are no substantial economic value to the policyholder. Insurers that do not comply risk losing approval for that particular policy.

A "notice to the applicant"...

must be issued to all applicants for health insurance coverage. This notice informs the applicant that a credit report will be ordered concerning his or her past history and any other health insurance for which they have previously applied. The agent must leave this notice with the applicant.

Qualified medical expenses paid for participants in a medical savings account are (MSA)

not taxable

Moral hazard is a significant factor in health insurance underwriting because..

of the possibility of malingering (exaggeration, partial truth) It is the agent, not the home office underwriter who actually has personal contact with the applicant. It is the responsibility of the agent to ask the applicants questions clearly and precisely and to record the answers accurately.

Producers liability errors and omissions

if agents and brokers engage in misrepresentation during the replacement of health insurance, they may be exposed to errors and omissions liability as well as having their insurance licenses suspended or revoked.

Health benefit plans may not..

include pre-existing condition provisions excluding coverage for a period beyond 6 months (following the date of enrollment).

Insurance is offered in two different ways

individual or group

Classes of health insurance policies

individual vs group private vs government limited vs comprehensive

Substandard risks

reflect an increase risk of loss. These applicants may be able to obtain health insurance but an at increased premium. An applicant could be rated substandard for a poor health history or a Dangerous vocation(job) or avocation( hobby)

Massachusetts individual magnate for minimum creditable coverage requires...

individuals to have health insurance even if they already have accident/sickness insurance. Mass will be maintaining its minimum creditable coverage program even with the adoption of the federal affordable care act

Signatures

Every health insurance application requires the signature of the proposed insured, the policy owner (if different than the insured), and the agent who solicits the insurance

What are the two types of expenses that are covered by health insurance?

Expenses related to health care expenses that compensate for loss of income

If the insurer requires an applicant to take an HIV test...

the insurer must first obtain the applicants written consent for the test. The consent form must explain the purpose of the test and inform the applicant about the confidentiality of the result, and procedures for notifying the applicant about the results. If they require them to take a test.. the insurer must notify the applicant of a positive result no later than 45 days from the blood sample.

When underwriting health insurance policies...

the prime considerations are age, gender, occupation, physical condition, avocations, moral and morale hazards, and financial status of the applicant.

Steps in the underwriting process

Field underwriting - by agent company underwriting premium determination policy delivery effective date of coverage - if the premium is not paid with the application the agent must obtain the premium and a statement of continued good health at the time of policy delivery

Attending physician statement

If the underwriter deems necessary, an APS will be sent to the applicants doctor to be completed. This is best for accurate info on the applicants medical history. The physician can explain what the applicant was treated for, the treatment required, the length of treatment and recovery and the prognosis.

Capital sum

In case of loss of sight or accidental dismemberment, a percentage of that principal sum will be paid by the policy. The amount will depend on the severity of the injury. Partial coverage paid

Statement of Good Health

In most cases, The initial premium is not paid until the policy is delivered. Most insurance companies require that when the agent collects the premium, he or she must also obtain a statement signed by the insured testifying to his/her continued good health.

Massachusetts individual mandate for minimum creditable coverage

In order to avoid paying a penalty to the mess department of revenue, residents are required to maintain a low threshold health benefit plan.

Required notice to insured

In order to make sure the insured is aware that the policy's benefits are limited, the insurance company must BY LAW plainly state the limited policy notice on the first page of the policy. " THIS IS A LIMITED POLCY "

Routine and major restorative care

Includes treatments such as cavities, oral surgery, bridges and dentures. These procedures are covered up to a specific maximum subject to an annual deductible per insured family member and a coinsurance.

Annual deductible limit rule

The maximum amount that can be contributed to an MSA is 65% of the high-deductible plan for individuals or 75% of the family deductible for those with family coverage.

Sales interview and policy delivery are..

The most common occasions for errors and omissions (e&o) situations to occur that may result in providing inadequate coverage or failure to maintain and service coverage.

Who must sign a health insurance application?

The policyowner, the insured (if different), and the agent

Deductible

The portion of the loss that is to be paid by the insured before any claim benefits may be paid by the insurer.

Declined risks

The underwriter feels that the applicant is too high a risk and is declined.

Producer report

Number of reports utilized by the underwriter in determining the underwriting outcome of any particular application.

Investigative Consumer Report (Inspection)

Obtained through investigation, general reports of the applicant's finances, character, work, hobbies, and habits that supplement the information of the application. Subject to rules an regulations outlined in Fair Credit Reporting Act.

MSA Eligibility

Only available to small employers; with 50 or fewer employees) or a self-employed person. Generally , participants in the plan cannot have medicare or any other health coverage that is not a high deductible health plan (HDHP)

Principal sum

Paid for accidental death. This amount is usually equal to the amount of overage under the insurance contract or the face amount.

Important underwriting factors in accepting or classifying health insurance applicants:

Physical condition of the applicant and other insureds Moral or morale hazards occupation

Which of the following is the most common time for errors and omission to occur?

Policy delivery and sales interview

risk classification

Preferred, standard, substandard, declined. Once the underwriter collects and reviews all information on the applicant, they will make a decision to accept or decline the applicant. Accepted applicants fall into the three categories: Preferred, standard, substandard

Private vs Government

Private insurance companies provide the large portion of all individual and group health insurance. The federal government provides coverage for some disabled individuals and those over age 65 in the form of medicare and medicaid. Medicaid offers assistance as both a federal and state sponsored program, The govt also offers disability insurance protections through the social security system.

longterm care expense

Provides benefits for medically necessary services which one receives in a nursing home or perhaps in one's own home (home health care), but not care received in an acute care unit of a hospital.

Preferred risks

Reflect a reduced risk of loss and are covered at a reduced rate. Nonsmokers would be an example

Standard risks

Reflects average exposures and may be insured at standard rates and premiums

Vision care

Some employers provide this form of group health insurance to their employees to cover eye examinations and eyeglasses, or hearing aids on a limited basis. Know that per the affordable care act, pediatric video benefits are mandatory.

Dependent

Someone relying on the insured for support

In the event of accidental death, how much will the policy pay?

Sometimes policies will pay double or triple indemnity, meaning twice or three times the face amount Most policies will pay the accident death benefit as long as the death is caused by the accident and occurs within 90 days.

Additional health coverages permitted with MSA's

Workers compensation, specific disease or illness, a find amount per day of hospitalization, accidents and/or disability, dental care, vision care, and long-term care.

Waiting period

a period of time that must pass after a loss occurs before the insurer starts paying policy benefits

A producer's function as the field underwriter is to..

gather credible information from an applicant that would assist the underwriter in screening marginal or unacceptable risks before taking an application for an insurance policy.

Comprehensive Coverage

health insurance that provides coverage for most types of medical expenses

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

hospital indemnity

Two ways to correct an application:

1. the best way is to simply start over with a new application 2. if the first way is not practical, draw a line through the incorrect answer and insert the correct one. The applicant MUST initial the correct answer.

How much will the policy pay for in the event of the loss of both eyes or two or more limbs?

100%

Anyone that filed an income tax return as a resident of commonwealth must indicate whether they have had creditable coverage in force for each of the previous ___ months

12 months if a taxpayer does not comply with this, the commissioner is permitted to retain any amount overpaid for creditable coverage -- provided it doesn't exceed 50% of the minimum insurance premium for that coverage. Individuals may above this penalty by finding an affidavit stating that religious beliefs formed the basis of their refusal of creditable coverage.

Health benefit plans are prohibited from including waiting periods that exclude coverage for more than...

4 months (following the date of enrollment) When eligible individuals or groups change from one health benefit plan to another, a new waiting period may be employed for up to 4 months. No waiting period may be imposed if an insured is eligible for creditable coverage for 18 months prior to the date of enrollment.

Most hospital policies will pay the accidental death benefits if the death is caused by an accident and occurs within how many days?

90 days

Dental and vision expense

A form of medical expense health insurance that covers the treatment, care and prevention of dental disease and injury to the insured teeth. An important feature of the plan which is not typically found in medical expensive insurance plans is the inclusion of diagnostic and preventive care (teeth cleaning, fluoride treatment, etc. ) some dental plans require periodic exams as a condition for continued coverage.

Pre-existing condition

A medical contain for which the insured sought medical advice or treatment within a specified period of time prior to the policy issue. Very important consideration when replacing a policy. Health conditions covered under the current policy may not be covered under the new policy because of pre-existing condition limitations, or new waiting periods may be required in the new policy.

Hospital or Medical Expense

A medical expense contract covers many of the expenses one incurs from an accident or sickness, such as a physician or hospital expense. Expenses may be paid directly to the insured and the insured would be responsible for paying the medical expenses. This type of benefit payment is called reimbursement. If expenses are paid on a scheduled basis, the insurance companies will refer to a list determining the cost of the treatment and it will only pay to a certain amount. If a person were a dependent under their spouses insurance, payment of medical expenses would be coordinated.

Life and Health Insurance Guaranty Association

A nonprofit legal entity created to protect policyowners, insured, and beneficiaries against insolvent(unable to pay debts) insurers within certain limitations. All licensed insurers are members of the guaranty association and must remain members as a condition of their authority to do business in this state. When a company goes bankrupt, all other member of the association contribute to help financially the policyowners of the insolvent company.

What is a capital sum in Accidental death and dismemberment coverage?

A percentage of the principal sum (whole)

Income limit rule

A person cannot contribute more than what was earned for the year from the employer through whom the person has a high deductible health plan (HDHP)

Enrolee

A person enrolled in a health insurance plan, an insured (doesn't include dependents of the insured)

Credit Disability

A policy that is issued only to those in debt to a specific creditor. In case of the borrowers disability, payment to the creditor will be made on the loan until the disabled borrower is able to return to work.

Limited benefits

A variety of health insurance policies provide limited coverage for specific accidents or sickness. These contracts must specify the type of accident or sickness covered, limited perils and amounts of coverage. Benefits may ne paid on an expense-paid (reimbursement) basis or indemnity basis (make whole)

Types of limited policies

Accident - coverage for disability medicare death or dismemberment resulting from an accident Dread disease policy - variety of benefits for a specific disease such an cancer policy or heart disease policy Critical illness - pays a lump sum to the insured upon diagnosis and survival hospital indemnity - provides a specific amount on a daily or monthly basis while the insured is confined to a hospital dental plans - covers treatment, care and prevention of dental disease and injury to the insureds teeth vision/hearing plans - type of group insurance that covers eye exams and eyeglasses, or hearing aids on a limited basis Credit disability - covers payments or loans if the insured become disabled prescription drugs - the insured pay a copay and the insurer pay the rest of the balance

AD&D

Accidental Death and Dismemberment: coverage can be written as a rider or as a separate policy. Provides a lump sum benefit, in the event that the insured dies from an accident as defined in the policy. Only pays for accidental losses and is thus considered a pure form of accident insurance.

Two major causes of perils

Accidental injury or sickness Policies may cover accident and sickness or accident only

Producers marketing requirements

Advertising, Sales presentations, outline coverage, life and health insurance guaranty association

Field underwriting

Agent & Application Specific underwriting requirements will vary by insurer. Far more important in health insurance than in life Basic purpose is to minimize the problem of adverse selection.

Completeness and Accuracy

Agent must take special care with the accuracy of the application in the interest of both the company and the insured. Because the application is often the main source of underwriting information, it is the agents responsibility to make certain that the application is filled out completely, correctly, and to the best of the applicants knowledge.

A notice to applicant regarding replacement must be signed and submitted with the application when...

An applicant intends to replace an existing individual health coverage plan The notice must include: certain health conditions may not be covered under the new policy which can result in denied claims for benefits that may have been payable under the present policy certain new waiting periods may apply questions in the app for the new policy must be answered truthfully and completely recommendations to seek advice of the insured's present carrier.

Copayment

An arrangement in which an insured must pay a specified amount for services "up front" and the provider pays the remainder of the cost.

Emergency medical condition

An emergency medical condition is one which is so sever in pain or symptoms that if not treated quickly and properly could cause serious bodily harm, possibly death.

In health insurance, what is considered a sickness?

An illness that first arises while the policy is in force

HSA Eligibility

An individual must be covered by a HDHP, must not be covered by other health insurance (does not apply to specific injury insurance or accident, disability, dental care, vision care, Long-term care), must not be eligible for medicare, and can't be claimed as a dependent on someone else's tax return.

Disclosure information about individuals

An insurance company cannot disclose any personal or privileged information about an individual unless any of the following occurs: a written authorization by the individual is provided to all of the following: -an insurance regulatory authority or law enforcement agency pursuant to the law, -an affiliate for an audit, but no further disclosure is to be made - a group policyholder for the purpose fo reporting claims experience - to an insurance company or self-insured plan for coordination of benefits - a lien holder, mortgagee, assignee or other persons having a legal or beneficial interest in a policy of insurance

Massachusetts replacement requirements

Any carrier providing replacement coverage for group hospital, medical, or surgical expenses or service benefits within 60 days from the day of discontinuance of a prior HMO contract or policy that provided the same benefits must immediately cover all enrollees who were covered under the previous HMO contract, regardless of any provisions of the contract relating to active employment or hospital confinement or pregnancy.

Genetic test

Any test that is conducted to determine the presence or absence of genetic characteristics in an individual. Insurance company's may not request an applicant for insurance or a blood relative to provide genetic info or to take genetic tests for underwriting or any other reason. Genetic info alone indicating predisposition to a disease cannot be deemed a pre-exiting condition. Neither can the insurance company consider the fact that a genetic test was taken or refused unless proposed insured wishes to submit genetic testing that is favorable.

What is the term used for a written request for an insurer to issue an insurance contract based on the provided information?

Application

Sources of underwriting information

Application, producer report, attending a physician statement, investigative consumer (inspection) report, medical information bureau(MIB), Medical examinations and lab tests (including HIV consent), use of genetic information

Limited policies

Are considered accident/sickness policies, rather than health insurance policies.

Common situations for errors and omissions

At any time during the sales process there can be a misunderstanding or misrepresentation that could lead to legal action being taken by the insured. Agrees should document everything, interviews, phone conversations, requests for information, etc.

Changes in the application

Because the app is so important, most companies require it be filed out in ink The agent might make a mistake when filling out the app or the applicant might answer a question incorrectly and want to change it.

Applicant procedures

Begins with a form provided by the company and completed by the agent as questions are asked of the applicant, and the responses are recorded. The form is then submitted to the insurance company for its approval or rejection. The applications written request to the insurance company to issue a policy or contract based upon the information contained in the application. If the policy issues, a copy of this application is stapled in the back of the policy and it becomes part of the entire contract.

Agent's Responsibilities during Replacement

Compare benefits, limitations and exclusions found in the current proposed replacement policy provide notice regarding replacement ensure that the current policy is not cancelled before the new policy is issued

MSA Contribution limits

Contributions must be made in cash or its equivalent. There are 2 limits on the amount the employee and employer can contribute to an MSA: The annual deductible limit, and an income limit.

Routine and preventative maintenance

Covered up to an annual maximum without a deductible or copayment. This coverage benefit usually includes routine examinations and teeth cleaning once a year, and perhaps full-mouth x-ray once every 3 years. The absence of deductible and copayment is intended to encourage preventive maintenance.

Blanket Insurance

Covers members of a particular group when they are participating in a particular activity. Such groups include students, campers, passengers on a common carrier, or sports team. Often covered insureds names are not known because they come and go. Unlike group health insurance the individuals are automatically covered, and they do not receive a certificate of insurance. Blanket policies are commonly written and pay on an accident-only basis.

Cost sharing

Deductible (paid first *insured always pays) set dollar amount the larger the deductible (the money you pay out of pocket first) the lower the premium Coinsurance paid after the deductible and after the insurer paid its share, always a percentage, the larger the coinsurance % for insured the lower the premium

Dental expense

Dental insurance distinguishes among several classes of dental expenses, and provides somewhat different treatment for each Classes include: Routine and preventative maintenance, routine and major restorative care, orthodontic care

Health savings accounts

Designed to help individuals save for qualified health expenses that they, their spouse, or their dependents incur. An individual who is covered by a high deductible health plan(HDHP) can make a tax-deductible contribution to an HSA, and use it to pay for out of pocket medical expenses. Contributions by an employer are not included in the individuals taxable income.

Medical savings account (MSA) definitions

Employer-funded account linked to a high-deductible medical insurance plan. The employer raises the medical plan deductible and returns all or part of the premium savings to the employees to contribute to the MSA. The employees then used the funds to cover health insurance deductibles during the years. If there is a balance at the end of the year, the employee may leave it in the account and earn interest or withdraw the remaining amount (as taxable income). If a distribution is made for a reason other than to pay for qualities medical expenses, the amount withdrawn will be subject to an income tax and an additional 20% tax.

Advertisement

Ensures truthful and adequate discloser of relevant information to the consumer to present unfair competition among insurers. Advertising rules apply to any accident and sickness insurance ads intended for presentation, distribution, dissemination, or other advertising use when used or made either directly or indirectly by or on behalf of the insurance company. Includes any printed, published material, descriptive literature and sales aids, prepared sales talks and presentations, and material included with a policy.

The life and health guaranty associations liability

Generally limited to those of impaired insurance company. The liability of the association may not exceed the lesser of the contractual obligations for which the insurance company is liable or the following amount with respect to any one life, regardless of the number of policies or contracts: $300,000 in life insurance health benefits, but not more than $100,00 in net cash surrender and net cash withdrawals values for life insurance $100,000 in health insurance benefits, including any net ash surrender and net cash withdrawal values. $100,00 in the present value of annuity benefit, including net cash surrender and ent cash withdrawal values

Health insurance

Generic terms encompassing several types of insurance contracts which, though related are designed to protect against different risks. There are two separate types of insurance included in the term "health insurance" One type: Provides coverage for expenses related to health care Second type: designed to provide payments for loss of income. Terminology to reference health care varies from state to state and even company to company. Most health insurance is written on a group basis from one's employer. Individual coverage may be available for a family but it would be medically underwritten.

Government plans

Health insurance policies exclude expenses either paid or eligible for payment under medicare or other federal, state, or local medical expense programs such as state child health programs.

Orthodontic care

If included, will have a separate maximum and a separate deductible, which may differ from the deductible for restorative care.

NAIC

National Association of Insurance Commissioners, an organization composed of insurance commissioners from all 50 states, the district of Columbia and the 4 U.S. territories. Formed to resolve insurance regulatory issues.

Adverse selection

Involves the fact that those most likely to have claims are those who are likely to seek insurance. An insurance company that has sound underwriting guidelines will avoid adverse selection more often than not. Note that the specific underwriting requirement will vary by insurer.

How much will the policy cover if you lose one hand or one foot?

It may only pay 50% of the loss

Limited vs. Comprehensive

Limited health insurance policies only cover specific accidents or diseases A comprehensive plan would cover all sickness or accidents that are not specifically excluded.

HSA Contribution limits

Linked to high deductible insurance. A person may obtain coverage under a qualified health insurance plan with established minimum deductibles ($1,400 for singled and $2,800 for families in 2020) Each year eligible individuals (or their employers) are allowed to save up to certain limits, regardless of their plan's deductible (current contribution limits are $3,550 for singles and $7,100 for families.) When opening an account an individual must be under the age of medicare eligibility. For tax payers aged 55 and older an additional contribution amount is allowed (up to $1,000). An HSA holder who uses the money for a non health expenditure pays tax on it, plus a 20% penalty. After age 65, a withdrawal used for a non health purpose will be taxed, but not penalized.

Loss of income from disability

Loss of income caused by accident and/or sickness causing an insured the inability to work and earn income is covered under disability income policies or coverages. Disability income insurance is a valued contract or stated amount that pays weekly or monthly benefits due to an injury or sickness. Benefits may be determined by the insured's past earnings and may be limited to a percentage of that income.

Principal types of losses and benefits

Loss of income from disability - caused by insures inability to work, hospital and medical expense - incurred from an accident or sickness, dental and vision expense 0 usually stand-alone plans; covers diagnostic and preventative, Long-term care expense - covers expenses for care in. a nursing home or in the insureds own home.

Producer responsibilities in individual accident, health or sickness insurance

Marketing requirements, Field underwriting, Common situations for errors and omissions,

MIB

Medical Information Bureau. A membership corporation owned by a member insurance companies. A nonprofit trade organization which receives adverse medical info from insurance combines and maintains confidential medical impairment info on individuals. reports on previous insurance info can be obtained from the MIB. Members of the MIB can require a report on an applicant and receive coded information from any other applications for insurance submitted to other MIB members. MIB information cannot be used in and of itself to decline a risk, but it can give the underwriter important additional information.

Medical examinations and lab tests (including HIV consent)

Medical examinations when required by the insurance company are conducted by physicians or paramedics at the insurance company's expense. Usually exams are not required with regard to health insurance, making the recording of medical information on the application by the agent more important. More common with life insurance underwriting. If an insurer requests an exam, the insurer is responsible for the costs.

Sales presentations

Must be accurate and complete. Sales materials include any and all promotional materials, policy applications, replacement forms, outline of coverage and any other forms or information used in connection with solicitation or sale of accident and health insurance.

Outline coverage

Must be delivered at the time of application or upon delivery of the policy. With direct sales, however, the insurer does not have an opportunity to provide the outline of coverage at the time of application, so it is not required. The purpose of the outline of coverage provision is to provide full and fair disclosure to the applicant.

disclosure statement

Must be provided to the applicant at the time of application or the time of delivery. They must include: the actual policy provision when issued, and the following info: the name of the insurer, the description of the policy type and the policy number, any deductibles coinsurance and benefit maximums, renewability eligibility for medicare, any age limitations, whether the policy is subject to increase in premiums, and any limitations and waiting periods. IF the policy is not a medicare supplement, the disclosures must state that the policy is not a medicare supplement contract.

Disability income insurance

The health insurance policy that is designed to provide periodic payments when an insured is unable to work because of a sickness or injury.

Unfair Trade practice

To make any statement that an insurer's policies are guaranteed by the existence of the insurance guaranty association.

Premiums with the application

Under the terms of the insurability conditional receipt, the insurance coverage becomes effective as of the date of the receipt, provided the application is approved. The receipt is generally provided to the applicant when the initial premium is paid at the time of the application.

Where is information for the MIB coming from?

Underwriting disclosures made by applicants to MIB member insurers on prior applications

Underwriting requirements

Underwriting is important when replacement is involved. An underwriters duty to evaluate risk and decide whether or not a person is eligible for coverage. The insured may be under the assumption that a replacing policy is in their best interest, but after being evaluated by an underwrite where premium and risk are exchanged, an insured may not be paying the same premium or receiving the same benefits.

Individual Health insurance policies

Underwritten to cover the applicant, their spouse, and family. Many of the factors considered in life insurance underwriting apply however unlike life insurance where there can be only one death claim per insured, in health insurance multiple claims per insured is the rule. For this reason, underwriting and classification of risk is extremely important from an insurance company standpoint.

Prescription Drugs Coverage

Usually an optional benefit under a group medical policy. Generally the insured pays a copayment amount (like $10) and the insurance company pays the balance. There are generally limitations on quantities that one can purchase at one time (such as 30-day supply)

Benefits, limitations, and exclusions

When an agents replaces an insured current policy with a new one, they must be careful to not mislead the insured or provide coverage that is to the insureds detriment. It is the agents responsibility to compare the benefits, limitations, and exclusions in both new and old policies. The agent also must make sure the current policy is not cancelled before the new policy is issued.

Policy review

When delivering the policy, the agent should review the insured's original goals and needs. The policy should also be through reviewed with the insured.

Common health insurance exclusions

When it is excluded - it is NOT covered by health insurance intentionally self-inflicted injuries (not accidental), injuries sustained by war/military or act of war, elective cosmetic surgery (not accidental), treatment in government hospitals or facilities and participation in criminal activity, conditions covered by workers comp, expenses paid by the government

Riders

added to the basic insurance policy to add, modify or delete policy provisions

Nature of health insurance contracts

aleatory - unequal exchange personal - between the insurer and insured adhesion - "take it or leave it" unilateral - one-sided promise ~ one of the two parties are contractually obligate to do something (insurer contractually obligated to pay claim) Conditional - certain conditions must be met

When determining whether a pre-existing condition provision applies

all health benefit plans must credit the time the person was covered under prior coverage - if that coverage was continuous for at least 63 days prior to the request for new coverage... Coverage must be effective within 30 days of the date of application.

Specified (Dread) Disease

also known as limited risk; policy provides a variety of benefits for a specific disease such as cancer policy or heart disease policy. Benefits are usually paid as a scheduled, fixed-dollar amount of indemnity for specified events or medical procedures, such as hospital confinement or chemotherapy.

Application

an accurate/thorough application is imperative to the insurance company

Requirements at Delivery of Policy

an agent should personally deliver policies whenever possible even though policy delivery may be accomplished without physically delivering it. Once the delivery is made, the free-look period begins

Solicitation

an attempt to persuade a person to buy an insurance policy, and it can be done orally or in writing

Sickness

an illness, which first manifests itself while the policy is in force. The majority of health insurance claims results from sickness rather than accidental injury.

Accidental injury

an unforeseen and unintended injury that resulted from an accident rather than a sickness

Sources of insurability information

application - must be completed and signed producers/agents report - their observations about the applicant (can assist in underwriting) attending physician report - best for accurate info on applicants medical history investigative consumer report (inspection) - include info on an applicants character, general reputation, personal habits, and mode of living that is obtained through investigation MIB report - helps companies share adverse medical information on insureds

Process of underwriting

field underwriting - agent and applicant company underwriting - getting more formal information from your physician, MIB medical information bureau (snapshot from the past other applications applied for), credit reports risk classification - charge more premium average premium or preferred rate (low premium) , accept/decline applicant policy delivery - applicant signs statement of good health --> look to see if applicant is still in good health and gives premium

Underwriting for HIV or AIDs is..

permitted as long as it is not unfairly discriminatory. An adverse (unfavorable) underwriting decision is not permitted if based solely upon the presence of symptoms, but only is HIV is confirmed in relations to the symptoms. Insurance company must maintain strict confidentiality regarding HIV-related test results or diagnoses.

Minimum Creditable Coverage is designed to..

provide individuals with financial access to a Broad range of health care services, without incurring severe financial losses as a result of serious illness or injury.

Tax implications for individual contributions to a Health savings account are

tax deductible

In health insurance the policy itself and the insurance application form what?

the entire contract

underwriting criteria

the underwriters function is to select risks, which are acceptable to the insurance company. The selection criteria used in this process by law, must be only those items that are based on sound actuarial principles or expected experience. The underwriter cannot decline a risk based on blindness or deafness, genetic characteristics, marital status, or sexual orientation.

Insolvent

unable to meet financial obligations

Group health insurance

underwriting varies in important particulars from individual health insurance. As the purpose remains the same, Evaluation of the inherent hazard, assignment of the appropriate class, the premium rate, the techniques and the standards for evaluation are different.