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