Health and Welfare Benefits Flashcards

An HRA (Health Reimbursement Arrangement) is funded exclusively by:

Answer: Employer contributions only

HRAs are employer-funded accounts used to reimburse employees for qualified medical expenses; employees cannot contribute to an HRA.

What does the term 'adverse selection' mean in the context of health benefit plan design?

Answer: Higher-risk individuals disproportionately enrolling in richer benefit options

Adverse selection occurs when sicker or higher-risk individuals are more likely to enroll in comprehensive plans, driving up costs for those plan options.

Which document must employers provide to employees describing the summary of benefits and coverage under a health plan?

Answer: Summary of Benefits and Coverage (SBC)

The ACA requires insurers and plan administrators to provide an SBC — a standardized, plain-language summary of plan benefits and coverage — to enrollees.

Under the Newborns' and Mothers' Health Protection Act, group health plans must cover hospital stays for normal delivery for at least:

Answer: 48 hours

The Newborns' Act requires group health plans to cover at least a 48-hour hospital stay following a vaginal delivery and 96 hours after a cesarean section.

Which cost-sharing feature requires the insured to pay a fixed percentage of covered medical costs after meeting the deductible?

Answer: Coinsurance

Coinsurance is the percentage of covered medical costs the insured pays after satisfying the plan deductible, with the plan paying the remaining percentage.

What is the COBRA qualifying event when a covered employee becomes entitled to Medicare?

Answer: For the employee's spouse and dependent children only

When an employee becomes entitled to Medicare, it is a COBRA qualifying event only for the spouse and dependent children, not the employee, since the employee now has Medicare.