RHU flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Indemnity principle

Health insurance restores the insured to approximately the same financial position after a loss, paying actual covered expenses rather than a profit, and benefits cannot exceed the loss incurred.

Adverse selection

The tendency for people with higher expected health care costs to buy or keep coverage more often than lower-risk people, which can raise premiums unless controlled by underwriting, mandates, or group pooling.

Coordination of benefits

Rules that determine payment order when a person has two health plans; the primary plan pays first and the secondary plan pays remaining covered expenses up to its limit, preventing duplicate payment.

Guaranteed renewable

A policy renewal provision under which the insurer must continue coverage while premiums are paid but may increase premiums by class; the insurer cannot cancel an individual because of health.

Out-of-pocket maximum

The most a member pays in cost sharing for covered in-network essential benefits in a plan year; after it is reached, the plan generally pays 100% of covered benefits.

Elimination period

The waiting period at the start of a disability during which no benefits are paid; it functions like a deductible measured in time and longer periods reduce premium.

Own-occupation definition

A disability benefit standard that pays when the insured cannot perform the main duties of their own occupation, often for an initial period; it is broader than any-occupation.

Residual disability

A benefit that pays a proportionate amount when the insured returns to work with reduced income because of disability, rather than requiring complete inability to work.

Recurrent disability

A return of the same or related disability within a stated period, often six months, is treated as continuation of the prior claim so a new elimination period is not required.

Waiver of premium

A disability policy provision that suspends premium payments after the insured has been totally disabled for a specified period, keeping the policy in force during disability.

Experience rating

A group health premium method that uses the group's own past claims and utilization to set rates, often used for larger employers, with credibility adjustments for claim volatility.

COBRA continuation

A federal law requiring employers with 20 or more employees to offer continued group health coverage after qualifying events; maximum periods are generally 18, 29, or 36 months.

Section 125 cafeteria plan

An employer plan allowing employees to pay certain benefits, such as health premiums, with pre-tax salary reductions; elections generally can change only after a qualifying life event.

Actively at work

A group eligibility rule requiring an employee to be physically able to perform job duties on the effective date; disabled employees may not enter the plan until they return to work.

Special enrollment period

A HIPAA right to enroll in group health coverage outside open enrollment after events such as marriage, birth, adoption, or loss of other coverage, within stated deadlines.

Capitation

A payment method in which a provider receives a fixed amount per patient per month regardless of services used, shifting financial risk for overutilization to the provider.

DRG prospective payment

A hospital payment system that pays a fixed amount based on the patient's diagnosis-related group rather than itemized charges, encouraging shorter stays and cost control.

Medical loss ratio

The share of premium revenue spent on claims and quality improvement; under the ACA, large group plans must meet 85% and individual/small group plans 80% or rebate.

Prior authorization

A utilization management process requiring the insurer to approve certain services or drugs before they are provided, allowing review of medical necessity and cost.

Risk adjustment

A payment transfer system that moves funds from plans with lower-risk enrollees to plans with higher-risk enrollees, based on diagnoses, to reduce incentives to avoid sick members.

Medicare Part A

Hospital insurance covering inpatient hospital stays, skilled nursing facility care, hospice, and some home health; most people receive it premium-free after 40 quarters of Medicare-covered work.

Medicare Advantage

Part C plans offered by private insurers that provide all Part A and Part B benefits and often extra benefits such as dental or vision, usually through HMO or PPO networks.

Medigap open enrollment

A six-month period starting when a person 65 or older first enrolls in Part B, when insurers must sell standardized Medigap policies without medical underwriting.

Metal tiers

ACA marketplace coverage levels named bronze, silver, gold, and platinum, with actuarial values of about 60%, 70%, 80%, and 90% of covered costs paid by the plan.

Medicaid EPSDT

Early and Periodic Screening, Diagnostic, and Treatment benefit for Medicaid children under 21, covering screening and medically necessary treatment services, including services not otherwise covered.

Worksite voluntary benefits

Payroll-deducted products such as accident, critical illness, and hospital indemnity insurance offered through an employer but usually paid entirely by the employee.

Evidence of insurability

Health or financial information an insurer reviews to approve coverage or a benefit increase, often required for voluntary life or disability amounts above a guaranteed issue limit.

Guaranteed issue amount

The coverage amount an insurer accepts without medical underwriting during enrollment, often a multiple of salary or a fixed dollar limit for voluntary benefits.

Qualifying life event

A change such as marriage, birth, divorce, or loss of other coverage that permits an employee to change benefit elections outside the annual open enrollment period.

ERISA fiduciary duty

A plan fiduciary must act solely in the interest of participants, with prudence and loyalty, follow plan documents, and avoid conflicts of interest when managing a benefit plan.

HIPAA minimum necessary

A privacy rule requiring covered entities to limit uses and disclosures of protected health information to the minimum needed for the purpose, except for treatment or authorized requests.

Twisting

An unfair trade practice in which an agent misrepresents a policy to induce a client to lapse or replace existing coverage, often causing harm to the client.