Benefits: Health Care
What is a single-payer health care system or universal healthcare system?
A system where the government regulates the health-care system and uses taxpayer dollars to fund health care the government ensures that all of its citizens have access to quality health care regardless of their ability to pay.
Which 4 areas of responsibility do state regulations on heath benefits address?
-Extending coverage to particular services, treatments, and health conditions (e.g., substance abuse treatment). -Reimbursing recognized health-care providers for health care services. - Individuals who must be covered by health-care policies (e.g., adopted children). - Length of time coverage must be available to employees who are terminating their employment.
How does the U.S. Bureau of labor statistics distinguish between the health care plan alternatives?
1) Is the plan an indemnity or prepaid plan? Indemnity plans reimburse the patient or the provider as medical expenses occur or afterward. Prepaid plans pay medical service providers a fixed amount based on the number of people enrolled, regardless of services received. 2) Does the plan have a network? A network is a specific group of doctors, hospitals, suppliers, and clinics who have contracted to provide services for an agreed rate. 3) Does the plan allow people to receive nonemergency care outside the network? This question identifies how restrictive the plan is regarding choice of medical providers. 4) Does the plan have more than two levels of coverage? This question determines if the plan is a point-of-service plan, which typically has several reimbursement levels depending on where enrollees receive services.
What are the 3 types of prescription drug plans?
1) The first, medical reimbursement plans, reimburse employees for some or all of the cost of prescription drugs. These plans are usually associated with self-funded or independent indemnity plans. Similar to indemnity plans, medical reimbursement plans pay benefits after an employee has met an annual deductible for the plan. After an employee has met the deductible, these plans offer coinsurance, usually 80 percent of the prescription drug cost, and the employee pays the difference. Maximum annual and lifetime benefits amounts vary based on the provisions set forth in the plan. -usually most expensive b/c pharmacies charge full-price and admin costs 2) prescription card program, operates similarly to managed care plans because it offers prepaid benefits with nominal copayments. The name arose from the common practice of pharmacies requiring the presentation of an identification card. Prescription card programs limit benefits to prescriptions filled at participating pharmacies, similar to managed care arrangements for medical treatment. Copayment amounts vary from $5 to $50 per prescription. The amount depends upon whether the prescriptions meet criteria set by the plan, including the use of generic alternatives and the categorization of prescription drugs on formularies. Formularies are lists of drugs proven to be clinically appropriate and cost effective. Participants pay lower copayments for prescription drugs that meet the established criteria. Prescription card programs may be associated with an independent insurer or as part of an established HMO 3) mail-order prescription drug program, dispenses expensive medications used to treat chronic health conditions such high blood pressure or high cholesterol. Typically, mail-order programs are offered in combination with prescription card programs. The copay is typically much less for mail-order purchases. A single mail-order program supplies medication to participants of many health insurance plans nationwide. Local pharmacies do not enjoy this advantage, because their patronage is much smaller and is limited to people who live in close proximity
What is a health maintenance organization?
A managed care plan where fixed periodic enrollment fees cover HMO members for all medically necessary services only if the services are delivered by health-care providers in the designated network and, approved by the HMO HMOs generally provide inpatient and outpatient care, emergency room care, as well as services from physicians, surgeons, and other health-care professionals. medical services usually either fully paid for or patient pays a copay Another type of HMO is the open-access HMO. These are prepaid plans and require the use of network health-care providers with one exception. In open-access HMO plans, emergency care outside the network is covered, which is not the case for traditional HMO plans. HMOs assign each member to a primary care physician or require each member to choose one. Primary care physicians determine when patients need the care of specialists. HMOs use primary care physicians to control costs by significantly reducing the number of unnecessary visits to specialists. HMOs require that patients make copayments. The most common HMO copayments apply to physician office visits, hospital admissions, prescription drugs, and emergency room services.
What are point-of-service plans?
A point-of-service (POS) plan combines features of fee-for-service systems and health maintenance organizations. Specifically, POS plans are almost identical to PPOs, except, like HMOs, POS plans require the selection of a primary car physician. Employees pay a nominal copayment for each visit to a designated network of physicians. In this regard, POS plans are similar to HMOs. Unlike HMOs, however, POS plans provide employees with the option to receive care
What are pre-existing provision clauses?
A preexisting condition is a condition for which medical advice, diagnosis, care, or treatment was received or recommended during a designated period preceding the beginning of coverage and for which coverage is excluded. Preexisting condition clauses were created to limit their liabilities for serious medical conditions that predate an individual's coverage. The PPACA prohibits the inclusion of preexisting clauses in any employer-sponsored plan, that is, even grandfathered plans can no longer impose a preexisting condition clause
What is the Health Maintenance Organization Act of 1973 and how does it apply to health benefits?
An act that encouraged employers to include HMOs as a choice in their benefits programs. Health maintenance organizations (HMOs), a particular type of managed care, are regulated at both the federal and state levels. HMOs have their own network of doctors, hospitals and other healthcare providers who have agreed to accept payment at a certain level for any services they provide. This allows the HMO to keep costs in check for its members. Under the dual choice requirement, employers with at least 25 employees had to offer at least one HMO as an alternative to a fee-for-service plan when an HMO formally offered its services to an employer's workforce. This was eliminated Now 1) employers now can negotiate rates based on the expected experience of their employee population.the premium amount varies by the likelihood that employees will use HMO services. HMOs and employers review recent usage of HMO services to predict future usage. 2) HMO Act promotes more equal competition because employers may not financially discriminate against employees who choose an HMO option. In other words, companies must make the same percentage contribution toward an HMO's premium as they do to provide other health-care plans. Employers whose employees tend to use HMO services more extensively pay higher premiums than employers whose employees tend to use HMO services less extensively.
What are some laws regarding maternity care benefits?
At the federal level, the Pregnancy Discrimination Act of 1978 (Chapter 3) prohibits employers from treating pregnancy less favorably than other medical conditions covered under employee-benefits plans. In addition, employers must treat pregnancy and childbirth the same way they treat other causes of disability. The Family and Medical Leave Act of 1993 entitles most male and female employees of private-sector companies with 50 or more employees and government organizations up to 12 unpaid workweeks of leave during any 12-month period because of the birth of a child (and other family- related reasons that are discussed in Chapter 8). The Newborns' and Mothers' Health Protection Act of 1996 sets minimum standards for the length of hospital stays for mothers and newborn children; it prohibits employers and all insurers (independent and self-funded indemnity plans, as well as managed care plans) from using financial incentives to shorten hospital stays. At the state level, some states require that employers offer maternity care benefits to employees if other health-care benefits are provided. These mandates exclude employers that offer health benefits through self-funded plans.
What are lifetime and yearly limits?
Back in the day! most health-care plans specified lifetime limits and yearly limits. Lifetime limits refers to the maximum amount a plan would for as long as a person receives coverage. Yearly limits refer to the maximum amount a plan would cover each year. Neither is permitted under PPACA
Which features do health care plans have in common?
Health-care plans share a number of features in common. These include: ▯▯ Deductible ▯▯ Coinsurance ▯▯ Out-of-Pocket Maximum ▯▯ Preexisting Condition Clauses ▯▯ Preadmission Certification ▯▯ Second Surgical Opinion ▯▯ Lifetime and Yearly Limits
What is a deductible and in what plan is it most common in?
Deductibles are common to fee for service plans Over a designated period, employees must pay for services (i.e., meet a deductible) before the plan pays benefits. The deductible amount ranges anywhere between $3,000 for care received within the network of approved providers and $5,800 for care provide outside the network. Fee-for-service plans usually apply separate deductible amounts for each type of coverage (i.e., hospitalization, surgical expenses, and physician expenses). In other words, insured individuals must pay a specified amount for hospitalization, surgical expenses, and physician expenses,respectively
What is a dental fee-for-service plan?
Dental fee-for-service plans have features similar to those of medical fee-forservice plans. These plans specify covered dental services based on a usual, customary, and reasonable charge. Dental fee-for-service plans also include deductibles (similar in amount to medical plans), coinsurance, and maximum benefits. Coinsurance rates often vary between 20 and 40 percent of usual, customary, and reasonable charges after the insured pays the deductible. Dental fee for-service plans usually set limits to the dollar amount of benefits over a subscriber's lifetime. These limits generally vary by procedure.
What is a Dental maintenance organizations, or dental HMO?
Dental maintenance organizations, or dental HMOs, are most similar to HMOs for medical care. Dental HMOs provide prepaid dental services. Participants are required to seek treatment from an approved provider, and they pay a nominal copayment. Sometimes, managed care providers offer members a choice between a dentist within the network of approved providers and a dentist outside the network. In this case, the level of prepaid benefits is significantly less for nonnetwork dentists, creating an incentive for members to seek treatment from an approved provider.
How does the U.S. Bureau of Labor Statistics determine if its a fee for service plan or managed care plan?
Determine if it is an indemnity plan or pre-paid plan Indemnity plans reimburse the patient or the provider as medical expenses occur or afterward. Prepaid plans pay medical service providers a fixed amount based on the number of people enrolled, regardless of services received
How does the Employee Retirement Income Security Act of 1974 (ERISA) apply to health benefits?
ERISA heavily governs the operation of pension plans and welfare plans. The definition of welfare plans encompasses medical, surgical, and hospital care and benefits, and benefits in the event of sickness Title I applies to Welfare Plans. - Reporting and disclosure. - Fiduciary responsibilities. - Continuation coverage. - Additional standards for group health plans, and group health-plan portability,access, and renewability requirements. Later provisions/ amendments -The Consolidated Omnibus Budget Reconciliation Act of 1985 established continuation coverage and additional standards for group health plans. -The Health Insurance Portability and Accountability Act of 1996 created standards for group health-plan portability, access, and renewability requirements. -*Women's Health and Cancer Rights Act of 1998, requires group health plans to provide medical and surgical benefits for mastectomies. Medical and surgical benefits must cover surgical reconstruction of either breast for a symmetrical appearance.
What is group coverage plan in regards to a fully insured health plan?
Extending coverage to most or all employees is considered group coverage , which is the basis for employer-sponsored health-care plans.
What are fee-for-service plans?
Fee-for-service plans provide protection against health care expenses in the form of a cash benefit paid to the employee or directly to the health care provider after receiving health-care services. These plans pay benefits on a reimbursement basis. Three types of eligible health expenses are hospital expenses, surgical expenses, and physician charges. DOES NOT rely on networks of healthcare providers
Why is there a financial disincentive to provide benefits to retirees?
First, the substantial increases in health-care costs and costs of medical plans have created a tremendous financial strain on companies that choose to offer them. Older individuals are also more apt of needing expensive meds etc Second, changes in company accounting practices have made offering health-care benefits to retirees less appealing. The Financial Accounting Standards Board (FASB), a nonprofit company responsible for improving standards of financial accounting and reporting in companies, implemented FAS 106 in 1990 and FAS 158 in 2005. Financial Accounting Standard (FAS) 106 is a rule that changed the method of how companies recognize the costs of nonpension retirement benefits, including health insurance, on financial balance sheets. This rule effectively reduces the amount of a company's net profit amount listed on the balance sheet by listing the costs of these benefits as an expense. In 2003, FASB instituted FAS 132, which requires that companies disclose substantial information about the economic value and costs of retiree health-care plans. The FASB maintains that health-care benefits are probably as significant to current employees and retirees as are defined benefit plans. Other FAS rules require clear disclosure of economic resources and obligations related to defined benefit plans. Thus, FAS 132 requires similar disclosure. As a result, companies without sufficient current assets to maintain retiree health-care plans are less likely to continue offering these benefits. In 2005, FAS 158 established requirements to enhance further transparency through accounting practices for other postretirement employee benefits.
What are the types of health accounts employers can use to defray the cost of medical care?
HSAs for HDHPs health reimbursement arrangements flexible spending accounts
What are the main laws influencing employee sponsored health plans?
Health Maintenance Organization Act of 1973, the Employee Retirement Income Security Act of 1974, the Americans with Disabilities Act of 1990, and the Patient Protection and Affordable Care Act of 2010
Health care in the U.S. is classified as a Multiple-payer system. What is a multiple-payer system?
In a multiple-payer system, more than one party is responsible for covering the cost of health care, including the government, employers, employees, or individuals not currently employed (e.g., retirees, the unemployed, coverage part-time employees, and independent contractors).
What is the difference between grandfathered plans and non-grandfathered plans under the Patient Protection and Affordable Care Act?
Individual and group health plans already in existence prior to enactment are referred to as grandfathered plans. New health plans (or preexisting plans that have been substantially modified after March 23, 2010) are referred to as non-grandfathered plans. Grandfathered plans could lose this status if at least one of the following modifications is made 1) Changing insurance carriers for individuals from what they were prior to PPACA. 2)Raising coinsurance by any amount. Coinsurance refers to the percentage of covered expenses paid by the insured. -smaller percentage-what employee pays, larger is what employer pays 3)Increasing copayments. Copayments represent fixed payments an individual makes as a condition of receiving services. Grandfathered status will be lost if copayments increase more than $5 plus the rate of medical inflation (e.g., 20 percent), or 15 percent higher than medical inflation (whichever is greater). 4) Increasing deductibles. The deductible refers to the amount an individual pays for health-care services before benefits become active. Grandfathered status will be lost if the increase exceeds the rate of medical inflation by 15 percent. 5) Increasing out-of-pocket maximums based on the aforementioned criterion. Out-of-pocket maximum refers to the maximum amount a policyholder must pay per year. 6) Eliminating or reducing benefits specific to certain health conditions. For example, a plan would lose its grandfathered status if it terminated benefits for the diagnosis or treatment of diabetes. 7)Reducing or eliminating coverage for one or more "essential benefits" will cause a grandfathered plan to lose this status. Essential benefits include items and services within the following 10 categories: -Ambulatory patient services -Emergency services -Hospitalization -Maternity and newborn care -Mental health and substance use disorder services, including behavioral health treatment -Prescription drugs -Rehabilitative services and devices - Laboratory services -Preventive and wellness services and chronic disease management -Pediatric services, including oral and vision care
What are individual practice associations (IPAs)? (HMOs)
Individual practice associations (IPAs) are partnerships of independent physicians, health professionals, and group practices. IPAs charge lower fees to designated populations of employees (e.g., Company A's workforce) than fees charged to others. Physicians who participate in this type of HMO practice from their own facilities and continue to see HMO enrollees and patients who are not HMO enrollees.
What is the contractual relationship that specifies the amount the insurer pays for medical claims?
Insurance policy
How does the Patient Protection and Affordable Care Act (PPACA) of 2010 apply to health benefits?
It is a comprehensive law that mandates health insurance coverage and sets minimum standards for insurance. Two mandates: Individual mandate and employer mandate 1) Individual mandate: requires that individuals who can afford to purchase health insurance must do so either by participating in an employer-sponsored plan or by purchasing health insurance coverage independently. 2) Employer Mandate (as of 2016): requires that companies with at least 50 employees are required to offer affordable health insurance to its full-time employees. Full-time employees work on average at least 30 hours per week or 130 hours per month. Under employer shared responsibility, large group employers can avoid potential penalties by offering minimal essential coverage to full-time employees and their child dependents under age 26 that: - Covers at least 60 percent of expected costs for an average person or family. - Limits an employee's share of the premium contribution to 9.5 percent of the employee's income. - Is available to at least 95 percent of its full-time employees or five of its full-time employees if that's greater than 95 percent (and also offers that coverage to the employee's child dependents). *Individuals who do not receive coverage through employment or are unemployed pay a penalty; oftentimes, some refer to this as a tax rather than as a penalty. Without this mandate, many individuals would likely put off purchasing health insurance until they need it—that is, at the onset of a serious medical condition, when premium rates are highest (as compared to purchasing health insurance when healthy). This practice would also cause insurance premiums to rise for those who maintain coverage, including the cost of health-care plan premiums to employers *Companies that fail to offer health-care plans are subject to a penalty. These dollar amounts are adjustable for inflation. -Larger penalties for not offering affordable minimal value coverage as opposed to regular coverage
What is a consumer driven health plan?
Managed care plans don't give employees much choice over whom they receive medical care from, but they help control the cost of healthcare Increasingly, companies are adopting a consumer-driven health-care plan (CDHP) approach. This approach refers to the objective of helping companies maintain control over costs while also enabling employees to make wise choices about their health care. CDHPs combine a pretax payment account with a high-deductible health plan. High-deductible health insurance plans (HDHPs) require substantially higher deductibles compared to managed care plans and traditional fee-for-service plans For individual coverage, the minimum annual deductible is $1,300 with a maximum out-of-pocket limit at or below $6,550 in 2017. Oftentimes, CDHPs are referred to as three-tier payment systems. 1. is an account that allows employees to pay for services using pretax dollars. Either the employer or the employee funds the account based on the type of account. you 2. referred to as the coverage gap, is the difference between the amount of money in the individual's pretax account and the health plan's deductible.The amount not covered by the account is the employee's responsibility. sharing 3. an HDHP covers expense amounts above the deductible. insurance picking up everything HDHP-HSA (look up)
What is a managed care plan?
Managed care plans emphasize cost control by limiting an employee's choice of doctors and hospitals. Three common forms of managed care include health maintenance organizations (HMOs), exclusive provider plans (EPOs), preferred provider organizations (PPOs), and point-of-service (POS) plans.
What is a pre-admission certification?
Many insurance plans require preadmission certification of medical necessity for hospitalization. Physicians must receive approval from a registered nurse or medical doctor employed by an insurance company before admitting patients to the hospital on a nonemergency basis—that is, when a patient's life is not in imminent danger. Insurance company doctors and nurses judge whether hospitalization or alternative care is necessary. In addition, they determine the length of stay appropriate for the medical condition. Insurance companies do not have to pay for stays longer than this window
What are Maternity care benefits and how do federal laws apply to them?
Maternity care benefits cover all or a portion of the costs during pregnancy and for a short period after giving birth. Most maternity care benefits apply to physicians' fees, laboratory work Federal law does not require that employers provide maternity care benefits. However, some federal laws do influence how companies design and implement maternity care benefits.
What are the features of mental health and substance abuse plans?
Mental health and substance abuse plans cover the costs of a variety of treatments, including prescription psychiatric drugs (e.g., antidepressant medication), psychological testing, inpatient hospital care, and outpatient care (individual or group therapy). Mental health benefits amounts vary by the type of disorder. Psychiatrists and psychologists rely on the Diagnostic and Statistical Manual of Mental Disorders (DSM- 5) to diagnose mental disorders based on symptoms, and both fee-for-service and managed care plans rely on the DSM-5 to authorize payment of benefits.
What are multiple-tiers?
Multiple tiers specify copayment amounts that an individual will pay for a specific prescription. Usually, multitier prescription drug plans specify three tiers, from least copayment amount to highest copayment amount: generic medication ($10 to $20 per prescription), formulary brand-name medication ($25 to $40 per prescription), and nonformulary brand-name medication ($40 to full price per prescription). The idea behind multiple-tier prescription plans is that employees will choose less-expensive and equally effective alternatives to nonformulary medications. Formulary: A drug formulary is a list of prescription drugs, both generic and brand name, used by practitioners to identify drugs that offer the greatest overall value.
What is the negotiated amount that employers pay insurers to establish and maintain health-care plans?
Premium- the amount of money an individual or business pays for an insurance policy. Once earned, the premium is income for the insurance company.
What are pre-paid group practices? (HMOs)
Prepaid group practices provide medical care for a set amount. Group HMOs typically operate around the clock, with phone coverage for emergencies and emergency room treatment. Prepaid group practices may take one of three specific forms. 1) Staff model HMOs own the medical facilities, and these organizations employ medical and support staff on these premises. These practices compensate physicians on a salary basis. Staff physicians treat only members of their HMO. Occasionally, staff model HMOs establish contracts with specialists to provide services not covered by staff members. If contract physicians charge more than the fee set by the HMO, then they must bill the difference to the patients. 2) Group model HMOs primarily use contracts with established practices of physicians that cover multiple specialties. 3) Network model HMOs contract with two or more independent practices of physicians.
What are Prescription Drug Plans?
Prescription drug plans cover the costs of drugs. These plans apply exclusively to drugs that state or federal laws require to be dispensed by licensed pharmacists. Prescription drugs dispensed to individuals during hospitalization or treatment in long-term care facilities are not covered by prescription drug plans. Insurers specify which prescription drugs are covered, how much they will pay, and the basis for paying for drugs.
What is coinsurance?
Relevant only after the insurance pays the annual deductible the percentage of covered expenses paid by the insured. The insurance company pays the difference between the total covered expenses amount and the coinsurance amount. Most plans stipulate 20 percent coinsurance. Then plan will pay 80
Why might an employer choose a self-funded plan?
Self-funding makes sense when a company's financial burden of covering employee medical expenses is less than the cost to subscribe to an insurance company for coverage. By not paying premiums in advance to an independent insurer, an employer retains these funds for current cash flow
What are the similarities and differences between HMOs and fee-for-service plans?
Similarities out-of-pocket maximums, preexisting condition clauses, preadmission certification, second surgical opinions, and lifetime and yearly limits. Differences HMOs differ from fee-for-service plans in three important ways. 1) HMOs offer prepaid services, while fee-for-service plans operate on a reimbursement basis. 2) HMOs include the use of primary care physicians as a cost-control measure. 3)coinsurance rates are generally lower in HMO plans than in fee-for-service plans.
For both fully-insured and self-insured plans, what is the distinction between single coverage and family coverage?
Single coverage extends benefits only to the covered employee. Family coverage offers benefits to the covered employee and qualified dependents.
What are the types of group coverage plans?
Single-employer arrangement. An employer arranges for group coverage of all employees under one policy. Pooled coverage. An employer pools money with other employers to provide coverage for its employees under one policy. Oftentimes, employers in the same industry with similar workforces use pooled arrangements. Employer contributions are based on a percent of payroll, cents per hour, or dollar amount per worker, per week or per month. Multiple employer trust. This arrangement is made for employers with relatively small workforces. A single master trust holds each employer's contributions, and premiums are paid from the trust. Voluntary employee beneficiary association. This arrangement permits tax-deductible contributions to a trust to fund health-care benefits or other types of employee benefits. The return on investment of contributions is also tax-free. Multiemployer (Taft-Hartley) Plans. Multiple employers sponsor pension and welfare plans (health care); these plans are usually cosponsored by small companies within certain industries such as construction.
What is a flexible spending account?
The IRS established flexible spending accounts because employers were increasing the annual deductibles amounts and coinsurance rates in response to higher health plan premiums. These increases were proving to be particularly burdensome to employees. Flexible spending accounts (FSAs) permit employees to pay for specified health-care costs that are not covered by an employer's insurance plan. Prior to each plan year, employees elect the amount of pay they wish to allocate to this kind of plan. Employers then use these moneys to reimburse employees for expenses incurred during the plan year that qualify for repayment. Qualifying expenses include an individual's out-of-pocket costs for medical treatments, products, or services related to a mental or physical defect or disease, along with certain associated costs, such as health plan deductibles or transportation to get medical care. However, health, life, and long-term care (e.g., nursing home or in-home assistance) premiums paid for by an employer or through an employee's pretax salary reductions generally do not qualify for reimbursement under a health FSA. A noteworthy drawback of FSAs is the "use it or lose it" provision. FSAs require employees to estimate the amount of money they think they will need for eligible medical expenses in the coming year, but that is often challenging because it is difficult to predict medical needs and to estimate the costs of health care. Employers also bear some risk from offering FSAs to employees. The maximum amount of expenses an employee can contribute to an FSA each year is $2,550 (in 2016), indexed for inflation. Although there is no statutory limit on the amount of reimbursement employees can receive under a medical FSA at a particular time, employers usually set a maximum limit—perhaps $2,000—to protect themselves against major losses under the risk-of-loss rules or uniform coverage requirement. Under this requirement, employers are obligated to make the full amount of benefits and coverage elected under an FSA plan available to employees from the first day the plan becomes effective, regardless of how much money an employee has actually contributed. Great example in book
What is the Medicare Prescription Drug, Improvement and Modernization Act of 2003?
The Medicare Prescription Drug, Improvement and Modernization Act of 2003 added section 223 to the IRC, effective January 1, 2004, to permit eligible individuals to establish health savings accounts (HSAs) for employees who are enrolled in an HDHP to help pay for medical expenses. It is important to note that HSAs are not available for any other type of health-care plan. The sum of an employer's and employee's contribution to an HSA cannot exceed the high-deductible health plan's annual deductible or $3,400 for individualcoverage ($6,750 in the case of family coverage), whichever is less. Employers may require employees to contribute to these limits. An unused balance at the end of the year carries over to the next year and the employee owns the account and its holdings following termination or retirement from the company. Beginning at age 65, HSA holders may use these funds for retirement income
What is underwriting?
The process through which insurance companies determine premiums. Plan providers use mortality tables (indicating yearly probabilities of death based on such factors as age and sex) and morbidity tables (expressing annual probabilities of the occurrence of health problems) as well as experience ratings to determine the terms and premium amount. Experience ratings are issued by actuaries to help insurers set premiums. Experience ratings specify the incidence, type, and financial cost of claims for groups (i.e., everyone as a whole covered under a group plan). like some companies may experience more hospitalizations than others. Group plans usually don't exclude any group member based on health status.
What is Vision Insurance?
Vision insurance plans usually cover eye examinations, lenses, frames, and the fitting of glasses. Similar to dental protection, vision insurance benefits may be delivered through indemnity plans or managed care arrangements. Typically, benefits are limited to eye examinations, basic prescription lenses, and frames once every one to two years. Vision plan benefits are relatively limited because they exclude coverage of specialty prescription eyeglass lenses (e.g., sunglasses, lightweight plastic lenses, and photosensitive lenses), and these plans restrict the coverage amount for frames. These plans generally do not cover any of the costs of contact lenses unless a vision care provider deems their usage a medical necessity
What are carve-out-plans?
a contract agreement entered between an insurance company and another company to provide special services such as prescription drugs or cancer treatment to its members or beneficiaries. Sometimes, carve-out plans are purchased to cover dental care, vision care, or mental and substance abuse services. Usually, specialty HMOs or PPOs manage carve-out plans based on the expectation that single-specialty practices may control costs more effectively than multispecialty organizations. Prescription benefits and mental health benefits are PPACA-defined essential benefits.bloof
What is individual coverage plan in regards to a fully insured health plan?
a person chooses to purchase health-care coverage outside the employment setting for herself and qualified dependents
What are dental service corporations?
are nonprofit organizations that are owned and administered by state dental associations. Like HMOs, dental service corporations offer prepaid benefits and require copayments for services received within the designated network of providers, usually equal to 20 to 30 percent of fees. The basis for reimbursement is either usual, customary, and reasonable fees or a negotiated schedule of fees for specific dental treatments and procedures. It is not uncommon for fees to exceed the amounts that dental service corporations are willing to pay. patients pay the difference, but this excess amount does not count toward annual deductibles.
What is a fully insured health plan?
based on a contractual relationship with one or more insurance companies to provide health-related services for employees and their qualified dependents. Under fully insured arrangements, insurance companies assume the risk for paying medical claims, and insurers take responsibility for administering the plan There is individual coverage and group coverage under this type of plan
What are dental plans?
benefits may cover routine preventative procedures (e.g., cleanings once every six months) and necessary procedures to promote the health of teeth and gums.
What are the 3 types of dental plans?
dental fee-for-service plans, dental service corporation plans, and dental maintenance organization plans. Dental service corporations and dental maintenance organizations represent managed care options. Increasingly, companies are choosing to offer employees managed careoptions because of the anticipated cost savings.
What is a exclusive provider organization (EPO)?
exclusive provider organization (EPO) is a variation of a PPO. EPOs operate similarly to PPOs, but these systems differ. EPOs are more restrictive than PPO plans. EPOs offer reimbursement for services provided within the established network. Exceptions to this rule include medical emergencies or the need for a medical specialty not contained in the provider network. Compared to HMOs, EPOs do not require having a primary care physician.
What are the ways of providing health care coverage?
fee-for-service plans, alternative managed care plans, and any of those plans associated with the consumer-driven approach.term-26
What are Health reimbursement arrangements (HRAs)?
health reimbursement arrangements (HRAs) reimburse employees for health-care expenses. Only the employer is permitted to fund HRAs and there is no allowable maximum contribution limit. As with HSAs, employees can carry over unused balances into subsequent years
What are the 3 types of medical expense benefits provided by healthcare plans?
hospital expense benefits, surgical expense benefits, physician expense benefits.
What does the National Association of Insurance Commissioners (NAIC) do?
looks at state regulations on health benefits nonprofit organization addresses issues concerning the supervision of insurance within each state
What are hospitalization benefits (a type of medical expense benefit)?
medial expense benefits that defray expenses associated with treatment in hospitals Includes inpatient and outpatient benefits Inpatient benefits cover expenses associated with overnight hospital stays. Two categories: room and board (like nursing care and meals), and other related benefits (ex: consultation with PTs, lab tests, pharmaceuticals, X-rays ). outpatient benefits cover expenses for treatments in hospitals not requiring overnight stays. Three types of outpatient benefits include emergency room treatment, preadmission testing, and surgery.
What are physician benefits (a type of medical expense benefit)?
medial expense benefits that defrays the costs of physician fees associated with hospital stays or office visits. In extenuating circumstances, health plans provide coverage for home visits. Extenuating circumstances usually refer to instances when travel to a medical facility would jeopardize a patient's life.
What are surgical benefits (a type of medical expense benefit)?
medial expense benefits that pays for medically necessary surgical procedures, but usually not for elective surgeries such as cosmetic surgery. Generally, health plans pay expenses according to a schedule of usual, customary, and reasonable charges: not more than the physician's usual charge, within the customary range of fees charged in the locality, and reasonable based on the medical circumstances. Whenever actual surgical expenses exceed the usual, customary, and reasonable level, the patient must pay the difference.
What is an out-of-pocket maximum?
most plans specify the maximum amount a policyholder must pay per calendar year or plan year, known as the out-of-pocket maximum provision. The purpose of the out-of-pocket maximum provision is to protect individuals from catastrophic medical expenses or expenses associated with recurring episodes of the same illness.
What is the Mental Health Parity and Addiction Equity Act of 2008?
plays a prominent role in establishing parity requirements for mental health plans offered in conjunction with a group health plan that contains medical and surgical benefits. Mental health and substance abuse plans cannot impose more restrictive limits than the limits provided for in medical plans. The Mental Health Parity and Addiction Equity Act of 2008 requires that any group health plan that includes mental health and substance use disorder benefits along with standard medical and surgical coverage must treat them equally in terms of out-of-pocket costs, benefit limits, and practices such as prior authorization and utilization review
What are preferred provider Organizations (PPOs)?
preferred provider organization (PPO):a select group of health-care providers agrees to furnish health-care services to a given population at a lower level of reimbursement than is the case for fee-for-service plans. Physicians qualify as preferred providers by meeting quality standards, agreeing to follow cost-containment procedures implemented by the PPO, and accepting the PPO's reimbursement structure. In return, the employer, insurance company, or third-party administrator helps guarantee provider physicians minimum patient loads by furnishing employees with financial incentives to use the preferred providers. PPOs provide lower reimbursements for services outside preferred networks. EPOs are types of PPOs
How does the Americans with Disabilities Act of 1990 apply to health benefits?
prohibits illegal discrimination in employment practices on the basis of disability. The U.S. Equal Employment Opportunity Commission (EEOC), the government entity that oversees the administration and enforcement of the ADA, ruled that employers are required to provide the same health-care coverage to employees regardless of disability status BUT the ADA permits employers to make disability-based distinctions in employee benefit plans where the distinctions are based on sound actuarial principles or are related to actual or reasonably anticipated experience
What is second surgical opinion?
reduces unnecessary surgical procedures (and costs) by encouraging an individual to seek an independent opinion from another doctor. Following a recommendation of surgery from a physician, many individuals are inclined to seek an independent opinion to avoid the risks associated with surgery. With second surgical opinion provisions, insurance companies cover the cost of this consultation. Some insurance companies require second surgical opinions before authorizing surgery, while others offer second surgical opinion consultations as an option to each individual
What is the Cadillac tax provision to PPACA?
scheduled to take effect in 2020 Cadillac tax will apply to high-cost employer-sponsored health plans. That is, plans that cost more than $10,200 annually for single coverage and $27,500 for family coverage are subject to the Cadillac tax, and these limits are subject to change from year to year. The tax equals 40 percent of the amount that exceeds those limits. plan for single coverage costs $14,000, the employer would pay 40 percent of $3,800 ($14,000 minus $10,200), or $1,520 for each covered individual (excluding the first 30 employees). The tax was intended to be a disincentive for employers to provide overly rich health benefits, and the cost of the health plan is one way to assess the level of benefits
What are self-funded plans aka self-insured plans?
the employer determines what benefits to offer, pays medical claims for employees and their families, and assumes all of the risk. Employers pay claims directly from their assets, either current cash flow or funds set aside in advance for potential future claims