6: What type of policy contains a coverage that is only activated upon the insured’s losses reaching a certain level?
A Modified coverage
B Fully funded plan
C Modified fully insured plan
D Partially funded plan
In a partially funded plan, coverage is only activated upon the insured’s losses reaching a certain level. It may take the form of a maximum aggregate limit payable or a maximum limit payable for any one event.
9: To be acceptable to insurance companies, what percentage of eligible employees must be enrolled under a contributory group health insurance plan?
A 65%
B 75%
C 100%
D 50%
State laws establish the minimum number of individuals that constitute a group. Insurers may have a larger number required for certain plans.
14: Which of the following is monitored by ERISA?
A Severance pay of less than 2 years
B Stock profit-sharing plans
C Cash bonus plans
D Cash profit-sharing plans
Cash bonus plans, cash profit-sharing plans, and severance pay of less than two years are considered compensation and are not regulated by ERISA.
15: How many eligible employees must be included in a contributory health insurance plan?
A 90%
B 100%
C 50%
D 75%
At least 50% percent of eligible employees can be included in a contributory health insurance plan. Both the employees and the employer contribute to premium payments.
What is the difference between fully funded, self-funded and partially funded?
Fully funded plans are those that are offered for sale by an insurance carrier, who assumes all of the risks and pays all of the claims.
Self-funded plans are those wherein an employer assumes all insurable risk and pays claims (through a third party administrator). Totally self-insured plans are rare because of the risk of catastrophic claims.
What is common, and becoming more accessible for smaller employers, is partial self-funding. Partial funding uses an insurance carrier to limit the employer’s overall risk as well as limiting the risk on individual catastrophic claims. This is referred to as a stop loss.
Partially self-funded plans give employers control and flexibility that a fully insured plan cannot.
When should a company look into transitioning from fully funded to partially funded?
The general rule used to be after a Company has surpassed 200-250 employees participating in the Company health plan. But this rule has been rapidly changing, with companies as small as 100 employees transitioning to partially funded plans.
Why the change?
The Affordable Care Act. Also, there are newer, extremely competitive partial self-funding options from insurance carriers and third party administrators.
3: Welfare benefits include all of the following EXCEPT
A Day care benefits.
B Health care benefits.
C Workers compensation.
D Holiday pay.
All forms of health care, life insurance, prepaid legal services, and disability insurance (both long- and short-term) are considered "employee welfare benefit" plans. Unfunded benefits or payroll practices, such as vacation, holidays, overtime premiums, holiday gifts, and compensation paid for time not worked are not included.
13: One of the differences between group underwriting and individual underwriting is that there is little or no medical information required regarding plan participants in groups of
A Fewer than 50.
B 50 or more.
C 100 or more.
D 25 or more.
In groups of 50 or mor
6: What type of policy contains a coverage that is only activated upon the insured’s losses reaching a certain level?
A Modified coverage
B Fully funded plan
C Modified fully insured plan
D Partially funded plan
In a partially funded plan, coverage is only activated upon the insured’s losses reaching a certain level. It may take the form of a maximum aggregate limit payable or a maximum limit payable for any one event.
9: To be acceptable to insurance companies, what percentage of eligible employees must be enrolled under a contributory group health insurance plan?
A 65%
B 75%
C 100%
D 50%
State laws establish the minimum number of individuals that constitute a group. Insurers may have a larger number required for certain plans.
14: Which of the following is monitored by ERISA?
A Severance pay of less than 2 years
B Stock profit-sharing plans
C Cash bonus plans
D Cash profit-sharing plans
Cash bonus plans, cash profit-sharing plans, and severance pay of less than two years are considered compensation and are not regulated by ERISA.
15: How many eligible employees must be included in a contributory health insurance plan?
A 90%
B 100%
C 50%
D 75%
At least 50% percent of eligible employees can be included in a contributory health insurance plan. Both the employees and the employer contribute to premium payments.
Fully funded plans are those that are offered for sale by an insurance carrier, who assumes all of the risks and pays all of the claims.
Self-funded plans are those wherein an employer assumes all insurable risk and pays claims (through a third party administrator). Totally self-insured plans are rare because of the risk of catastrophic claims.
What is common, and becoming more accessible for smaller employers, is partial self-funding. Partial funding uses an insurance carrier to limit the employer’s overall risk as well as limiting the risk on individual catastrophic claims. This is referred to as a stop loss.
Partially self-funded plans give employers control and flexibility that a fully insured plan cannot.
When should a company look into transitioning from fully funded to partially funded?
The general rule used to be after a Company has surpassed 200-250 employees participating in the Company health plan. But this rule has been rapidly changing, with companies as small as 100 employees transitioning to partially funded plans.
Why the change?
The Affordable Care Act. Also, there are newer, extremely competitive partial self-funding options from insurance carriers and third party administrators.
3: Welfare benefits include all of the following EXCEPT
A Day care benefits.
B Health care benefits.
C Workers compensation.
D Holiday pay.
All forms of health care, life insurance, prepaid legal services, and disability insurance (both long- and short-term) are considered "employee welfare benefit" plans. Unfunded benefits or payroll practices, such as vacation, holidays, overtime premiums, holiday gifts, and compensation paid for time not worked are not included.
13: One of the differences between group underwriting and individual underwriting is that there is little or no medical information required regarding plan participants in groups ofChapter Recap
This chapter explained the key principles of group health insurance. Let's recap some of the important points:
GROUP INSURANCE
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Characteristics of Group Insurance
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| Types of Eligible Groups |
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| Marketing Consideration |
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| Underwriting |
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| Provisions |
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COBRA
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Qualifying Events
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Length of coverage
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