Health Insurance

A pre-existing condition exclusion denies coverage for loss related to the pre-existing condition if the loss arose within a certain time:

(usually 12 to 24 months) after policy issue.

Group HMO contracts must extend benefits for a subscriber who is totally disabled when the contract is discontinued. Benefits may be continued until the earliest of:

-12 months -the date the subscriber is no longer totally disabled -the date a new carrier provides replacement coverage

As a condition of transacting insurance in Florida, a small employer insurer must offer at least two health benefit plans:

-A basic and a standard health benefit plan. The standard policy is a major medical policy and the basic policy is a more affordable, lower benefit option. -Plans must be offered on a guaranteed issue basis, which means that a policy must be offered to a small employer, regardless of employees' health status, pre-existing conditions, or claims history.

Health maintenance organization (HMO) is a type of health-care delivery system that provides:

-Comprehensive health care for its subscribers in exchange for a prepaid fixed contribution. Subscribers may enroll on an individual or group basis. -HMOs are designed to control health-care costs through the use of managed care and case management. They also emphasize preventive care and cost and quality controls in delivering care.

Under a preferred provider organization (PPO) health plan

-Doctors and health-care providers contracts with a commercial insurer to provide services at an agreed-upon, reduced rate. PPO members are free to receive services from any providers in the PPO's network. They can also visit out-of-network doctors but will be reimbursed at a lower rate for such care. Unlike an HMO, PPO members need not select a primary care physician and are not required to obtain a referral before seeing a specialist.

(Married)The order of benefits for dependent children is as follows when they are covered by two or more health insurance plans:

-The benefits of the plan of the parent whose birthday (month and day) is earlier in the year pays benefits -If both parents have the same birthday, the plan that has covered the parent longer pays benefits before the plan that covers the other parent pays benefits.

(Divorced)The order of benefits for dependent children is as follows when they are covered by two or more health insurance plans:

-The plan of the parent with custody of the child pays benefits first. -The plan of the spouse of the parent with custody of the child pays next. -The plan of the parent who does not have custody of the child pays last.

Florida enacted the Health Maintenance Organization Act to:

-promote alternative methods of delivering health-care services to Florida residents in order to minimize the cost of care; -eliminate legal barriers to organizing, promoting, and expanding the use of HMOs in the state; and -ensure that HMOs deliver high-quality health care

HMOs must file an annual report with the Office within:

-three months after the end of each fiscal year -The report must include a copy of the HMO's financial statement, the number of contracts issued and terminated, and an actuarial certification that the HMO is financially sound.

Written notice of a claim is due to the insurer within:

20 days of the loss, or as soon thereafter as reasonably possible.

When a policyholder is covered by Medicaid, a Medicare supplement policy must suspend benefits and premium at the policyholder's request for up to:

24 months

Individual health insurance policies may not exclude coverage for pre-existing conditions for more than:

24 months following the effective date of coverage.

How long is the entire initial enrollment period (IEP) under Medicare:

7 months

Twisting:

A person cannot make a false or misleading statement or comparison about an insurance policy in order to induce someone to lapse, surrender, terminate, retain, or convert an insurance policy or HMO contract or buy a policy with another insurer

Prepaid Health Clinic:

A prepaid health clinic provides basic health-care services to enrollees on a prepaid per capita or prepaid aggregated fixed-sum basis. It also covers basic services that are required to maintain good health, such as physical exams.

In a Medicare supplement policy, a pre-existing condition:

An insurer can exclude benefits during the first 6 months of coverage for which the insured received treatment or was diagnosed during the six months before the effective date of coverage.

(Optional) Unpaid Premium Provision

Deducts an unpaid premium from the claim payment

(Other) Elimination Period Provision

Each time a loss occurs, sets the time that must pass before benefits begin.

Who determines the length of the waiting period that must pass before a person is eligible for coverage under an employer's group health plan:

Employers and insurers determine the length of the waiting period.

Information disclosure

Enrollees must receive written information about the plan in a summary plan description.

(Mandatory) Proof of Loss Provision

Entitles the insurer to written proof of loss within 90 days of loss.

(Mandatory) Grace Period Provision

Gives the insured more time—7, 10, or 31 days—after a premium is due to pay it and keep a policy from lapsing.

Exhausting assets(reducing assets) to qualify for Medicaid is called:

"spending down"

(Mandatory) Change of Beneficiary Provision

Lets the insured change the beneficiary for a death benefit. (Irrevocable beneficiary must consent.)

(Mandatory) Reinstatement Provision

Lets the insured put a policy back in force after it lapses, usually within 3 years of lapse.

(Mandatory) Physical Examination and Autopsy Provision

Lets the insurer order a physical exam or autopsy of the insured following a claim

the use and investment of health insurance premiums:

Like life insurance premiums, the insurer invests health insurance premiums to earn a return. The insurer's expected investment return is factored into its premium rates.

(Optional) Other Insurance in This Insurer Provision

Limits total coverage from a single insurer when insured has two or more related policies with the same insurer.

(Mandatory) Notice of Claim Provision

Makes the insured notify the insurer of a loss within 20 days, or as soon as possible

(Mandatory) Claims Form Provision

Makes the insurer give the insured claim forms within 15 days of notice of claim.

(Mandatory) Time of Payment of Claims Provision

Makes the insurer pay a claim immediately after proof of loss

A prepaid health clinic must file an annual report with the Office on or before:

March 1 each year (or within three months after the end of its reporting period)

coordination of benefits provision in group health insurance policies:

No insurer is required to reimburse for any benefit or coverages in excess of those specified in the contract.

If a Medicare supplement policy replaces another Medicare supplement policy, the agent or insurer must give the applicant a

Notice Regarding Replacement of Medicare Supplement Coverage.

Medicare Advantage includes a private fee-for-service (PFFS) plan, which provides for:

PFFS pays the Medicare private plan and then determines which additional services it will cover and what share of expenses the Medicare beneficiary will pay for those services.

Providers who become part of a PPO are required to accept the:

PPO's previously negotiated fee as full payment for services.

(Mandatory) Legal Actions Provision

Permits the insured to sue the insurer no earlier than 60 days and no later than 3 years after a loss.

(Mandatory) Entire Contract Provision

Specifies that a policy, riders, and endorsements make up the contract between the insurer and insured.

(Other) Consideration Clause Provision

Specifies what the parties exchange to form the insurance contract

(Other) Renewability Provision

States the insurer's rights to increase premiums or cancel coverage, and the insured's right to renew coverage.

Medigap plans

Supplemental insurance policies provided through private companies to cover costs not reimbursed by Medicare. As well as coinsurance and deductibles

(Mandatory) Payment of Claims Provision

Tells the insurer to whom it must pay a claim.

cost-of-living adjustment (COLA)

The COLA rider adjusts the benefit payments according to changes in the consumer price index (CPI). During times of inflation, the adjustment increases the payments. During times of deflation, payments are reduced.

any occupation

Under the any occ definition, the policy pays benefits if the insured cannot work in any occupation for which he or she has the necessary education, training, or experience. A policy with this definition usually costs less because it is harder for the insured to qualify for benefits. sold to blue collars

staff model HMO:

Under this arrangement, the physicians are employees of the HMO and work full time seeing member patients. In this type of HMO, a primary care physician is assigned as the gatekeeper for patients.

(Optional) Other Insurance with Other Insurers Provision

When more than one insurer covers a loss, allocates each insurer's share of the total benefit due.

Claims procedures and appeals

Written rules specify how claims must be filed and how participants appeal denials of coverage. Appeals processes must be fair and timely.

While traditional major medical policies control costs through deductibles and coinsurance, HMOs control costs by imposing

a small co-payment for each doctor visit or health service

Major medical insurance policies are available as:

a supplement to a basic plan (supplementary major medical) or as a comprehensive stand-alone plan (comprehensive major medical).

Which of the following integrates with a basic medical expense policy to cover costs exceeding the basic policy's coverage?

a supplementary major medical policy

The elimination period in a disability income policy is the period:

after a disability starts during which no benefits are payable. It is also called the waiting period.

Group short-term disability plans:

are non-occupational, which means that benefits are provided only for sickness or injury not occurring on the job.

benefits received from a group managed care plan are:

are not taxable income.

guaranteed renewable

assures the policyowner that the insurer will not cancel the policy, although it may increase premiums. If the insurer increases premiums, it must raise them for all policies in that class issued in the state. -A policy is usually guaranteed renewable only until the insured reaches age 65.

If the plan is contributory:

at least 75 percent of an employer's eligible employees must participate in the plan. (With a contributory plan, the employer must pay at least 10 percent of the group medical insurance premium.)

Unless the insured makes an irrevocable beneficiary designation, the insured retains the right to:

change the beneficiary by giving written notice to the insurer.

Health insurance policy exclusions are:

conditions that are not covered and for which benefits are not payable

own occupation

definition of total disability favors the insured. -Under the own occ definition, the policy pays benefits if the insured cannot work in his or her own occupation due to disability. So, even if the insured can do other work to earn a living, benefits are paid because the insured cannot work in his or her own occupation. A policy with this definition usually costs more because it is easier for the insured to qualify for benefits. Sold to white collars

When used in health insurance policies, the word "physician" or "medical doctor" also includes a:

dentist- when the policy covers surgical procedures that are specified in the coverage or that are provided in a hospital in consultation with a licensed physician and are within the scope of the dentist's license.

With what type of health insurance policies are guaranteed insurability riders typically associated?

disability income and long-term care insurance policies only

The grace period provision allows the policyholder to:

extend coverage beyond the premium due date. Its purpose is not to force the owner to pay the premium on the due date.

A stop-loss feature protects the insured under a major medical expense policy by:

limiting the out-of-pocket dollar amount the insured pays. This amount is usually defined on an annual basis. Once an insured's total deductibles and co-payments equal the stop-loss limit, the policy pays all other covered expenses for that year.

Which type of medical expense coverage pays the benefit directly to the insured:

major medical

Self-employed persons can deduct from taxable income the premiums paid for:

medical, dental, and long-term care insurance that covers them, their spouses, and their dependents.

From an insured's perspective, which of the following is the preferred definition of total disability

own occupation

social insurance supplement (SIS) rider (also known as a Social Security rider)

pays an additional monthly benefit before social insurance program benefits begin. (Social insurance programs include Social Security and workers' compensation.) It is not easy to qualify for Social Security disability benefits. They do not begin until the person has been disabled for at least five months. The SIS rider pays benefits during this qualification and waiting period.

Health insurance policies issued in Florida can exclude coverage for:

pre-existing conditions, alcoholism, drug addiction, mental or emotional disorders, cosmetic surgery, and services for which Medicare pays benefits.

What is the period of time that must pass before benefit payments begin under a newly-issued disability income policy:

probationary period

A credit company often buys credit disability insurance to

protect itself in case the insured debtor becomes disabled and cannot pay off the loan.

COBRA

protects those who are no longer covered by an employer's health insurance plan or its benefits. -The length of time for continued coverage under COBRA is governed by the qualifying event. In this case, the qualifying event is divorce, which requires continuation of coverage for up to 36 months.

optionally renewable

provision gives the insurer the right to cancel the policy on a certain date. It also lets the insurer increase the premium for those in the optionally renewable class. Policies are subject to cancellation or premium increases on their anniversary date.

Health Insurance Portability and Accountability Act (HIPAA)

regulates how entities treat the privacy and security of information about a person's health. -HIPAA also ensures that those who have lost their jobs or want to change health insurance carriers will continue to qualify for medical insurance when they go to another job (called portability). HIPAA applies to group insurance plans that cover at least two people.

Medicaid payments for medical care are always made directly to

service providers.

How long is the entire initial enrollment period (IEP) under Medicare?

seven months

As a general rule, the look-back period can be no more than:

six months before the insured enrolled in the plan.

A health insurance policy can also exclude coverage for services for which:

state or federal workers' compensation, employer's liability, occupational disease, or a motor vehicle no-fault law provides benefits.

Business overhead expense policies protect a business in case

the business owner becomes disabled, providing monthly payments that cover the overhead expenses of the business

flat benefit (For partial disability) is paid only if

the insured has returned to partial employment after a total disability. But while the partial disability benefit pays a percentage of the total disability benefit, the flat benefit simply pays a flat amount (typically 50 percent of the total disability benefit).

per cause deductible:

the insured must pay separate deductibles for each separate illness or each separate accident.

presumption of disability provision

the insured qualifies for the full benefit by suffering a specified loss that is considered total and permanently disabling. Insureds who qualify for these benefits do not need to stay under the care of a physician or give periodic proof of loss to the insurer.

An insurer can stop offering all health insurance coverage in Florida if

the insurer first notifies the Office and every insured individual at least 180 days before the coverage will expire; and the insurer does not renew any of the health insurance policies it issued or delivered in Florida.

Which of the following optional health insurance policy provisions applies specifically to disability income insurance policies

the relation of earnings to insurance provision

Insurers must give group policyholders the option of adding coverage for:

the treatment of alcoholism and substance abuse.

Medicaid can pay benefits to qualifying individuals regardless of:

their age.

partial disability benefit. Also called a recovery benefit,

this reduced benefit is paid to insureds who have been getting benefits for total disability and are returning to work on a partial basis. Partial disability income benefits are a percentage of the full benefit amount.

A waiver of premium rider releases the insured from paying the policy's premium only during a period of:

total disability.

Capitation refers to:

type of payment agreement where the physician is paid per person whether seen or not

The issuer of a Medicare supplement policy that replaces another must:

waive any pre-existing condition periods, waiting periods, elimination periods, and probationary periods in the policy to the extent these periods were satisfied under the original policy

After receiving notice of a claim, the insurer must:

within 15 days provide the claimant with the forms to file proof of loss.

(Optional) Cancellation Provision

Insurer can cancel the policy with 45 days' advance notice, or with 10 days' notice if premium was not paid.

(Optional) Illegal Occupation Provision

Insurer can deny a claim for loss incurred from the insured's illegal activity.

(Optional) Intoxicants and Narcotics Provision

Insurer can deny a claim for loss incurred from the insured's intoxication or illegal use of narcotic drugs.

(Optional) Insurance With Other Insurers Provision

Insurer can prorate its benefit for a loss if another insurer covers the same loss

(Other) Insuring Clause Provision

Insurer promises to pay a benefit if a certain event occurs.

(Other) Benefit Integration Provision

Integrates an insurer's benefits with similar benefits the insured gets from other sources to prevent overinsurance and minimize premiums.

An insurer must cover pre-existing conditions no later than:

12 months after the effective date of coverage (18 months for late enrollees).

Under HIPAA, how many months must a person have of creditable coverage to be given access to an insurance policy

18 months

(Optional) Misstatement of Age or Sex Provision

Adjusts benefits for what the premium would buy at the insured's correct age and sex when age or sex was misstated in application.

(Optional)Conformity with State Statutes Provision

Any non-compliant provisions automatically conform to the minimum requirements of the insured's state.

coordination of benefits (COB) provision

Avoids the duplication of benefits by allowing a plan to reduce its benefits when it is not the insured's primary insurance plan. The COB provision seeks to cover the insured for the losses caused by the injury or illness, while avoiding duplication of benefits and the chance that the insured may profit from the loss.

The Chief Financial Officer serves as head of: - & Oversees 13 divisions several of which are:

Head of the Department of Financial Services. - Oversees 13 divisions, several of which have a role in regulating insurance, including the Division of Insurance Agents and Agency Services, the Division of Insurance Fraud, the Division of Consumer Services, and the Division of Accounting and Auditing, which includes the Bureau of Unclaimed Property.

residual benefit payments for partial disability

If an insured's income loss drops below 20 percent, residual disability benefits normally end. Therefore, the income loss is re-calculated every month to determine whether residual benefits should continue or end.

(Other) Probationary Period Provison

In individual policy, sets the time that must pass between the policy's effective date and the time when losses are covered. In group policy, sets the time that must pass between person's hire date and the time when losses are covered.

(Other) Automatic Increase Option Provision

Increases benefits by a specified amount to keep pace with inflation.

(Other) Beneficiary Benefits Provision

Insured names a beneficiary to receive claims payments that would otherwise be paid to the insured, in case the insured dies before the claim is paid.

(Mandatory) Time Limit on Certain Defenses Provison

Prevents the insurer from voiding a policy after 2 or 3 years from issue due to a misrepresentation.

(Optional) Change of Occupation Provision

Reduces benefits if insured takes a more dangerous occupation. Reduces the premium if the insured takes a less dangerous occupation

(Optional) Relation of Earnings to Insurance provision

Reduces the disability income policy's income benefit amount if it exceeds the insured's wages.

conditionally renewable

guarantees that the policyowner can renew coverage. must meet certain conditions. These conditions must be related to the insured reaching a certain age or losing employment or membership in an association that provides the health coverage. These conditions cannot be associated with the insured's health. With a conditionally renewable policy, the insurer cannot cancel coverage if the insured meets the conditions necessary for renewal. However, the insurer can increase premiums.

When applying for Medicaid, the limits and the types of income and assets counted vary depending on whether the applicant:

has a spouse who requires support

If a person loses group coverage under an HMO contract for any reason, including discontinuance of the group contract, he or she is entitled to:

have an individual contract issued without evidence of insurability, if the individual was covered by the group plan for at least three months before the coverage terminated.

noncancellable

health insurance policy cannot cancel the policy or increase the premium. Noncancellable policies present the greatest risk to the insurer, so this renewal provision is more expensive than others. -Noncancellable provisions are rare in medical expense policies.

A health savings account (HSA) usually requires the insured to make which kind of payment combination?

high deductible, low premium

Payment of Claims to Providers- HMO claims forms must give subscribers the option of having benefits paid directly to:

hospital, physician, dentist, or other provider.

A prepaid limited health service organization (PLHSO) is a person or entity which

in return for a prepayment, provides or arranges access to limited health services for enrollees through an exclusive panel of providers. A PLHSO must be incorporated and may operate on a nonprofit or for profit basis. A PLHSO must also receive a certificate of authority before it can act as a PLHSO

automatic increase option

increases benefits by a specified amount to keep pace with inflation. (This is like the cost of living adjustment rider in disability income and long-term care policies.) Benefits may increase as often as every year.

Guaranteed Renewability:

insurance policy which allows an individual to still be covered at the insureds request as long as he or she pays the premium

Under a fee-for-service major medical policy, the insurer pays the claim to the:

insured

An exclusive provider organization (EPO)

is a provider or group of health-care providers who have entered into a written agreement with an insurer to provide health-care services to subscribers. -An EPO must also file an updated list of exclusive providers with the Agency at least semiannually.

corridor deductible

is applied after the basic plan pays benefits and before the supplementary major med plan pays benefits.

Risk selection:

is the process of classifying risks that insurance underwriters follow to evaluate a proposed insured.

If the plan is noncontributory:

it must cover all eligible employees

Which protects businesses against loss if the owner or other key employee becomes disabled:

key person disability income insurance

return of premium rider

lets the insured get back some of the premium paid if he or she has made no claims against the policy.

Future Increase Option Rider

lets the insured periodically buy more coverage under the policy without providing evidence of insurability. Also called a guaranteed insurability rider, it appeals to those who expect their earnings will increase. Usually an insured must exercise this option to buy more insurance before reaching a specified age, such as 45 or 55.

waiver of premium rider

lets the insured skip premium payments during periods of total disability. Typically, the insured must first pay the premium during the elimination period or for some period—such as six months during disability—before premiums are waived.

cancellable policy

lets the insurer cancel the policy at any time by giving written notice. The insurer must refund any advance premiums paid before canceling the policy. Cancellable policies also allow for premium increases. A type of cancellable, nonrenewable policy is the term health policy. This type of health insurance covers only limited periods, such as six months.