Health & Welfare Benefit Design Flashcards

Under COBRA, what is the maximum premium an employer may charge a qualified beneficiary for continuation coverage?

Answer: 102% of the applicable cost

COBRA allows employers to charge up to 102% of the cost of coverage (100% premium + 2% administrative fee) to the qualified beneficiary.

An Exclusive Provider Organization (EPO) differs from a PPO in that an EPO:

Answer: Does not cover out-of-network care except emergencies

EPOs restrict coverage to in-network providers (with limited emergency exceptions) but, unlike HMOs, typically do not require PCP referrals.

What is the primary purpose of a wellness program's outcomes-based incentive structure?

Answer: Tie rewards to achieving specific biometric or health outcome targets

Outcomes-based wellness programs link incentive rewards (or penalties) to achieving measurable health targets such as BMI, blood pressure, or tobacco-free status.

Under the ACA's preventive care mandate, which of the following must be covered at no cost-sharing in non-grandfathered plans?

Answer: USPSTF grade A and B preventive services

Non-grandfathered plans must cover USPSTF grade A and B preventive services, ACIP-recommended immunizations, and HRSA guidelines without cost-sharing.

Which funding vehicle allows employees to pay their share of group health insurance premiums on a pre-tax basis?

Answer: Section 125 Cafeteria Plan

A Section 125 cafeteria plan is the IRS vehicle that permits employees to elect to pay group health premiums with pre-tax dollars.

A limited-scope dental FSA that is NOT integrated with major medical coverage is considered HSA-compatible because:

Answer: It covers only dental/vision, not 'significant benefits' under IRS rules

IRS guidance permits a limited-scope dental or vision FSA to coexist with HSA eligibility because such plans provide only 'excepted benefits,' not significant medical coverage.

When evaluating a vendor for a disease management program, which metric BEST measures the program's return on investment?

Answer: Reduction in medical claims costs among participants vs. a control group

Comparing medical claims costs between program participants and a matched control group provides the most rigorous ROI evidence for disease management programs.