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22 Cards in this Set
- Front
- Back
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Types of Health Care Plans |
-Indemnity or fee for service plans (offered less frequently) -Managed care plans (offered most frequently) |
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Indemnity or fee service plans |
-Full choice plans -Employees can go to any qualified physician or hospital and submit claims to the insurance company -The fee is generated when the employee uses health services |
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Managed care plans |
-General term for a medical plan that seeks to ensure that the treatments a person receives are medically necessary and provided in a cost effective manner -Members enroll and pay a set monthly or annual fee |
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Health Maintenance Organization (HMO) |
-Prepaid capitated health care plans structured to emphasize preventative care and cost containment -The physician is paid on a per capita basis rather than for the actual treatment provided -The member must use HMO physicians and facilities in order to take advantage of low copayments and fees |
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2 Types of HMOs |
1. Group model: contract with individual practice associations (IPAs) 2. Staff model:directly employ staff physicians and other health care professionals |
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Preferred provider organization (PPO) |
-Formed by an insurance company, an employer, or a group of employers who negotiate discounted fees with networks of health care providers -Employees guarantee a certain volume of patients -If receive out of network service pay higher copayments/deductibles |
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Point of Service (POS) |
-Combination of a PPO and an HMO -Provides direct access to specialists |
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Exclusive provider ogranizations |
Plans in which participants must use providers in the network of coverage or no payment will be made |
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Physician hospital organization (PHO) |
Consist of hospital and physician practices that merge into vertically integrated structures |
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Other health care options |
-Prescription drug plans: typically require either a per prescription minimum copayment or a percentage with a ceiling amount -Dental plans: preventative, restorative, major restorative, orthodontia -Vision care plans -Alternative health care |
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3 Types of Health Care Funding |
-Fully insured -Self funded -Health alliances or health insurance purchasing cooperatives |
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Fully Insured |
-Employer pays premiums to a 3rd party insurance carrier that bears the risk -Premiums are adjusted yearly to coincide with the group's claim experience |
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Self-funded plan |
-Employer assumes the role of the insurance company and assumes some or all the risk. -Employer purchases stop loss coverage (specific or aggregate) -Two options: 1)Administrative services only - the employer hires only the claims department 2)3rd party administrator: utilize an independent claims department |
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Health Insurance Purchasing Cooperatives |
-Act as purchasing agents for large groups of employers in a region -Shop for the highest quality/lowest prices -Goal is to provide small orgs with the needed economic clout to negotiate more advantageous rates that they cannot get acting independently |
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Ways to control health care costs |
-Change the delivery system -Let employees choose -Redesign the policies -Promote prevention and wellness -Conduct careful reviews -Undertake a utilization review -Consider medical tourism |
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Consumer Directed Health Care |
-The objective is to help employers control costs while allowing employees to make decisions about their healthcare. -HRAs and HSAs |
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Health Reimbursement Account |
-Employer purchases a high-deductible medical plan. -Plan reimburses employees for eligible and substantiated health-care expenses. -Employees may NOT contribute on any pretax basis. -Subject to COBRA continuation. -If self-funded, must meet nondiscrimination requirements and not favor HCEs. -Funds can be rolled over but are NOT portable |
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Health Savings Account |
-Individuals arecovered by a high-deductible health plan. -Employercontributions are deductible; employee contributions are excluded from incomewhen done through a Section 125 plan. -Earnings growtax-free, and distributions for qualified medical expenses are tax-free. -Unused funds can becarried over from year to year, are portable, and can be used into retirement. |
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3 Flexible Benefit Plans under Section 125 |
1. Premium only plans 2. Flexible spending accounts 3. Full cafeteria plans |
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Premium Only Plans (POPs) |
-Allows employee's premium contributions for certain qualified benefits such as health care to be automatically deducted from their salaries before taxes |
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Flexible Spending Accounts |
-Pretaxdollars are set aside to pay for dependent care or unreimbursed expenses. -“Use-it-or-lose-it”option amended to contain a grace period of 2.5 months at the endof the plan year. (up to employer to implement) -Over the counter drug reimbursement requires perscription -Employees entitled to full annual FSA benefit when claims are incurred |
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Full Cafeteria Plans |
-Benefit credits are used to purchase benefits. -Unused credits can be cashed out. -Additional benefits may be bought through pretax salary reductions. |
