1
Q
Types of group life insurance benefits
A
- Basic group term life (most common) - provides employees a common level of basic insurance protection
- Group supplemental (optional) life - provides additional insurance beyond basic group term life. Typically employee-pay-all with unisex rates in 5-year age brackets
- Group accidental death and dismemberment - typically offered as a companion to group term life and with the same face amount. 100% of face amount is paid upon death or loss of more than one member (hand, foot, sight of an eye). 50% paid upon loss of one member
- Dependent group life - multipal coverage options usually provided, offering coverage of up to $100k on the spouse and $10k on each child
- Survivor income benefits - provides monthly payment in lieu of lump sum death benefit. Typically a % of monthly earnings, such as 25% for spouse and 15% for child
- Group permanent life - plan types are single-premium group paid-up life, group ordinary life, and group term and paid-up
- Group universal life - consists of term life component and side fund that accumulates w/ interest to provide tax-favored savings and long-term insurance protection
- Group variable universal life - same as GUL except with several investment options (incl equities)
- Group credit life insurance - death benefit equals unpaid consumer debt of insured. Beneficiary is creditor, premium paid by debtor
- Living benefits (list)
2
Q
Typical basic group term life plan designs
A
To minimize adverse selection, none allow individual selection of insured amounts
- Flat dollar plans - such as $10k for all employees
- Multiple of earnings plans - such as 1 or 2x
- Salary bracket plans - salary ranges established, benefits vary by range
- Position plans - benefits vary based on employees position (e.g. hourly vs non-officer mgmt vs officers)
3
Q
Group term life disability provisions
A
Most plans contain one of the following:
- Waiver of premium - coverage continues without premium payment when employee becomes totally disabled
- Total and permanent disability - monthly benefit paid when an insured becomes totally and permanently disabled. On death, original death benefit reduced by any disability payments
- Extended death benefit - pays death benefit if insured’s coverage terminates upon total disability prior to age 60, insured remains disabled, dies within one year
4
Q
Formula for group term life imputed income
A
Employees taxed on value of employer-provided group term life insurance > 50k
Value determined from Table I (rates vary by age)
Monthly imputed income = [Table I rate * (covg amt - 50k) / 1k] - Ee contributions
5
Q
Benefit provisions for group disability income
A
- Definition of disability
- Elimination period (3 or 6 mo LTD, 8 days for STD)
- Benefit period - 2 yr, 5 yr, or to 65 for LTD. For STD, 13 or 26 wk to coord w/ LTD slim
- Benefit amounts - paid monthly for LTD, weekly for STD. Repl % of pre-disability earnings (i.e., 60% for LTD, less STD). Max been amt may limit pmts
- Benefit offsets - reduced by income from other sources, i.e. Soc Sec, retirement been, workers’ comp, part-time work
- Limitations and exclusions - bene for mental/nervous conditions usually limited to first 2 yrs, disabilities resulting from act of war or intentionally self-inflicted injury usually excluded
- Optional benefits
6
Q
3 key dimensions for defining medical benefit plans
A
- Definition of covered services / conditions under which they are covered
- Degree to which individual participates in cost of service
- Degree to which the provider participates in risk
7
Q
Services covered by medical policies
A
- Facility - IP acute, ER, OP fac, psych, AD&D, SNF, HH
- Professional - surgery, OV, home visits, hosp visits, ER visits, preventive
- Diagnostic services
- X-ray and lab
- Rx
- DME
- Ambulance
- Private duty nursing
- Wellness benefits
- Nurse help lines
- Disease management benefits
8
Q
Reasons to have the insured share in cost of plan
A
- Control of utilization (reductions w/ copay, coins, ded)
- Control of costs (lowers premium, may increase affordability. However, tax policy works against this)
- Control of risk to insurer (better represents insurable risk)
9
Q
Provider reimbursement arrangements
A
- Discounts from billed charges
- Fee schedules and maximums
- Hosp per diem reimbursements
- Hospital DRGs, APCs, or global payments
- Bonus pools based on utilization
- Capitation
- Integrated delivery system (insurer employs providers - i.e., staff model HMO)
10
Q
Common medical plan exclusions
A
- Not medically necessary, with some exceptions (preventive)
- Services deemed experimental by accepted authority
- Services related to cosmetic surgery, except reconstruction following accidents or mastectomies
- Other specified services: mental, hearing, vision
- Transplants (though covg sometimes provided w/ inside limit)
- Services for which payment is not otherwise required
- Services required due to act of war
- Services provided as a result of work-related injury (covered by workers’ comp)
- Services provided by, or charges from, provider related to the patient
11
Q
Provisions included in medical plans
A
- Overall exclusions (see list)
- Mandated benefits - vary by state but do not apply to ERISA self-funded plans
- Coordination of benefits - rules to adjudicate when a service is covered under multiple benefit plans
- Subrogation - clause assigning right to recovery from injuring party to carrier that provided/reimbursed services
- Pre-existing conditions
- COBRA continuation
- Conversions
12
Q
Typical definitions of disability for group disability income
A
- LTD - as a result of sickness or accidental injury, Ee is unable to perform some or all of material and substantial duties of an occupation, and has loss of a percentage of pre-disability earnings
a) During first 24 months after elim period, based on own occ, and loss of income % is 20%
b) After first 24 months, occ duties are any occ for which Ee is reasonably suited by education, training and experience, and loss is 40% - STD - Ee is unable to perform all the duties of his/her own occ. Covg typically for only non-occupational accidents / sicknesses to avoid overlap w/ workers comp
13
Q
Methods for reducing benefits for income earned during disability
A
- Proportionate loss formula - reduces the benefit by percentage of lost work earnings due to disability
- 50% offset - reduces benefit by $1 for every $2 of work earnings
- Work incentive benefit - ignores all earnings during an initial period (i.e., 12 months), except benefits are capped so that work earnings plus benefits do not exceed pre-disability earnings. After initial period, either proportionate or offset is used
14
Q
Optional benefits that may be added to group disability contracts
A
For LTD:
1. COLA
2. Survivor benefit - lump sum payable to survivors upon death of insured
3. Expense reimbursement for day care expenses
4. Pension benefit - replace lost contributions to retirement plans
5. Conversion option - insureds who lose coverage can convert to either group or ind disability covg
6. Spousal benefits
7. Catastrophic benefits - additional amts for more serious injuries (i.e. total paralysis)
For STD:
1. 24-hour coverage - both on- and off-job
2. First day hosp coverage - elim period waived if confined to hospital
3. Survivor benefit
15
Q
Criteria for provincial Medicare plans to qualify for federal contributions
A
From the Canada Health Act
1. Comprehensiveness - all medically-required hospital and physician services must be covered
2. Universality - all legal residents of province must be entitled to services on uniform terms and conditions
3. Accessibility - reasonable access by residents to hospital and physician services must not be impeded by charges made to residents
4. Portability - may not impose waiting period in excess of 3 months for new residents, and coverage must be maintained when resident moves or travels within Canada, or is temporarily out of the country
5. Public administration - must be administered on a non-profit basis by a public authority
(Extra-billing and user charges not prohibited, but will result in reductions in federal grants to province)
16
Q
Benefits covered by most Canadian provincial Medicare plans
A
- Hospital services - R and B in public ward, phys services, diagnostics, anesth, nursing, drugs, supplies, therapy
- Physician services - GP, specialist, psych, and others
- Other professionals, such as optometrists, chiropractors, osteopaths, and podiatrists
- Rx drugs for social assistance recipients and over age 65 (most provinces)
- Prostheses and therapeutic equipment
- Other diag services, such as lab and x-rays perf outside hosp
- Dental care - medically-req oral and dental surgery performed in hospital
- Out-of-province coverage - includes expenses incurred in other provinces and outside Canada
17
Q
Concerns about the Canadian Medicare system, from recent reports
A
- Waiting months to see a specialist is common
- Shortages of equipment, specialists, and technicians cause waiting for diagnostic procedures
- Waiting for elective and non-emergency surgery is common, due to lack of OR time and shortage of hosp beds
- ER overcrowded, in part due to unavailability of after-hours clinics
- People who need LTC tend to wait in hospitals due to shortage of beds in LTC facilities
- Technology-intensive services are not available everywhere
- Demand for services exceeds supply, resulting in rationing
- Some essential services (i.e. Rx for chronic illnesses) are not covered by Medicare
18
Q
Categories of expenses commonly covered by private (supplemental) medical plans in Canada
A
- Hospital charges - up to amount needed to upgrade to semi-private or private room
- Rx - represent approximately 2/3 of cost of private med plans. Various designs exist, but generally cover all drugs prescribed by physician
- Health practitioners - subject to inside limits (i.e. one treatment/day and max number of treatments/year)
- Miscellaneous expenses - usually eligible only if prescribed by physician, and include almost any insurable expense not otherwise covered: ambulance, x-rays, prostheses
- Out-of-Canada coverage - most common coverage is for ER for short trips outside Canada
19
Q
Group dental insurance is provided to beneficiaries through
A
- Traditional employers
- Multiple employer trusts
- Unions
- Associations
- Chambers of commerce
20
Q
Organizations that sell dental insurance
A
- Insurance companies
- Dental service corporations (i.e., Delta Dental)
- BC/BS plans
- Dental HMOs
- Dental referral (discount card) plans
- Third party administrators
21
Q
Basic components of dental plan designs
A
- Plans are designed to emphasize preventive care
- Cost containment provisions exist to limit antiselection that results from elective nature of benefits (see list)
- Plans only reimburse for the least expensive form of adequate treatment
- Substantial out-of-pocket costs ensure that participants use care appropriately
- Benefits divided into different classes, with reimbursement varying by class (see list)
22
Q
Classes of dental benefits
A
- Type I (Preventive and diagnostic) - oral exams, x-rays, cleanings, fluoride, sealants
- Type II (basic) - fillings, anesthesia, endodontics, periodontics and extractions (last 3 sometimes Type III)
- Type III (major) - inlays, onlays, crowns, bridges, dentures
- Type IV (orthodontics) - sometimes added to dental plans
23
Q
Dental plan cost containment provisions
A
- Reimbursement limitations - i.e., 100% Type I, 80% Type II, 50% Type III
- Calendar year deductible - typically $50 or less, may be waived for Type I
- Calendar year max - typically $1,000, but ranges $500 to $2,500
- Exclusions include cosmetic, experimental, on-the-job injuries
- Pre-existing condition limitations
- Benefits after insurance ends - covg for work started before termination only continues for 31 days
24
Q
Underwriting and rating parameters for dental
A
- Group size - minimum of 5 usually enforced
- Eligible individuals - active employees and dependents (and COBRA)
- Participation - usually 75% required
- Employer contributions - usually at least 50% required to ensure minimum participation
- Other coverages - packaging w/ other insurance helps avoid antiselection
- Demographics - rates may vary based on gender, age, location, industry, family structure
- Waiting and deferral periods
- Incentive coinsurance - start with low coinsurance for types II and III and raise level each year as individual utilizes preventive services
- Transferred business - if plan is replacement, pay for claims incurred prior year
25
Dental reimbursement models and delivery systems
1. Indemnity - traditional FFS
a) Scheduled indemnity plans
b) UCR (usual, customary and reasonable) plans
2. PPO - generally reimbursed w/ discounted FFS
a) Managed indemnity (passive PPOs)
b) Discounted FFS PPOs
c) Fee schedule PPOs
d) Exclusive provider organization (EPO) plans
e) POS plans
3. Dental HMO - generally pre-paid or capitated
a) Independent Provider Association (IPA) plans
b) Staff model DHMO plans
4. Discount card plans - members receive discounts from preferred providers (this is not insurance)
26
Comparison of dental reimbursement models
Plan Type - Indemnity / PPO / DHMO
Premium - High / Medium / Low
Patient access - Highest / Fair / Limited
Benefit richness - Least / Fair / Highest
Reimbursement - UCR or sched / sched / capitation
Cost management - Least / Fair / Most
Utilization - High / High / Low
Quality assurance - Least / Fair / Highest
Fraud potential - High / Moderate / Low
Provider contracting - No / Yes / Yes
27
Claim administration procedures used by dental plans
1. Predetermination - members submit expensive treatment plans for review before service
2. Least expensive alternative - may limit reimbursement to this amount
3. Coordination of benefits - to avoid paying benefits in excess of charges
4. Dental review - difficult claims reviewed by dental consultant
5. Maximum allowable charge (UCR) - expenses limited based on:
a) Dentist's usual fee for procedure
b) Fee level set by plan admin based on charges in geo area
c) Reasonable fee charged for a service when unusual circ/ complications
28
Reasons for increases in prescription drug costs
1. Prescription drug pipeline - mfg recoup investments
2. Biologics - very expensive (2-500k PPPM) and not easily replicated, so generally no generics
3. Patents - protect drug's original manufacturer from comp for a period of time
4. Direct to consumer advertising - mktg of high-cost drugs has been effective, many requests
5. Faster approval process - FDA has streamlined process, increasing number of high-cost drugs coming into market
6. Brand name advertising - mktg continues after generics become available
7. Aging population - more demand for drug therapies
8. Increase in awareness of and testing for disease - often drug therapies to avoid acute illness
9. Personalized medicine - genetic testing may lead to unnecessary medication use
29
Types of prescription drug benefit coverage
1. Prescription drug cards - generally do not integrate with medical benefits, so only drug claims count towards deductible. Usually admin by PBM or TPA
2. Drug coverage through major medical plan - integrated with medical, both count toward deductible. Other features integrated also.
30
Types of formulary designs
1. Closed - only formulary drugs covered. Must have a process to cover non-formulary drugs for ind patients when med necessary
2. Open - all eligible drugs covered with varied cost sharing
3. Tiered (incentive) - separate formulary tiers established, with copays or coins varying by tier
31
Process for adding drugs to the formulary
1. Pharmacy and Therapeutics Committee monitors for new products and gathers info
2. Determine whether drug is clinically effective, safe, and cost-effective (comp. to existing alternatives). Drug is not added if it fails any criteria.
3. If criteria are met and no ther. interchangeable products, drug is added.
4. If criteria are met and are interchangeable drugs, health plan does cost analysis to determine which to add
5. After decision, health plan must implement changes and educate associates, providers, pharmacists, and customers
32
Factors that determine leverage when negotiating rebates from drug manufacturers
Rebates are payments from mfg in exchange for preferred status of their drugs on formulary
1. Number of lives represented - success requires at least 500k lives over which plan exerts formulary control
2. Control of market share - ability to move market share to preferred products
3. Consistency of behavior - predictability of plan's response to manufacturer's actions
33
Sales and marketing process for group LTC insurance
1. First sale (to plan sponsor) - must educate about value of group LTCI, which includes:
a) Keeping current and competitive benefit portfolio, with no cost to sponsor if voluntary
b) Help attract and retain quality employees
c) Reduce productivity loss through missed / distracted work time
d) Respond to needs and expectations of employees
2. Second sale (enrollment of Ees) - enrollment campaign will discuss the benefits of LTCI, which include:
a) Protecting retirement savings from potentially catastrophic LTC expenses
b) Preserving freedom of choice and independence if LTC services needed
c) Avoiding becoming a burden to family, financially and for caregiving
34
Marketing tools and media used in the group LTCI enrollment campaign
1. Informational articles in company publications
2. Mailings to Ee homes (announcement letter, payroll stuffers, reminder postcards)
3. Lead generator brochures
4. Toll-free number to request more info
5. Website to educate about plan, and if desired, allow rate quotes and enrollment
6. Printed or CD enrollment kit including plan details and application
7. E-mail reminders
8. Videos
35
Types of LTCI plans
These are different approaches for paying benefits
1. Service reimbursement model - pays cost of LTC services, subject to fixed limits varying by TOS ($100/day NH, $50/day ALF care)
2. Service indemnity model - fixed benefit paid for any day or week that formal LTC services are received, regardless of actual charges incurred
3. Disability or cash model - fixed benefit paid for each day insured is eligible for benefits, regardless of whether services are received
36
Plan provisions on LTCI policies
1. Benefit triggers (see list)
2. Elimination/waiting period - must remain disabled and benefit eligible, usually 30, 60, 90 or 100 days
3. Covered services (see list)
4. Alternate plan of care - allows insurer to pay benefits (discretionary) for services not explicitly covered
5. Benefit limits - enrollees select daily benefit max for institutional care, with other benefits tied to max. Lifetime max is admin as pot of dollars: daily amt * 365 days * years of coverage
6. Inflation protection - increases benefit limits as LTC cost increase (see list)
7. Nonforfeiture benefits - sold as optional benefit. Reduced, paid-up benefit if lapse (see list)
8. Spousal riders and discounts - may offer prem discount for married indiv
9. Restoration of benefits - may restore lifetime max if insured recovers before exhausting benefits
10. International coverage - may provide limited benefits for care received abroad
11. Shared lifetime max benefit pools - may allow insured who uses all of benefits to tap into remaining benefits of spouse's policy
12. Policy exclusions - pre-ex cond or diseases, alcohol/drug addiction, treatment covered by other policies or Medicare
37
Benefit triggers for LTCI policies
Insured must satisfy the benefit trigger to become eligible for benefits. For tax-qualified, benefit trigger must be:
1. Inability to perform (without subst. assistance) at least two ADLs (see list)
2. Cognitive impairment requiring subst. supervision to protect health and safety of insured. Behaviors indicating:
a) Wandering and getting lost
b) Combativeness
c) Inability to dress appropriately for weather
d) Poor judgment in emergency situations
38
Definitions of the ADLs allowed by HIPAA
1. Bathing - washing oneself by sponge bath or in tub or shower, incl. getting into or out of shower
2. Continence - ability to maintain control of bowel and bladder function, or when unable, ability to perform assoc personal hygiene (incl. caring for catheter or ostomy bag)
3. Dressing - putting on and taking off all items of clothing and any necessary braces, fasteners, or artificial limbs
4. Eating - feeding oneself from a receptacle (plate, cup, etc.) or by feeding tube or IV
5. Toileting - getting to and from toilet, getting on and off toilet, and performing associated personal hygiene
6. Transferring - moving into or out of a bed, chair, or wheelchair
39
Types of nonforfeiture benefits on LTCI policies
1. Shortened benefit period - minimum standard for tax-qual plans. Benefit amt and frequency as in effect at time of lapse, lifetime max reduced to prem paid - ben paid
2. Reduced paid-up - daily and lifetime max reduced and covg extended for life of insured
3. Extended term - bene max do not change, but only disabilities commencing in limited time period covered
4. Contingent nonforfeiture benefit - often provided to those who lapse due to substantial increase who didn't purchase nonforfeiture benefit. Uses shortened bene period
40
Types of health insurers and MCOs
1. Indemnity - few controls for managing cost
2. Service plans - similar to indemnity, but adds contracting w/ providers
3. Managed indemnity - overlays some MCO features onto indemnity plans (see list)
4. PPOs - contract w/ network of providers, members seeing these providers have lower cost sharing
5. Exclusive provider organizations - similar to PPOs, but IN only
6. POS plans - combine HMO with indemnity-type OON coverage
7. HMOs - provide basic and supplemental health services in manner described by HMO Act (see list)
8. CDHPs - combine high-deductible health plan with some form of individual pretax savings account (HRA or HSA)
9. TPAs - administer benefits for self-funded employer groups, but don't assume risk
10. Consumer operated and oriented plans (CO-OPs) - member-run health insurers created to offer coverage to SG and Ind thru PPACA exchanges
41
Common types of managed care overlays in managed indemnity plans
1. General utilization management (UM) - offering menu of UM activities that can be selected by employers or insurers
2. Large case management - ID catastrophic, notify reinsurers, monitoring treatment, negotiating payments for high-cost cases
3. Specialty UM - focuses on util review for spec services, such as BH
4. Disease management (DM) - focuses on common chronic diseases
5. Rental networks - networks of contracted providers in ind markets
6. Workers' comp UM - addresses std UM and unique aspects involved w/ workers' comp benefits
42
Features that differentiate HMOs from health insurers
1. Licensed under different laws than health insurers
2. Must provide adequate access to providers in service areas
3. Must require "no balance billing" clauses in all provider contracts stronger than those found in non-HMOs
4. Must allow direct access to PCPs and OB-GYNs
5. Must have written policies and procedures for phys credentialing, UM, and quality management
6. Must maintain defined min levels of capital reserves
7. Usually share some risk with physicians
8. Most require members to see PCP for routine svc and to access spec care
9. Most accredited by accrediting org
43
Types of HMOs
1. Open-panel - HMO contracts with private physicians who agree to terms and conditions and meet credentialing criteria
a) IPA model - HMO contracts with IPA. Phys are not employees of HMO or IPA, and continue to see non-HMO patients
b) Direct contract model - HMO contracts directly with ind phys or med grps
2. Closed-panel - most care provided through single med group assoc w HMO or through phys employed by HMO. Closed to private phys
a) Group model - HMO contracts with multi-specialty medical grp practice to provide all services. Phys employed by group practice
b) Staff model - physicians employed by HMO and are paid salary plus bonus or incentives
3. True network model - HMO contracts with more than one large med grp or phys org
4. Mixed model HMOs - most commonly occur when closed-panel HMO adds open panel components
5. Open-access HMOs - member selects PCP and gets most benefits by using HMO system. Can bypass PCP to get IN spec care directly, but with less covg. Only IN
44
Advantages and disadvantages of open-panel HMOs
Advantages
1. More easily marketed and sold due to large panel of private phys
2. Easier for members to find convenient participating phys
3. In IPA models, routine med mgmt may be delegated to IPA
4. Easier and lest costly to set up / maintain
Disadvantages:
1. Because HMO is not providing med care, little ability to manage care
2. Higher premiums
45
Advantages and disadvantages of closed-panel HMOs
Advantages:
1. Ability to more closely manage care
2. Delegation of routine med mgmt to group, reducing admin
3. Convenience of many services in 1 location
Disadvantages:
1. Difficult to market to new members who need to change docs
2. Locations of med offices may not be convenient for all members
3. Only feasible in med-lg cities
4. More complex and costly to set up and maintain
46
Types of integrated health care delivery systems (IDSs)
In IDSs, providers unite to manage health care and contract with plans
1. IPAs
2. Physician practice management companies - purchased phys practices. Most failed because no incentive for productivity
3. Group practice without walls - formed as vehicle for phys to organize without dependence on hosp for svc/support
4. Physician-hospital organizations - entity through which hosp and phys negotiate with payers
5. Mangement services organizations- provides vehicle for negotiating with payers and provides services (billing, admin support) to support phys practices
6. Foundation model - hospital creates not-for-profit foundation which purchases phys practices. Usually done when legal barrier to hosp employing phys directly
7. Prov-sponsored orgs - groups of prov who contract directly with Medicare on at-risk basis for all services. Failed because risk not properly spread, attracted too many bad risks, and usually no UM/DM
8. Hospitals with employed phys - hospital employs PCPs and spec, increasing negotiating leverage
47
Structural requirements of ACOs
PPACA created ACOs for use in Medicare program. Help achieve more integrated and efficient care through local org accountability for qual/cost
1. Those eligible include group practices, networks of ind practices, hospitals, RHCs, and FQHCs
2. Must be legal entity authorized to conduct business in each state in which it operates
3. Must be formed for purposes of:
a) receiving and distrib shared savings
b) repaying losses or other monies owed to CMS
c) establishing, reporting, and ensuring prov compliance with health care qual criteria
4. At least 75% of ACO's board seats must be held by ACO participants
5. Management structure must be similar to nonprofit health plan
6. Participants must have sufficient investment that ACO losses would be sig motivator
48
Key characteristics of patient-centered medical homes
1. Patients have ongoing relationship with personal phys
2. Patients receive care from team of ind led by personal phys
3. Personal phys take responsibility for providing or arranging all care for patient
4. Patient's care is coordinated/integrated across all elements of health care continuum
5. Quality and safety are key, enhanced by evidence-based med
6. Patients have enhanced access to care through open scheduling and expanded hours
7. Payment should appropriately recognize added value provided to patients
49
Types of individual health insurance
1. Major medical
2. Limited benefit medical - not enough svc covered to meet definition of major med (see list)
3. Group conversions
4. Medicare Supplement and Medicare Select
5. Medicare Advantage
6. Disability income
7. Business protection coverage - protects business against impact of employee disability
8. LTC - services for individuals who need assistance performing ADLs / cognitively impaired
9. Dental - not usually sold in ind market
50
Types of limited benefit medical insurance
1. Hospital indemnity - flat amount per day of IP hosp, often day limit and elim period
2. Other scheduled benefits - limited covg for one or more indem-type benefits ($250/ICU day or $20/X ray)
3. Dread disease - coverage for specified list of med conditions (i.e., cancer)
4. Critical illness - lump sum in case of heart attack, stroke, heart surgery, cancer (not skin), or dx of spec cond
51
Methods used by disability income policies to adjust for cost of living
1. Guaranteed insurability - automatically offer increased covg to active insureds at spec intervals
2. Automatic increases - amount increases without action by insured
3. Increased benefit payments over time for those on disability (may be combined with 1 or 2)
52
Major types of business protection coverage
1. Keyperson coverage - protect from disability of key individuals. One to two years to provide time to replace
2. Disability buyout coverage - provides lump sum for totally disabled partner or owner to be bought out by other partners/owners
3. Business overhead expense - pays overhead in event of owner's disability. Generally only short-term
53
Benefits that may be covered by LTC policies
1. Nursing home care - facility that provides skilled, intermediate or custodial care, Medicare-approved or state-licensed
2. Assisted living facility care - state-licensed as ALF
3. Home and community-based care - provided in person's home or community based facility (adult day care center)
4. Hospice - facility or program to serve terminally ill
5. Respite care - relieve informal caregiver
6. Home modifications and equipment - services to allow individual to remain at home (emerg alert systems, wheelchair ramps)
7. Care management - to develop plan of care, ID providers, coordinate care
8. Bed reservation benefit - reimburse for inst care if temporarily transferred to acute IP (up to 21 days/yr)
9. Caregiver training - training and education to license informal caregivers as home health aides
10. Death benefit - percentage of all premiums minus any benefits
11. Cash alternative benefit - may have option of receiving payments for HCBS as cash benefit instead of reimbursement benefit
54
Methods of providing inflation protection on LTC policies
1. Automatic inflation protection - limits increase each year by predefined percent (at least 5%) on compound basis
2. Simple inflation protection - same, but simple interest
3. Periodic increase offers - insured is periodically (3-5 yrs) given opportunity to purchase add'l covg on guaranteed issue basis
GH Core
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