tailieunhanh - Lecture Employee benefits and retirement planning - Chapter 45: Health insurance

This chapter introduces group health insurance benefits. HMOs and HSAs will be discussed more completely in other chapters. Basic plan design is covered by identifying the core plan types. The section on benefit structure identifies attempts at cost limitation: deductibles, coinsurance, and maximum coverage limits. | What is it? The most widespread employee benefit Tax-free form of employee compensation Two types of plans prepaid postpaid Copyright 2009, The National Underwriter Company Plan Design Three fundamental types of plan design Basic plan inpatient hospital charges in-hospital visits by physicians surgical fees “Supplemental” major medical plan Comprehensive plan Copyright 2009, The National Underwriter Company Benefit Structure Deductibles Initial expense paid by employee—usually $100-$500 Usually computed annually, may have carryover provision Usually “all causes” but may have “per-cause” per family Copyright 2009, The National Underwriter Company Benefit Structure Coinsurance Plan participant responsible for specified percentage, usually 20%, of covered expenses Plans can place upper dollar limit on participant’s share—usually several $1,000 on annual basis Maximum Coverage Limits “lifetime limit” on amount participant has to pay—usually $500,000 to $1 million Copyright 2009, The National Underwriter Company Funding Postpaid-Type Health Plans Commercial health insurance Reimburses employee for expenses for covered medical procedures, often limited to ‘usual, customary, and reasonable’ (UCR) charges for given procedure in given area If 50 or more employees, premiums “experience rated” – insurer keeps track of benefit use and adjusts charges accordingly Copyright 2009, The National Underwriter Company Funding Postpaid-Type Health Plans Premiums reflect Expected benefit payments Administrative expenses Commissions State premium taxes Risk charges Return on insurer’s capital allocated to the contract (profit) Copyright 2009, The National Underwriter Company Funding Postpaid-Type Health Plans Blue Cross / Blue Shield Provides direct payment in full to “participating” hospitals and doctors (., agreed to BC/BS pre-established rates) for medical benefits provided to covered employees Employees using nonparticipating hospitals are paid/reimbursed . | What is it? The most widespread employee benefit Tax-free form of employee compensation Two types of plans prepaid postpaid Copyright 2009, The National Underwriter Company Plan Design Three fundamental types of plan design Basic plan inpatient hospital charges in-hospital visits by physicians surgical fees “Supplemental” major medical plan Comprehensive plan Copyright 2009, The National Underwriter Company Benefit Structure Deductibles Initial expense paid by employee—usually $100-$500 Usually computed annually, may have carryover provision Usually “all causes” but may have “per-cause” per family Copyright 2009, The National Underwriter Company Benefit Structure Coinsurance Plan participant responsible for specified percentage, usually 20%, of covered expenses Plans can place upper dollar limit on participant’s share—usually several $1,000 on annual basis Maximum Coverage Limits “lifetime limit” on amount participant has to pay—usually $500,000 to $1 million Copyright