Wisconsin Health and Accident Insurance Course

Medical Expense Insurance

Medical Expense Insurance

includes plans that cover hospital care, surgical expenses, doctor visits, and outpatient care, along with most of your other basic medical expenses

Disability Income Insurance

provides replacement income when wages are lost due to a disability
-does not cover medical expenses associated with a disability

Accidental Death and Dismemberment Insurance

provides a beneficiary with a lump sum death benefit in the event of accidental death and will pay a living benefit to for a dismemberment

Renewability Provisions

define the rights of the insurer to cancel the policy at different points during the life of the policy. The more advantages the renewability provisions the more expensive the coverage
There are five principal renewability classifications
-cancellable
-optionally renewable
-conditionally renewable
-guaranteed renewable
-noncancellable.

Premium Factors

-interest
-expenses
-Types of benefits
-Morbidity
-Age
-Sex
-occupation

Business Overhead Expense Insurance

is sold to small business owners who must continue to meet overhead expenses such as rent, utilities and payroll
-reimburses business owners for the actual overhead expenses incurred while the business owner is totally disabled
-does not reimburse business owner for salary

Disability Buyouts

just as the life insurance buy sell agreement, the disability buy out agreement specifies who will purchase a disabled partner's interest and legally obligates that person or party to purchase the business interest of the disabled partner

Eligible Groups

To qualify for a group health insurance, applicants must be a part of a group formed for a reason other than just obtaining health insurance

Contributory

with this plan both the employees and employer pay part of the premiums and 75% of all eligible employees must participate

Noncontributory

the employer pays the entire premium and 100% of the employees must participate

Conversion Privileges

members of a group have the ability to convert their policy to an individual plan

Pre-existing conditions

An individual may be excluded from group coverage for up to a year for any conditions in which the individual sought treatment 6 months prior to the enrollment date

Coordination of Benefits

-avoid duplication of benefit payments and over insurance when an individual is covered under more than one group health plan
-limits the total amount of claims paid from all insurers covering the patient to no more than the total allowable medical expenses.
-it establishes which plan is the primary plan, or the plan that is responsible for providing the full benefit amounts
-in no case will the total amount the insured receives exceed the medical expenses

Maternity Benefits

-any policy of health insurance that provides coverage for maternity care must also cover the services of certified nurse-midwives, and services of licensed birth centers
-the insurance company cannot limit the length of stay for maternity or newborns that are less than medically necessary

Cobra

requires employers with 20 or more employees to extend group coverage to terminated employees and their families for up to 18 months

Franchise Health Plans

Provides health coverage for small groups whose numbers are too small to qualify for true group insurance

Health Savings Accounts

is a tax-favored vehicle for accumulating funds to cover medical expenses
-individuals under age of 65
-annual contributions of up to 100% of an individual's health plan deductible can be made
-catch up contributions can be made by those 55 to 65 years old
-earnings grow tax free and withdrawals for medical expenses are tax free
-non qualified withdrawals are taxed 20%

Tax Treatment of Group Plan

Employers are entitled to take a tax deduction for premium contributions they make to an employee group health plan as long as the contributions represent ordinary and necessary business expense

Health Maintenance Organization HMO

-operate exclusively through group enrollment systems
-each member of the group pays the premium whether or not the person uses services of the HMO
-services are prepaid so preventative care is encouraged
-b/c of preventative care it is expected that all of HMO subscribers will benefit from early detection

Preferred Provider Orgs. PPO

-a group of physicians and hospitals that contract with the employers, insurers, or third party organizations to provide medical care services at a reduced fee
-do not provide care on prepaid basis
-subscribers are not required to use physicians or facilities that have contracts with the PPO

Medicare Part A

helps pay for inpatient hospital care, inpatient care in a skilled nursing facility, home health care and hospice care

Medicare Part B

pays for doctor services and a variety of other medical services and supplies that are not covered by hospital insurance
-most services are needed by people with permanent kidney failure
-optional and offered to everyone who enrolls in part A
-If declined must wait for next general enrollment

Medicare Choice or Advantage Part C

-must be enrolled in medicare part A and B
-medicare provided by an approved health maintenance organization or preferred provider organization

Medicare Part D - Prescriptions

is optional coverage that provides access to private prescription drug plans that contract with Medicare

Medicaid

is a federal and state funded program for those whose income and resources are insufficient to meet the cost of necessary medical care

Any occupation

type of disability that requires the insured to be unable to perform any occupation for which he is reasonably suited by reason of education, training, or experience in order to qualify for disability income benefits

own occupation

-definition of disability that requires that the insured be unable to perform the insured's current occupation as a result of an accident or sickness
-more advantageous
-more expensive and difficult to qualify for
-most group disability insurance provide own occupation clause, for the first 2 ears and then offer any occupation for the remainder

Presumptive Disability

-this provision specifies certain conditions that automatically qualify the insured for the full benefit because the severity of the conditions presumes the insured is totally disabled even if he is able to work
-include total blindness, total deafness, loss of speech, and loss of two or more limbs

Residual Amount Benefit

-is based on the proportion of income actually lost due to the partial disability, taking into account the fact that the insured is able to work and earn some income
-determined by multiplying the percentage of lost income by the state monthly benefit for total disability

Probationary Period

is a waiting period, often 10 to 30 days from the policy issue date during which benefits will not be paid for illness-related disabilities
-applies only to sickness, not accidents or injury disabilities

Elimination Period

is to eliminate coverage for short-term disabilities in which the insured will be able to return to work in a relatively short period of time
-range from 30 days to 180 days

Benefit Period

is the length of time over which the monthly disability benefit payments will last for each disability, after the elimination period has been satisfied
-benefit periods can last 1, 2, 5 years or to age 65 others lifetime
-the longer the benefit the higher the premium

Delayed Disability Provision

-situation in which the individual is not disabled immediately, but as time passes, the person becomes totally disabled
-most policies will still pay benefits if the disability occurs within a specified number of days after the accident or sickness
-30, 60 90 days etc

Recurrent Disability Provision

specifies the period of time, usually within 3-6 months, during which the recurrence of an injury or illness, will be considered as a continuation of a prior period of disability

Social Security Rider

provides for the payment of additional income when the insured is eligible for social insurance benefits but those benefits have not yet begun, have been denied, or have begun in an amount less than the benefit amount of the rider

Cost of Living Adjustment Rider

-help protect against inflation
-the insurance benefit will increase automatically once payments have begun
-adjusted to match the CPI

guaranteed Insurability Rider

allows an insured to increase the benefit level to a specific predetermined amount at certain times or on certain occasions without proof of insurability
-benefit may be increased at age 25, 28, 31,34, 37 and 40 or at marriage or birth of a child

Hospital Expense

-covers 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
-no deductible and the limits on room and board are set at a specified dollar amount per day up to a maximum number of days
-these limits may not provide for the full amount of hospital room and board charges incurred by the insured

Basic Surgical Expense

-pay for the cost of surgeons' services, whether the surgery is performed in or out of the hospital
-includes surgeons' fees, anesthesiologist, and operating room

Deductibles

is a standard dollar amount that the individual insured is required to pay before insurance benefits are paid. THey are used primarily to help control the cost of premiums and reduce overutilization of medical service.

Flat Deductible

a stated dollar amount that applies to a covered loss. This is applied per occurrence, per insured individual

Corridor deductible

is not applied until basic coverage is exhausted

Integrated Deductible

used when a major medical plan is supplementing basic coverages. if the insured has basic coverage it can cover the deductible

Coinsurance

requirement found in major medical policies that require the insured to participate in the payment of some of the expenses
-20% is typically

Stop-Loss

states that after the insured has paid a specific amount towards covered expenses, the insurance company will pay 100% of the remaining expenses for the remainder of the year

Limited Risk Policies

-provides a variety of benefits for a specific disease
-benefits are paid as a scheduled, fixed dollar amount for specific events or medical procedures, such as hospital confinement or chemotherapy

Medigap (Medicare Supplement Policies)

-are policies issued by private insurance companies that are designed to fill in some of the gaps in Medicare
-designed to fill in the gap in coverage attributable to Medicare's deductibles, copayment requirements, and benefits periods
-not administered through federal Social Security programs but instead sold and serviced by private insurers and HMOs

Long Term Care Coverages Home and Community

-is care provided in the insured's home, usually on a part time basis
-it can include skilled care and unskilled care

Long Term Care Coverage Adult Day Care

is designed for those who require assistance with various activities of daily living, while their primary caregivers are absent

Long Term Care Coverage Respite Care

designed to provide a short rest period for a family caregiver

Long Term Care Coverage Continuing Care

designed to provide a benefit for elderly individuals who live in a continuing care retirement community

Taxation of Long Term Care Benefits

-premium payments are deductible as a medical expense, to the extent that when added to all other unreimbursed medical expenses, the total exceeds 7.5% of the taxpayers adjusted gross income
-limit on the amount of premium that can be deducted depending on the age of the insured, the taxpayer, at the end of the year

State Partnerships Programs

-LTC partnerships allow those who have exhausted or at least used some of their private LTC benefits to apply for Medicaid coverage without having to meet the same means-testing requirements
-the partnership between LTC coverage and medicaid works by disregarding some or all assets of applicants for Medicaid who have exhausted private LTC benefits

12 mandatory health provisions

-entire contract
-Time Limit on Certain Defenses
-Grace Period
-Reinstatement
-Notice of Claim
-Claim Forms
-Proof of loss
-Time Payment of Claims
-Payment of CLaims
-Physical Examination and Autopsy
-Legal Actions
-Change in Beneficiary

Entire Contract

-includes actual policy and the application
-it states that nothing outside of the contract can be considered
-assures the policyowner that no changes will be made or will any of the contracts provisions be waived after issue
-any change must be approved by an executive who must be endorsed

Time Limit on Certain Defenses

-the policy is incontestable after it has been in force a certain period of time
-unlike life policies a fraudulent statement on a health insurance app is grounds for contest at any time, unless the policy is guaranteed renewable

Grace Period

-the policy owner is given a number of days after the premium due date during which time the premium may be delayed without penalty
-the amount of money a premium is owed may be taken out of a reimbursement

Reinstatement

-automatic if the delinquent premium is accepted by the company or its authorized agent
-if the insurer takes no action on the app for 45 days the policy is reinstated automatically
-sickness is only covered 10 days after reinstatement date
-accident are covered immediately

Notice of Claim

-insured's obligation to the insurer to notify of loss within a reasonable period of time
-20 days

Claim Forms

-insurer must provided claim form 15 days after notification
-if failed to do so the claimant can submit the claim in any way and the insurer must accept

Proof of loss

-statement and insured must give an insurance company to show that a loss actually occurred
-90 days to submit proof of loss

Time Payment of claims

-immediate pay of claim after insurer receives notification and proof of loss
-must be paid at least monthly if disability income payments

Payment of Claims

specifies how and to whom payments are to be made

Physical Examination and Autopsy

-entitles a company at its own expense, to make physical examinations of the insured at a reasonable intervals during the period of a claim, unless it forbidden by state law

Legal Actions

the insured can not take legal action against the company in a claim dispute until after 60 days from the time the insured submits proof of loss. limited to no more than 5 years.

Change of Beneficiary

the insured may change a beneficiary at any time unless a beneficiary has been named irrevocably

11 optional health provisions

-Change of occupation
-Misstatement of Age
-Conformity with State Statutes
-Other Insurance in this insurer
-Insurance with other insurer
-insurance with other insurers
-Relation of Earnings to insurance
-Unpaid Premiums
-Cancellation
-illegal occupation
-intoxicants and narcotics

change of occupation

-allows insurer to reduce the maximum benefit payable under the policy if the insured switches to a more hazardous occupation or to reduce the premium rate charged if the insured changes to a less hazardous profession

misstatement of age

-allows the insurer to adjust the benefit payable if the age of the insured was misstated when application for the policy was made
-if applicant was older benefits would be reduced accordingly
-if younger benefits would be increased

other insurance with this insurer

-under this provision the total amount of coverage to be underwritten by a company for one person is restricted to a specified maximum amount, regardless of the number of policies issued
-designed to protect insurer

Other insurer or insurers

states that benefits payable for expenses incurred will be prorated in case where the company accepted the risk without being notified of other existing coverage for the same risk

Relation of Earnings to insurance

if disability income benefits from all disability income policies for the same loss exceed the insured's monthly earnings at the time of disability, the relation of earnings provision states that the insurer is liable only for that proportionate amount of benefits as the insured's earnings bear to the total benefits under all such coverage

Unpaid Premiums

unpaid premiums at time of claim will be deducted form the sum

Cancellation

-gives the company the right to cancel the policy at anytime with 45 days written notice
-this notice must also be given when the insurer refuses to renew a policy or change premium rates
-if cancellation is for nonpayment of premium the insurer must give 10 days written notice unless premiums are due monthly or more frequently
-allows the insured to cancel the policy any time after the policy's original term has expired

Illegal Occupation

specifies that the insurer is not liable for losses attributed to the insureds being connected with a felony or participation in any illegal occupation

Intoxicants and narcotics

-not attributed to any loss while intoxicated or under the influence

conformity with state statutes

any policy provision that is in conflict with state statutes in the state where the insured lives at the time the policy is issued is automatically amended to conform with the minimum statutory requirements

morbidity

indicate the average number of people in any given group to become disabled due to accident or sickness

interest

a portion of every premium is invested by insurance companies to earn interest this helps reduce premium payment costs

expense

cover the cost of salaries, commissions, supplies and other administrative cost

Taxation of Disability Income Insurance

-premiums on personal disability income policies are not tax deductible
-benefits are tax free
-if paid by the employer the opposite is true
-if employee contributed the benefit will be tax free to the portion contributed

Taxation of Medical Expense Insurance

premiums paid by the policy owner are tax deductible as a medical expense

Mandatory Second Options

-many health policies today contain a provision requiring the insured to obtain a second opinion before receiving elective surgery
-an insured typically will pay more out of pocket expenses for surgery which only one option was obtained
-can help contain the cost of a group medical plan

Pre-Certification Review

-obtain approval from the insurer before entering a hospital
-determines whether hospitalization is necessary
-in emergency situations, the notification must be given after the patient has entered the hospital
-failure to get a pre-admission certification eliminates the health care provider's obligation to pay for services rendered

Ambulatory Surgery

-permits surgical procedures to be performed on an outpatient basis where once an overnight hospital stay was required

Case Management

-a medical professional within the insurance company evaluates the case and discusses options with the insured
-lets the insurer take an active role in the management of a potentially expensive claim

Unauthorized Entities

The states reasons for concerns with unauthorized entities
-Potential for criminal activity within the insurance business
-Adverse economic impact on authorized insurers
-Potential for unpaid claims due to dishonesty

Notice of Replacement

-when a life agent agent makes a life insurance proposal and knows or should know that the purchase of such a policy will replace an existing life insurance policy, the replacement rule applies
-replacement means any transaction in which new annuity is purchased and, as a result, the existing life insurance or annuities will be replaced

Free Look

-allows an insured a specified number of days from the delivery date of the policy to look over a new policy and return it for a full refund if dissatisfied for any reason

Buyers Guide

-provides basic information about and insurance policy
-this document explains how a buyer should go about choosing the amount and type of insurance to buy, and how a buyer can save money by comparing the cost of similar policies
-must be provided to clients before accepting initial premium

Agent Ethics

Applications may not be submitted without the following:
-The insurance Company's name on the first page
- The agent's license number
-information must be legible and a copy of application must be provided

Group Life Certificates

Issued to policyholders in a group policy, and the certificate must include the following:
-Group Policy Number
-Description of the insurance protection
-Names of the insured, beneficiaries, and dependents
-Rights and conditions