UHC exam

elements of a contract

agreement, consideration, competent parties, legal purpose

acceptance

when an insurers underwriter approves the app and issues a policy

consideration

something of value that each party gives to the other

insurers consideration

promise to pay for losses

insured consideration

payment of premium and statements on the app

parties of a contract

must be capable of entering into a contract in the eyes of the law. be of legal age, mentally competent, and not under drugs or alcohol

to ensure legal purpose of a policy

insurable interest and consent

insurable interest

required at the time of policy issuance

warranty

absolutely true statement upon which the validity of the insurance policy depends

representations

statements believed to be true to the best of ones knowledge, but they are not guaranteed to be true

misrepresentations

untrue statements on the app and could void the contract

material misrepresentation

statement that, if discovered, would alter the underwriting decision of the insurance company

when would a misrepresentation on the insurance app be considered fraud?

if it is intentional and material

conditional contract

requires that certain conditions must be met by the policy owner and the company in order for the contract to. be executed and before each party fulfills its obligations

unilateral contract

only one of the parties to the contract is legally bound to do anything. insured makes no legally binding promises, but an insurer is legally bound to pay losses by a policy in force c

contract of adhesion

is prepared by one of the parties (insurer) and accepted/rejected by the other party (insured).

aleatory

an exchange of unequal amounts or values

notice to the applicant

must be issued to all applicants for health insurance coverage. informs applicant that a credit report will be ordered

it is the agents responsibility to make sure that an application for insurance is ____ and ___ to the best knowledge of the applicant

complete, accurate

signatures

proposed insured, policyowner, and agent

ways to correct an app

start over or draw a line through the incorrect answer and insert correct one

any changes on the app must be ___

initialed by the applicant or insured

a ____ is collected for a health insurance policy and sent to the insurer with the app

initial premium

when a premium did not accompany the app for insurance, upon delivery, the agent must collect the premium and obtain a _____ from the applicant before releasing the policy

statement of good health

attending physician report (APS)

to be sent to applicants dr if necessary. best source for accurate info on the apps medical history

medical exam report

when required, are conducted by a physician or paramedics at insurance companies expense. not usually required but more common with life insurance

medical info and consumer reports

policies with higher amounts of coverage/app raising questions concerning health, underwriter may require thispa

MIB Group

membership corp owned by member insurance companies. non profit. collects, maintains, and makes avilable

insurers cannot refuse coverage solely on the bases of adverse info on an ___

MIB report

fair credit reporting act

establishes procedures that consumer-reporting agencies must follow in order to ensure that records are confidential, accurate, relevant, and properly used

consumer reports

include written and/or oral info regarding a consumers credit, character, reputation, or habits collected by a reporting agency from employment records, credit records, and more

investigative consumer reports

provide info on the consumers character, reputation and habits. cannot be made unless consumer is advised in writing about the report within 3 days of the date the report was requested

insurance applicants must be notified ____ whenever insurers request investigative consumer reports

in writing

HIPPA

protected info includes all “individually identifiable health info”

Protected health info

protected info includes all “individually identifiable health info” held or transmitted by a covered entity or its business associate in any form or media, whether electronic, paper, or oral

once the delivery of a policy is made….

the free-look period begins

if a policy is issued with any changed or amendments ….

the agent is required to explain these changes and obtain the insured signature acknowledging receipt of these amendments

there cannot be any ___ between the existing coverage and replacement coverage

coverage gap

pre-existing condition

a medical condition for which the insured sought medical advice or treatment within a specific period of time prior to the policy issue conditions covered under the current policy may not be covered under the new policy due to pre existing conditions

accidental bodily injury

an unforeseen and unintended injury that resulted from an accident rather than a sickness

cafeteria plan

type of employee benefit plan that allows insureds to choose between different types of benefits

cancellation

termination of an in-force insurance policy, by either the insured or the insurer, prior to the expiration date shown in the policy

comprehensive coverage

health insurance that provides coverage for most types of medical expensesde

deductible

a specified dollar amount that the insured must pay first before the insurance company will pay the policy benefits

nonrenewal

termination of an insurance policy at its expiration date by not offering a continuation of the existing policy or a replacement policy

riders

added to the basic insurance policy to add, modify or delete policy provisions

sickness

an illness, which first manifests itself while the policy is in force

underwriting

risk selection and classification process

Medical Expense Insurance

Basic hospital, surgical and medical policies, and major medical policies

three basic coverages

hospital, surgical, medical

the 3 basic coverages may be purchased:

separately or together as a package

first dollar coverage

3 basic coverages, because they usually do not require the insured to pay a deductible

major medical expense insurance

functions through reimbursement. The insurance company reimburses the medical service provider for any amount due.

basic hospital expense coverage

cover hospital room and board, and miscellaneous hospital expenses, such as lab and x-ray charges, medicines, use of operating room and supplies, while the insured is confined in a hospital.

there is no. deductible and the limits on ___ are set at a specified dollar amount per day up to a maximum number of days.

room and board

if the hospital expense benefit was $500 per day, and the hospital actually charged $650 per day, the insured would be responsible for the additional ____

$150

there are _____ for basic hospital expense coverage

no deductibles

miscellaneous hospital expenses

normally have a separate limit. This amount, which pays for other miscellaneous expenses associated with a hospital stay, can be expressed either as a multiple of the room and board charge (such as 10 times the room and board charge) or as a flat amount. In addition, the policy may specify a maximum limit for certain types of expenses, such as $100 for drugs or $150 for use of the operating room.

basic medical expense coverage

provides coverage for nonsurgical services a physician provides. However, the benefits are usually limited to visits to patients confined in the hospital. Some policies will also pay for office visits. There is no deductible with benefits, but coverage is usually limited to a specific number of visits per day, a limit per visit, or a limit per hospital stay.

basic surgical expense coverage

commonly written in conjunction with Hospital Expense policies. These policies pay for the costs of surgeons’ services, whether the surgery is performed in or out of the hospital. Coverage includes surgeons’ and anesthesiologist's fees, and the operating room when it is not covered as a miscellaneous medical item. As with the other types of basic medical expense coverage, there is no deductible, but coverage is limited.

surgical schedule

lists the types of operations covered and their assigned dollar amounts. If the operation is not listed, the contract may pay for a comparable operation.

relative value

each surgical procedure will be assigned a number of points that are relative to the number of points assigned to the maximum benefit. The maximum points are usually assigned to major surgical procedures, such as open-heart surgery. The points for this maximum benefit are usually high, such as 1,000 points.

supplementary major medical policies

used to supplement the coverage payable under a basic medical expense policy. After the basic policy pays, the supplemental major medical will provide coverage for expenses that were not covered by the basic policy, and expenses that exceed the maximum. If the time limitation is used up in the basic policy, the supplemental coverage will provide coverage thereafter.

corridor deductible

it is applied between the basic coverage and the major medical coverage.

Health maintenance organizations (HMOS)

act forced employers with more than 25 employees to offer the HMO as an alternative to their regular health plans.

the main goal oof HMO

reduce the cost of health care by. utilizing preventative care

HMO provides benefits in the form of ___ rather than in the form of reimbursement for the services of the physician or hospital

services

The HMO offers services to those living within ____

specific geographic boundaries

The HMO tries to limit costs by only providing care from

physicians that meet their standards and are willing to provide care at a prenegotiated price.

copayment

a specific part of the cost of care or a flat dollar amount that must be paid by the member.

HMOs operate on a capitated basis:

the HMO receives a flat amount each month attributed to each member, whether the member sees a physician or not. In essence, it is a prepaid medical plan. Plan members receive all of the services necessary from the member physicians and hospitals.

When an individual becomes a member of the HMO, they will choose their:

primary care physician

in HMO, for a member to see a specialist the PCP must:

refer the member

does HMO provide members with inpatient hospital care, in or out of the service area?

Yes

in HMO Emergency care must be provided for the member:

in or out of the service area

The Preferred Provider Organizations (PPOs) system

the physicians are paid fees for their services rather than a salary, but the member is encouraged to visit approved member physicians that have previously agreed upon the fees to be charged.

what is a PPO?

a group of physicians and hospitals that contract with employers, insurers, or third-party organizations to provide medical care services at a reduced fee.

Unlike HMOs, ___ allow more flexibility between in-network and out-network providers, in exchange for a higher premium.

PPO’s

Point of Service (POS) plan

merely a combination of HMO and PPO plans.

within the ___ Plan the employees do not have to be locked into one plan or make a choice between the two plans. A different choice can be made every time a need arises for medical services.

POS

does PPO have to select a primary care physician?

no

In-network provider =

lower out of pocket costs

out-of-network provider =

higher out of pocket costs

Indemnity Plan Features

provides a set amount of money per service, helping cover out-of-pocket costs.

flexible spending account (FSA)

a form of cafeteria plan benefit funded by salary reduction and employer contributions. The employees are allowed to deposit a certain amount of their paycheck into an account before paying income taxes. Then, during the year, the employee can be directly reimbursed from this account for eligible health care and dependent care expenses

2 types of Flexible Spending Accounts:

health care account and dependent care account

____ may be used to pay medical and dental expenses for employees and their dependents.

FSA’s

Child and dependent care expenses must be for the care of one or more qualifying persons:

• A dependent who is under age 13 when the care is provided and who can be claimed as an exemption on the employee's Federal Income Tax return;

• A spouse who is physically or mentally not able to care for themselves; or

• A dependent who is physically or mentally not able to care for themselves and who can be claimed as an exemption (as long as the person is earning gross income less than an IRS-specified amount).

The insured may change benefits during open enrollment. After that period, generally, no other changes can be made during the plan year. However, the insured might be able to make a change under one of the following circumstances, referred to as qualified life event changes:

1. Marital status;

2. Number of dependents;

3. One of dependents becomes eligible for or no longer satisfies the coverage requirements under the Medical Reimbursement plan for unmarried dependents due to attained age, student status, or any similar circumstances;

4. The insured, the insured's spouse's or qualified dependent's employment status that affects eligibility under the plan (at least a 31-day break in employment status to qualify as a change in status);

5. Change in dependent care provider; or

6. Family medical leave.

High deductible health plans

features higher annual deductibles and out-of-pocket limits than traditional health plans, which means lower premiums. Except for preventive care, the annual deductible must be met before the plan will pay benefits.

High-deductible health plans (HDHPs) are often used in coordination with

Medical Savings Accounts (MSAs), Health Savings Accounts (HSAs), or Health Reimbursement Accounts (HRAs).

To be eligible for a Health Savings Account, an individual must meet the following requirements:

• Be covered by a high-deductible health plan (HDHP);

• Not be covered by other health insurance (does not apply to specific injury insurance and accident, disability, dental care, vision care, long-term care);

• Not be eligible for Medicare (be under the age of 65); and 

• Not be eligible to be claimed as a dependent on someone else's tax return.

health savings account (HSA)

designed to help individuals save for qualified health expenses that they, their spouse, or their dependents incur

An HSA holder who uses the money for a ___ expenditure ____on it, plus a ____. After age 65, a withdrawal used for a nonhealth purpose will be taxed, but not penalized.

nonhealth, pays tax, 20% penalty

Nonhealth withdrawals before age 65 =

20 % penalty

nonhealth withdrawals after age 65 =

no penalty

health reimbursement accounts (HRAs)

consist of funds set aside by employers to reimburse employees for qualified medical expenses, such as deductibles or coinsurance amountsk

key characteristics of HRAs

• They are contribution healthcare plans, not defined benefit plans;

• Not a taxable employee benefit;

• Employers' contributions are tax deductible;

• Employees can roll over unused balances at the end of the year;

• Employers do not need to advance claims payments to employees or healthcare providers during the early months of the plan year;

• Provided with employer dollars, not employee salary reductions;

• Permit the employer to reduce health plan costs by coupling the HRA with a high-deductible (and usually lower-cost) health plan; and

• Balance the group purchasing power of larger employers and smaller employers.

HRA eligibility

open to employees of companies of all sizes; however, the employer determines the eligibility and contribution limits.

__ allow employees to roll over unused benefits to the following calendar year, in addition to new benefits.

HRAs