Health Insurance Basics

MET

Multiple Employer Trusts: Provides health insurance benefits to a small business through a series of trusts usually established on the basis of specific industries, such as manufacturing, sales and service, real estate, and others.

MEWAs

Multiple Welfare Arrangement: are created by small employers who join to provide health insurance benefits for their employees, often on a self insured basis

Accident Only

Provides coverage only for death dismemberment, disability or hospital and medical care caused by accidents

Medicaid

Provides medical care for the needy under joint federal state participation. (Ker mills act)

If an employer makes a contribution to an employee's Health Savings Account what is its tax treatment like ?

The contributions is excludable from the employees gross income Employer contributions to an employee's Health Savings Account are treated as employer-provided coverage for medical expenses under an accident or health plan and are excludable from the employee's gross income. Employer contributions are not subject to withholding from wages for income tax or subject to FICA, FUTA or the Railroad Retirement Tax Act.1

Which is NOT a type of HMO model? A) Network Model B) Group Model C) Combined Practice Association Model D) Staff Model

The typical structures are the group, staff, network and individual practice association models.

Cafeteria Plan

Employee Benefits arrangements in which employees can select from a range of benefits

Medicare

Federally sponsored health insurance and medical program for persons age 65 or older; administered under provisions of the social security act.

Which of the following accurately describes the service approach used by Blue Cross and Blue Shield?

- Blue Cross and Blue Shield are not-for-profit health care service organizations. Blue Shield plans provide - prepayment coverage for medical and surgical expenses, while Blue Cross plans provide prepayment coverage for hospital expenses. Both Blue Cross and Blue Shield plans operate under the service approach which does not involve reimbursement for covered expenses but rather a guarantee that covered services will be provided without charge to their subscribers.

Blanket health insurance refers to a type of:

- Group accident Insurance Blanket health insurance refers to a form of group accident insurance that covers accidents only under very specific conditions. Generally, these insurance policies are limited to cover passengers on a common carrier such as an airplane or train, employees at a social function such as a company picnic, members of a school's athletic team, summer camp attendees, and volunteer firefighters while on duty.

An example of a state-administered disability program is A) Medicare. B) Medigap. C) workers' compensation. D) Social Security

- Medicare is an example of a federal insurance program - Medigap or Medicare is a supplement insurance, is a type of insurance policy offered by commercial insurers. - Social Security: Is a federally administered providing retirement and disability benefits - Workers Compensation: Is a state administered exam, usually required by the state

What is true about non-renwals? A) The small employer has paid the premium B) The association membership is terminated by the employer C) Enrollees are outside of an insurer's geographic service area D) The small employer has committed fraud

- The association membership is terminated by the employer, their health plan will not renew - If the enrolly lives outside of an insurer's geographic area of operation, their health plan will not renew - if a small employer commits fraud, their health plan will not renew.

Which of the following are eligible to establish a medical savings account (MSA)? A) Self-employeds and individuals. B) Large employers. C) These plans are no longer available. D) Small employers.

- These plans no longer exist Medical savings accounts were originally established for small employers. They have been replaced by health savings accounts (HSAs), and the last year for opening new MSAs was 2003. However, existing MSAs can still continue.

HRA

A health reimbursement account is an employer-funded account that reimburses employees for qualified medical expenses. A health savings account is a tax-exempt trust or account that pays for qualified medical expenses. A medical savings account is a tax-exempt trust or account in a financial institution in which one saves money to pay for qualified medical expenses. A flexible spending account is a cafeteria plan with three components: health insurance premiums, qualified medical expenses, and dependent care expenses.

All of the following statements are correct about health maintenance organizations (HMOs) EXCEPT: A) federal law requires employers with 5 or more employees to implement an HMO plan for health care coverage. B) routine physicals and diagnostic services are covered expenses. C) HMOs must provide comprehensive health care benefits. D) HMOs stress preventive health care.

An HMO offers health care services to its subscribers and emphasizes preventive health care by providing full benefits for routine physical check-ups, immunizations, and the like. Full hospital and outpatient care for sickness and injury is also provided, although the subscriber is limited to the HMO physicians and hospitals. Federal law requires employers with 25 or more employees that provide health care benefits for their workers to offer enrollment in an HMO as an alternative to traditional forms of insurance.

Blanket insurance

Blanket insurance policies cover groups such as students and volunteers for the specified organization. Group disability pays monthly benefits to replace income. She is not covered under workers' compensation because she is a volunteer, not an employee. Hospital indemnity policies pay a per-diem benefit, such as $100 a day.

Which of the following organizations reimburses its insureds for covered medical expenses? A) Health maintenance organizations. B) Blue Cross/Blue Shield. C) Commercial insurers. D) Preferred provider organizations

Commercial Insurers Health insurance may be written by a number of commercial insurers, including life insurance companies, casualty insurance companies, or monoline companies that specialize in one or more types of medical expense and disability income insurance. Commercial insurance companies function on the reimbursement approach. Policyowners obtain medical treatment from whatever source they feel is most appropriate and, per the terms of their policy, submit their charges to their insurer for reimbursement.

HMO

Health Maintenance Organization: Health care management stressing preventative health care, early diagnosis, and treatment on an outpatient basis. Persons generally enroll voluntarily by paying a fixed fee periodically.

Capital Sum

Is the amount paid for accidental loss of sight or accidental dismemberment

Principle Sum

Is the death benefits

A point-of-service (POS) plan is most like a health maintenance organization (HMO) in which of the following ways?

POS plans and HMOs both use primary care physicians as gatekeepers to provide cost control. Members of an HMO can generally not use health care providers outside the organization. An HMO has employees, while a POS generally contracts with independent providers. HMOs are generally nonprofit while POS plans are for-profit.

POS

Point of Service Plan: is a type of health plan allowing the covered person to choose to receive a service from a participating or a non participating provider, with different levels associated with the use of in plan and out of plan providers

PPO

Preferred Provider Organization: Association of health care providers, such as doctors and hospitals that agree to provide health care to members of a particular group at fees negotiated in advance.

Medical Savings Accounts are designed to:

help employees of small businesses and self-employed individuals pay for unreimbursed health care expenses on a tax-favored basis. Medical Savings Accounts are designed to help employees of small businesses and self-employed individuals pay for unreimbursed health care expenses on a tax-favored basis. MSAs are also designed to cover routine medical expenses; they are not meant to provide catastrophic coverage. Consequently, participation in an MSA is conditioned on being covered by a high-deductible contribution plan.