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48 Cards in this Set
- Front
- Back
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4 types of basic health insurance coverage |
1. Hospitalization -r&b, xrays, labs, tests, general nursing care 2. Surgical expense 3. Physician’s nonsurgical expense - treated in hospital or doctor’s office 4. Major medical - broad coverage for almost all types of medical expenses |
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What’s included in comprehensive major medical policy |
Basic policy and major medical policy. May have a lower initial deductible |
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Ways medical plans control utilization and costs |
1. Deductibles and coinsurance 2. Coronation of benefits to prevent duplicate coverage 3. Require a second opinion before surgery 4. Preadmission certification or permission of insured before hospitalization 5. Case management |
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3 types managed care plans |
HMO PPO POS |
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3 basic type HMO plans |
1. Staff practice: salaried staff and facility owned by HMO 2. Group practice: one location owned by providers but not salaried employees 3. Individual practice: one office, member of plan, receive flat anymore fee paid regardless of use |
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HMO Disadvantages |
1. Limited range of facilities and doctors but some states have “any willing provider” who comply with HMO standards and Accept service prices 2. Primary care physician is gatekeeper to specialists |
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Advantages of HMOs |
1. Broad and deep service 2. Minimal use of deductibles and coinsurance |
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Advantages of PPOs |
1. Lower deductibles and coinsurance 2. Members offer reduced costs to the employer or insurance company in return for volume of business 3. Wider range of providers than HMOs |
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What is a POS plan |
Combination of HMO and PPO. Insured decides if in or out of network care. Out reimbursed to insured with high deductible and coinsurance |
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Ineligibility for HSA’s |
1. Married with coverage under another health plan 2. FSA not limited to only client’s dental and vision expenses |
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Penalties HSA and MSA distributions not used for medical expenses if under age 65, dead or disabled |
Subject to income tax and 20% penalty. After age 65, can be used for retirement or Medicare (but cannot contribute to HSA once Medicare starts) |
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HSA rollover rules |
1. Can rollover FSA and HSA funds into a just say when switching to HSA compatible plan 2. Once during life, rollover funds from IRA into HSA, up to yearly HSA contribution limit 3. HSA beneficiary who is surviving spouse and wants to roll funds into her own HSA account (nonspouse cannot be HSA beneficiary and cannot roll over into HSA, is taxed) |
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Archer medical savings accounts (MSAs) |
Preceded HSA’s and new no longer allowed. Accompanied HDHPs for self employed and Employees of businesses with 50 or fewer employees. Employer contributions deductible by employer, tax-free to employee. Employee contributions tax deductible. Earnings tax free as long as within specified limits. |
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Health reimbursement arrangements (HRAs) - definition and advantages |
Supplement or substitute for medical expense insurance for employees. Reimburses employees for medical expenses as claims are submitted. Advantages: 1. tax-deductible for employer if non-discriminatory plan, tax free reimbursement to employee. 2. Plan can be fully funded by insurance or partially insured or unfunded 3. Employee can roll over the amount from year to year (but unused remains with employer if employee leaves) |
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Sources of Medicare funding |
1.45% of earnings for employees or 2.9% self-employment income 1.45% employer match (deductible to employer) Additional 0.9% tax on earned income above $200,000 for individual and $250,000 for families 3.8% net investment income for single AGI above $200,000 and $250,000 joint |
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Potential impact of distributions from qualified retirement plans or Roth conversions on Medicare taxes |
Increase in AGI 2 years before can increase part B premiums. Do transactions in year prior to client turning 63 to avoid |
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Medicare eligibility |
- Age 65 of qualify for SS or RR - Younger than 65 and receive Social Security disability for24 months minimum - Receive Social Security and renal dialysis or kidney transplant (spouse and dependents too) |
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Taxation of Medicare premiums and benefits |
Part B premiums itemized deduction. Self-employed above-the-line deduction. Part D subsidies excluded from gross income |
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Taxation of health insurance premiums for domestic partners |
If employer pays any part of the premium for the domestic partner, employees tax on that amount. Will likely be more cost efficient than an individual policy if partner does not have health insurance through their own employer. Premiums can be paid with pretax $ |
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Coordination of benefits for husband and wife with insurance for both through their employers |
Husband’s insurance is primary his wife’s is secondary. And vice versa |
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Coordination of benefits for person with 1) plan as active employee and 2) plan as retiree or laid off |
Plan for active employee as primary, plan covering person as retired or laid off secondary |
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Coordination of benefits for person as employee, retiree or dependent or retiree and COBRA |
Non-COBRA plan is primary |
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Coordination of benefits for person with 3 plans: a) dependent of employee, b) retiree coverage from previous employer, c) Medicare |
1. Active employee 2. Medicaid 3. Retiree plan (supplements Medicare) |
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Coverage for dependent children of divorced or separated parents |
If no court decree: 1) Parents married or unmarried but living together, plan of parent whose birthdays earlier in calendar year primary 2) Parents divorced, separated or are not living together, plan for custodial parent as primary, followed by plan for custodial parents spouse, then plan for noncustodial parent, plan for nine custodial parents spouse |
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Taxation of premiums for self-employed without employer option (sole props, partners in partnership, LLC members, greater than 2% S Corp owners) |
Premiums paid by business is taxable income, then deductible as above-the-line deduction on 1040 as long as deduction does not exceed earnings from business. |
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What do employees receive a copy of by the first day of any open enrollment period? |
Summary of benefits and coverage |
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What is the maximum time in eligible employee can be required to wait before group coverage becomes effective? |
90 calendar days, following a maximum 30 day orientation |
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What business size is the ACA employer shared responsibility applicable to? What are the responsibilities? |
Businesses employing at least 50 full-time employees or a combination of full-time and part-time employees. Full-time employee works average of at least 30 hours per week. Employers must offer minimum level of coverage providing at least a minimum level of coverage to 95% or more of full-time employees and their dependents. Or pay a shared responsibility payment per full-time employee. Minimum benefits equals cover at least 60% of total allowed cost benefits for standard population |
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Open enrollment periods for marketPlace and shop |
Marketplace November 1 to December 15 Shop November 15 to December 15 |
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Options when using group insurance through employer |
1) COBRA conversion available 60 days after termination of coverage. No evidence of insurability or pre-existing conditions 2) Get on spouse’s employer coverage 3) I Marketplace within 60 days of loss of coverage from group plan or COBRA |
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4 Qualifying events for continuation coverage under COBRA |
1. Termination of employment except for gross misconduct 2. Reduction and work hours to extend no longer eligible for coverage 3. Loss of coverage by dependent due to employee death, divorce, legal separation or eligibility for Medicare 4. Loss of dependency status by children of employees |
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How long can COBRA coverage last for the 4 qualifying events? |
36 months for all except termination of employment. 18 months, 29 months if termination due to disability |
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How can cobra be used between jobs? What are the exceptions? |
Can elect coverage immediately or retroactively (within 60-day election period). Exceptions are if pre-existing conditions or more than 63 days between coverage or Medicare eligible. |
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Cobra election period |
60 day period Immediately after the later of two dates: 1) date coverage terminates 2) Date the plan administrator notifies a beneficiary of her right to continue coverage |
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Cost of COBRA coverage |
No more than 102% of cost to employer |
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Common cafeteria plans |
FSA, HSA, group term life insurance, 401(k) with employer match, LTC (premiums taxable income to employee) |
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Employer options for FSAs |
Employee carries over $500 YOY or can spend thru March 15 |
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Voluntary Employees’ Beneficiary Associations (VEBA) |
Funding vehicle for employee benefits except retirement, commuting, misc fringe benefits. Employer can deduct firm’s annual contribution and no tax on investment income earned. Membership voluntary. Open to employees and beneficiaries |
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Scheduled dental plan versus non-scheduled |
Scheduled pay benefits from first dollar up to you. Non-scheduled pay reasonable and customary expense and subject to deductibles and coinsurance. |
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Tax penalty for HSA withdrawals not used for qualified expenses |
20% penalty if withdrawals before age 65 (Federal and state income tax still apply though) |
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Consumer directed health care plan |
Combines high deductible insurance policy with an HSA |
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Self-employment tax |
Includes both employee and employer portion of Social Security and Medicare tax |
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Requirements for Social Security fully insured |
Worker turns 40 credits during lifetime. Worker can earn max 4 credits per year |
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Stop-loss insurance for self insured plans and HRAs |
Provides protection against catastrophic or unpredictable assess for employers who are self insuring their healthcare plans for employees insurance company is liable for losses over deductible |
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TRICARE (formlerly CHAMPUS) |
Civilian health benefits for military personnel, retirees and their dependents |
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Coinsurance purpose |
Radius while hazard, malingering |
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Deduction purposes |
Reduced premium costs, eliminate small claims, lower administrative cost |
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Stop loss limit purpose |
Limit insured’s out-of-pocket costs for a given claim |
