Accident & Health Insurance
Accident & Health Insurance tests medical expense and disability income coverage, cost-sharing, group benefits, Medicare, taxation, and Oklahoma market rules. Questions often ask you to calculate what the insurer pays and what the insured pays, or to distinguish similar time periods and policy types.
Core rules
- Medical plans combine deductibles, coinsurance, copays, and an out-of-pocket maximum. Managed care plans (HMO, PPO, POS) use networks and may require referrals or prior authorization. In-network care usually has lower cost-sharing.
- Disability income uses an elimination period (waiting time before benefits), a benefit period (how long benefits last), and a benefit percentage (often 50–70% of income). Own-occupation pays if the insured cannot perform their own job; any-occupation is stricter. Residual disability pays for partial income loss.
- Group health: COBRA continuation generally applies to employers with 20 or more employees, with 18, 29, or 36 months of coverage depending on the qualifying event. HIPAA limits preexisting-condition exclusions in group plans when the person has creditable coverage; individual major-medical coverage is guaranteed issue under the ACA.
- Medicare: Part A hospital, Part B medical, Part C Medicare Advantage, Part D drugs. Medicaid is a separate needs-based program. Most long-term custodial care is not Medicare-covered.
- Tax: employer-paid premiums are generally deductible to the employer and not taxable to employees. Disability benefits are taxable if the employer paid the premiums; benefits are tax-free if the employee paid with after-tax dollars. Individually paid health premiums are generally not deductible except for self-employed individuals.
Worked example
An in-network bill is $10,000. The deductible is $1,000, coinsurance is 80/20, and the out-of-pocket maximum is $5,000. The insured pays the $1,000 deductible; $9,000 remains. The insurer pays 80% ($7,200), and the insured pays 20% ($1,800). Total insured cost is $2,800, below the $5,000 maximum, so the insurer pays $7,200. If the out-of-pocket maximum were $2,500, the insured would pay only $2,500 and the insurer $7,500.
Traps
Do not confuse the elimination period with the benefit period. Coinsurance is a percentage; a copay is a fixed dollar amount. Medicare generally does not pay for custodial long-term care. COBRA is continuation, not a new health plan. Check whether disability premiums were employer-paid or after-tax before taxing benefits. Oklahoma replacement and claim-practice rules can appear in scenario items.