California Life & Health Insurance 10 - Other Health Insurance Concepts & Tax Considerations

How are benefits received by the business from a key person disability insurance?

Income Tax Free

In health insurance, when would an excess plan pay benefits?

After primary plan has paid its full promised benefit, the excess plan will pay the balance.

In group medical and dental expense insurance, what percentage of premium paid by the employer is deductible as a business expense?

100%

What type of health insurance is sold to small business owners to reimburse them for the overhead expenses?

BOE - Business Overhead Expense Insurance

What type of health insurance covers partners or corporate officers of a closely held business?

Disability Buy-Sell

How are excess funds in an employee's health savings account (HSA) handled?

The funds can be carried forward to the next year.

What type of disabilities will be covered by occupational coverage?

Disabilities that result from accidents or sicknesses that occur on or off the job.

What entity regulates workers compensation benefits?

State Government

What are the four types of workers compensation benefits?

Medical, Income, Rehabilitation, and Death Benefits

Under a fully contributory health plan, how are benefits received by the employee?

Income Tax Free

How long do short-term disability group plans pay benefits?

For a period of less than 2 years.

What is subrogation in health insurance?

The legal process that gives the insurer the right to seek recovery from a third party that was responsible for the loss after the insurer has paid the insured for the loss.

How are individually-owned disability income benefits taxed once received by the insured?

Disability benefits are not taxed; they are received income tax free.

What is a birthday rule in a coordination of benefits provision?

The coverage of the parent whose birthday is earlier in the year is considered primary.

Under what employer-provided plan are the benefits taxable to an employee in proportion to the amount of premium paid by the employer?

Disability Income

According to the Coordination of Benefits provision, if both parents have coverage for a child from their employers' policies, which policy will pay first?

The order of payment will be determined by the birthday rule: the coverage of the parent whose birthday is earlier in the year will be considered primary.

What is the tax advantage of the employer paying premiums for its employees for disability income insurance?

Premiums are deductible as a business expense.

What type of insurance covers an employee who is hurt on the job?

Workers Compensation

How are benefits of group accidental death and dismemberment policy received?

Income Tax Free

What are the five basic characteristics of managed care plans?

1) Controlled Access to Providers
2) Comprehensive Case Management
3) Preventive Care
4) Risk Sharing
5) High Quality Care