Massachusetts Health Insurance
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health insurance
Insurance that covers medical illness or injury.
disability (income) insurance
a form of insurance that insures the beneficiary's earned income
against the risk that a disability creates a barrier for a worker to
complete the core functions of their work.
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medical expense insurance
pays benefits for nonsurgical doctors' fees commonly rendered in a
hospital; sometimes pays for home and office calls.
interim coverage
a short-term policy purchased on an interim basis typically when in
between jobs or waiting for a new policy to start.
accidental death and dismemberment
,the purest form of accident insurance. It provides the insured with a
lump-sum benefit amount in the event of accidental death or
dismemberment under accidental circumstances.
nonparticipating plan
insurance under which the insured is not entitled to share in the
divisible surplus of the company.
participating plan
a plan under which the policy owner receives shares (commonly
called dividends) of the divisible surplus of the company.
patient protection and affordable care act
designed to increase health insurance quality and affordability,
lower the uninsured rate by expanding insurance coverage and
reduce the costs of healthcare. introduced mechanisms including
mandates, subsidies and insurance exchanges. the law requires
insurers to accept all applicants, cover a specific list of conditions
and charge the same rates regardless of pre-existing conditions or
sex.
group health insurance
insurance that provides coverage for a group of persons, usually
employees of a company, under one master contract. group health
plans are available to employers, trade and professional
associations, labor unions, credit unions, and other organizations
renewability provisions
define the rights of the insurer to cancel the policy at different
points during the life of the policy. five principal classifications:
cancellable, optionally renewable, conditionally renewable,
guaranteed renewable, and noncancellable.
cancellable policies
allows the insurer to cancel or terminate the policy at any time. this
type of renewability is prohibited in most states.
optionally renewable policies
give the insurer the option to terminate the policy on a date
specified in the contract. if the insurer decides to renew (not cancel)
the policy, they also have the option (and usually choose to)
increase the premiums on the anniversary date.
,conditionally renewable policies
give the insurer the option to terminate the policy only in the event
of one or more conditions stated in the contract. typically, these
conditions are age related. if the insurer decides to renew (not
cancel) the policy, they also have the option (and usually choose to)
increase the premiums on the anniversary date.
guaranteed renewable policies
specify that the policy MUST be renewed (usually until the insured
reaches a specified age). however, the insurer still has the option
(and usually choose to) increase the premiums on the anniversary
date. medicare supplement policies and long-term care policies are
the most common types.
noncancellable policies
state the policy cannot be cancelled nor can its premium rates be
increased under any circumstances. disability policies are the most
common.
nonrenewable policies
are for predetermined terms of a year or less (typically short-term
health insurance) and are considered temporary.
cafeteria plans
benefit arrangements in which employees can pick and choose from
a menu of benefits, thus tailoring the benefits package to their
specific needs. regulated by section 125 of the internal revenue
code.
business continuation plans
provide a way to help a business continue in the event an owner or
key employee dies, or in the event of a disabling sickness or injury.
business overhead expense insurance
a form of disability income coverage designed to pay necessary
business overhead expenses, such as rent, should the insured
business owner become disabled. include such things as rent or
mortgage payments, utilities, telephones, leased equipment,
employees' salaries, and the like. this includes all the expenses that
would continue and must be paid, regardless of the owner's
disability. expense policies do not include any compensation for the
disabled owner
, disability buy-sell plans
agreements between business co-owners that provides that
sharesowned by any one of them who becomes disabled shall be
sold to and purchased by the other co-owners or by the business
using funds from disability income insurance. the buy-out plan
usually contains a provision allowing for a lump-sum payment of the
benefit, thereby facilitating the buyout of the disabled's interest.
the policy is legally binding and proceeds are normally received tax-
free.
key person disability insurance
the protection of a business against financial loss caused by the
death or disablement of a vital member of the company, usually
individuals possessing special managerial or technical skill or
expertise. this type of coverage pays a monthly benefit to a
business to cover expenses for additional help or outside services
when an essential person is disabled. benefits are received by the
business tax-free because the premium paid is not tax deductible.
noncontributory
employee benefit plan under which the employer bears the full cost
of the employees' benefits; in most states, the plan must insure
100% of eligible employees.
contributory
a group insurance plan issued to an employer under which both the
employer and employees contribute to the cost of the plan.
generally, 75% of the eligible employees must be insured in most
states.
coordination of benefits
designed to prevent duplication of group insurance benefits. limits
benefits from multiple group health insurance policies in a
particular case to a % of the expenses covered and designates the
order in which the multiple carriers are to pay benefits.
enrollment period
the limited period of time during which all members may sign up for
a group plan. this period typically happens once a year for a set
number of days.
enrollment card
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