Texas General Lines — Life, Accident, Health and HMO flashcards

Texas law mandates that all Health Maintenance Organizations (HMOs) establish and maintain a comprehensive quality assurance program to evaluate and improve the quality of healthcare services provided to their members.

• Required for Certificate of Authority.
• Monitors and improves care quality.
• Includes review of services and member outcomes.

Memory trick: To get certified, an HMO must show quality and a good plan.

A payment model where healthcare providers receive a fixed fee per patient (PMPM) regardless of services provided, incentivizing managed care.

• Per member per month (PMPM) basis
• Provider assumes financial risk for care
• Encourages preventive care and efficiency

Memory trick: Capitation: Count the heads, get the cash, no matter the care dash.

Texas HMO members have specific rights to appeal adverse decisions, such as denied referrals or claims, through internal and external review processes.

• Applies to denied services, referrals, claims
• Internal grievance process required first
• External review by TDI possible after internal appeal

Memory trick: Don't get denied, demand your right to appeal, Texas style!

A Primary Care Physician in an HMO plan who manages a member's overall healthcare, including referrals to specialists.

• Required for most specialist visits
• Controls access to higher-cost care
• Aims to coordinate care and reduce unnecessary services

Memory trick: The PCP gatekeeper guards the specialist door for cost control.

Texas law provides mechanisms, such as a guaranty association, to protect HMO members in the event their HMO becomes financially insolvent.

• Covers claims for a limited period
• Aids in continuity of care
• Prevents immediate loss of coverage

Memory trick: When an HMO crumbles, the guaranty fund catches the claims.

HMOs generally do not cover out-of-network care (except emergencies), while PPOs offer out-of-network coverage at a higher cost.

• HMO: network-restricted
• PPO: network flexibility with cost tiers
• PCP gatekeeper common in HMOs, rare in PPOs

Memory trick: HMO: Highway to network, PPO: Paved path to choice, even if it costs mo'.

Standard HMOs typically do not cover non-emergency services received from providers outside their network without a valid referral or authorization.

• Full member responsibility for costs
• Exception for true emergencies
• Distinguishes HMOs from PPOs/POS plans

Memory trick: Stray from the HMO path for non-emergencies? You pay the full toll.

HMOs prioritize preventive care, wellness programs, and early intervention to maintain member health and reduce long-term healthcare costs.

• Core component of managed care
• Reduces need for expensive treatments
• Often includes free or low-cost screenings/vaccinations

Memory trick: HMOs prevent, indemnity pays when you're bent.

Texas law requires HMOs to cover emergency medical services based on the 'prudent layperson' standard, regardless of network status or prior authorization.

• Prudent layperson standard applies
• No prior authorization required
• Covered in-network or out-of-network

Memory trick: In an emergency, Texas says 'Go!' - network doesn't matter, and no pre-auth drama.

Texas HMOs are required to have an established internal grievance process that members must utilize first to dispute denials of coverage, complaints about care, or other issues.

• Mandatory internal process.
• First step for member disputes.
• Must be exhausted before external review.
• HMO must provide timely resolution.

Memory trick: Start with a 'grievance' inside, before you go outside.

An HMO plan that offers members the flexibility to use providers outside the HMO's network, typically for a higher cost.

• Blends HMO and PPO features
• Higher out-of-pocket for out-of-network care
• PCP may still be required for in-network referrals

Memory trick: POS: Pick Outside, Pay More. It's a point of choice, not total freedom.

In an HMO plan, a Primary Care Physician (PCP) acts as a 'gatekeeper,' requiring a referral from the PCP before a member can see a specialist for covered services.

• PCP coordinates all care.
• Referral needed for specialists.
• Ensures managed care and cost control.

Memory trick: The gatekeeper doctor holds the key to the specialist door.

A license issued by a state's insurance department that grants an HMO permission to operate within that state.

• Mandatory for legal operation
• Ensures regulatory compliance
• Issued by state insurance departments

Memory trick: TDI's seal of approval keeps Texas HMOs legit.

Texas HMOs are required by regulation to cover a range of preventive healthcare services, reflecting the HMO model's emphasis on maintaining health and preventing illness.

• Mandated coverage for preventive services.
• Includes immunizations, screenings, routine physicals.
• Aims to reduce overall healthcare costs.
• Consistent with the Affordable Care Act (ACA).

Memory trick: HMOs cover the 'ounce of prevention' services by law.

A mandatory program for Texas HMOs focused on monitoring, evaluating, and improving the quality, appropriateness, and accessibility of healthcare services.

• Monitors access and availability
• Evaluates care appropriateness
• Addresses quality-related grievances
• Distinct from pure cost containment

Memory trick: QA: Quality, Access, Apropos. Not merely about cutting the cost-o.

Capitation is a payment arrangement in which a Health Maintenance Organization (HMO) pays a fixed amount per enrollee per month to a medical provider, regardless of the services utilized by that enrollee.

• Fixed payment per member per month.
• Paid to providers by HMOs.
• Incentivizes preventive care and cost control.
• Transfers financial risk to the provider.

Memory trick: Capitation means a 'cap' on the payment per head.

A Point-of-Service (POS) option in an HMO plan allows members to choose to receive healthcare services from providers outside the HMO's network, typically resulting in higher out-of-pocket costs.

• Combines HMO and PPO features.
• In-network care operates like a traditional HMO (PCP, referrals).
• Out-of-network care allowed with higher cost-sharing.
• Offers more flexibility than a pure HMO.

Memory trick: POS means you can choose 'points' of service, but at a cost.

A copayment is a fixed amount a Health Maintenance Organization (HMO) member pays for a covered healthcare service, typically at the time of service, after which the HMO covers the remaining cost.

• Fixed amount paid by member.
• Paid at time of service.
• HMO covers the rest of the contracted rate.
• Applies to in-network services.

Memory trick: Your small 'co-pay' is all you pay for the doctor's day.

The most an insured will have to pay for covered services in a policy year. Once reached, the insurer pays 100% of subsequent covered costs.

• Caps the insured's total annual financial responsibility
• Includes deductibles, copayments, and coinsurance payments
• Protects against catastrophic medical bills

Memory trick: The 'Max'imum is your 'Safe'ty 'Net' against big bills.

A provision in a health insurance policy that states the percentage of covered medical expenses the insured must pay after the deductible has been met.

• Typically expressed as a ratio (e.g., 80/20).
• Applies after the deductible, up to the out-of-pocket maximum.
• Reduces the insurer's liability for a portion of the costs.

Memory trick: Deductible first, then coinsurance kicks in, up to the max.

A federal law that gives employees and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances.

• Applies to employers with 20 or more employees.
• Coverage typically lasts 18 or 36 months.
• Qualified beneficiaries pay the full premium, plus an administrative fee.
• Triggered by qualifying events like job loss, reduction in hours, divorce, or death of the employee.

Memory trick: Federal laws protect your health coverage rights.

A rider on a life insurance policy that allows the policyowner to receive a portion of the death benefit while still living, under specific circumstances.

• Common triggers: terminal illness, critical illness, chronic illness
• Reduces the death benefit paid to beneficiaries
• Can help cover medical or long-term care expenses

Memory trick: Accelerated benefits are 'Advance' payments for 'Severe' health 'Crises'.

A type of Whole Life insurance where premiums are paid for a specified period (e.g., 10-pay, 20-pay, or paid-up at 65), after which the policy is fully paid-up, but coverage continues for the insured's entire life.

• Premiums are higher than traditional Whole Life for the payment period.
• Policy is fully paid-up after the specified period.
• Death benefit coverage remains in force for life.
• Cash value accumulates rapidly during the payment period.

Memory trick: Limited Pay: Pay Less Time, Cover Forever

The rules governing how death benefits, cash value growth, withdrawals, and loans from life insurance policies are treated for income tax purposes.

• Death benefits are generally income tax-free to beneficiaries.
• Cash value grows tax-deferred.
• Cash value withdrawals are tax-free up to the cost basis (premiums paid).
• Policy loans are generally tax-free, unless the policy lapses with an outstanding loan.

Memory trick: Death is Free, Cash is FIFO, Loans are Loans

A provision in a disability income policy that specifies how a recurring disability, from the same or related cause, within a certain period after recovery will be treated.

• Prevents a new elimination period from being applied.
• Typically applies if the recurrence happens within 3 or 6 months.
• Encourages policyholders to return to work without fear of immediate re-qualification.

Memory trick: Disability clauses cover all the 'what ifs' of being unable to work.

A mandatory provision in health insurance policies stating that the policy document, including the application and any attached riders or endorsements, constitutes the entire agreement between the insurer and the insured.

• Prevents the insurer from making changes without mutual agreement.
• Ensures all relevant terms are in one document.
• Protects the insured from unstated policy conditions.
• Mandated by state law (Uniform Individual Accident and Sickness Policy Provisions Law).

Memory trick: The 'Entire Contract' means everything is in ONE binding book.

A policy provision that specifies certain conditions, causes, or circumstances for which the policy will not provide coverage.

• Limits the scope of coverage
• Common exclusions: war, self-inflicted injuries, elective cosmetic surgery, hazardous occupations/hobbies
• Clearly stated in the policy contract

Memory trick: Exclusions 'Exclude' what the policy 'Won't' cover.

A rider in a health insurance policy that waives the policyowner's obligation to pay premiums if they become totally disabled, ensuring the policy remains in force.

• Applies after a waiting period (e.g., 6 months).
• Premiums are waived for the duration of the disability.
• Policy benefits remain active.
• Often included with disability income or long-term care policies.

Memory trick: Riders add extra features; Waiver of Premium protects your wallet when disabled.

The amount the insured must pay out-of-pocket for covered services before the insurance company begins to pay.

• Applies per policy period (e.g., annually)
• Must be met before coinsurance or benefits kick in
• Higher deductibles typically mean lower premiums

Memory trick: Many plans share costs; the first hurdle is always the 'D'eadline.

A waiting period imposed by a group health insurance plan during which a new employee is not yet eligible for coverage.

• Also known as a probationary period or waiting period
• Common in group insurance to manage adverse selection
• Must comply with ACA rules (generally max 90 days)

Memory trick: Eligibility is the 'Entry' 'Gate' for new employees.

An annuity that offers a guaranteed minimum interest rate (principal protection) and growth potential tied to the performance of a stock market index, but without direct investment in the market.

• Guaranteed minimum interest rate.
• Interest credited based on a formula linked to an equity index.
• Provides principal protection and avoids market losses.
• Offers moderate growth potential compared to fixed annuities.

Memory trick: EIA: Equity-Indexed Advantage for balanced growth and safety.

An optional rider in a Long-Term Care (LTC) insurance policy that automatically increases the daily benefit amount over time to help offset the rising cost of long-term care services due to inflation.

• Increases benefits annually by a set percentage (e.g., 3% or 5%).
• Can be simple or compound interest rate increases.
• Crucial for maintaining purchasing power of benefits over decades.
• Adds to the policy premium.

Memory trick: LTC riders add special powers to your long-term care shield.

An employer-sponsored health plan where the employer directly assumes the financial risk for providing healthcare benefits to its employees, rather than purchasing a fully insured policy.

• Employer pays claims directly.
• Often paired with stop-loss insurance to limit risk.
• Allows greater control over plan design and costs.
• Exempt from state insurance laws (subject to ERISA).

Memory trick: Funding: Fully insured is hands-off, self-funded is hands-on with stop-loss.

A standard health insurance policy provision that allows the insurer to adjust the amount of benefits payable to what the premium paid would have purchased at the insured's correct age or sex.

• Prevents policy from being voided due to minor misrepresentations.
• Protects both the insurer and the insured.
• Applies to accidental or unintentional misstatements.
• Benefits are typically reduced if the correct age is higher than stated.

Memory trick: Uniform provisions standardize the policy's fair play.

A health insurance policy provision that guarantees the insured's right to renew the policy up to a specified age, but allows the insurer to increase premiums for an entire class of policyholders.

• Insurer cannot cancel the policy, except for non-payment of premiums.
• Premiums can be increased, but only if applied to all policyholders in the same class.
• Does not guarantee premium rates.
• Common in long-term care and disability income policies.

Memory trick: Renewability: Non-can is ironclad, Guaranteed is guaranteed but premiums can rise.

The maximum amount of money an insured person must pay for covered medical expenses in a policy year. Once this limit is reached, the insurance company pays 100% of additional covered costs.

• Includes deductibles, copayments, and coinsurance payments.
• Does not include premiums.
• Protects insureds from catastrophic medical bills.
• Higher maximums generally mean lower premiums.

Memory trick: Deductible + Coinsurance = Total, but don't exceed the Out-of-Pocket Cap!

A type of managed care health insurance plan that provides healthcare services through a network of providers, typically requiring a primary care physician (PCP) and referrals for specialists.

• Focus on preventative care.
• Members must select a PCP.
• Limited to in-network providers (except emergencies).
• Services are prepaid via monthly premiums.

Memory trick: HMO: Healthy, Managed, Only-in-network.

Small employer group health plans (usually 2-50 employees) are typically community-rated, meaning premiums are based on the broader population's health risk rather than the specific group's claims history.

• Applies to groups of 2-50 employees (varies by state/law).
• Aims to protect small groups from high costs due to individual claims.
• Contrasts with experience rating, often used for larger groups.

Memory trick: Small Group, Big Protection, Community's Affection.

A feature in a disability income policy that pays a benefit when an insured is partially disabled and suffers a loss of income, even if they can perform some work duties.

• Provides a pro-rata benefit based on income loss
• Does not require total inability to work
• Encourages return to work by not requiring complete cessation of employment

Memory trick: Residual is when you're 'Left' with 'Less' income, but not 'Zero'.

In health insurance, there is an inverse relationship between the deductible and the premium: generally, a higher deductible leads to a lower premium, and a lower deductible leads to a higher premium.

• Higher deductible means more out-of-pocket before benefits begin.
• Lower premium means lower monthly cost for coverage.
• Suitable for those who are healthy or have emergency savings.
• Opposite is true for lower deductible/higher premium plans.

Memory trick: The deductible is the 'gate', the premium is the 'toll'.

A waiting period in a long-term care insurance policy, starting from the day care is first received, during which the policy will not pay benefits. It's similar to a deductible.

• Must be satisfied before benefits begin.
• Common periods are 30, 60, 90, or 180 days.
• Insured is responsible for care costs during this period.
• Longer periods result in lower premiums.

Memory trick: Eliminate the wait, then multiply by the daily benefit.

A traditional health insurance plan where the policyholder pays the provider for services and then submits a claim to the insurer for reimbursement, often based on a predetermined schedule of benefits.

• Offers the most freedom in choosing providers.
• Insured typically pays for services first, then is reimbursed.
• Insurer pays a specified dollar amount for each service.
• Insured is responsible for any balance billing (difference between charge and benefit).

Memory trick: How your health plan pays the bills defines its type.

Accidental Death and Dismemberment (AD&D) insurance provides a lump-sum payment for accidental death or specific accidental injuries, while Disability Income insurance provides a regular income stream if the insured is unable to work due to illness or injury.

• AD&D: Event-driven (accident), lump sum for specific losses.
• Disability Income: Income replacement, covers both illness and accident.
• AD&D is often a rider; Disability Income is a standalone policy.
• Both are distinct from life insurance (which covers death from any cause).

Memory trick: AD&D is for 'oops' and 'ouch' (lump sum), Disability is for 'can't work' (income).

An annuity payout option that provides the highest possible income payments for the annuitant's lifetime, but ceases all payments upon their death, with no benefits to a beneficiary.

• Provides the maximum income per payment.
• Payments guaranteed for the annuitant's entire life.
• No payments continue to a beneficiary after death.
• Annuitant accepts the risk of dying early and 'losing' remaining principal.

Memory trick: Straight Life: Live Long, Get Most, Die Empty

Medicare health plans offered by private companies that contract with Medicare to provide Part A and Part B benefits.

• Replaces Original Medicare (Parts A & B)
• Often includes prescription drug coverage (Part D)
• May offer additional benefits like vision, dental, hearing

Memory trick: Part C 'C'overs A and B, 'C'ombining them into one.

A mandatory health insurance policy provision that allows the policyholder a specified period (typically 10 days) after delivery to review the policy and return it for a full refund if not satisfied.

• Starts upon policy delivery.
• Allows for full refund if returned within the period.
• Protects consumers from buyer's remorse.

Memory trick: Look Freely, Refund Fully, Ten Days Kindly.

A flexible premium, adjustable death benefit life insurance policy that allows the policyowner to direct the investment of the cash value into various sub-accounts, similar to mutual funds.

• Flexible premiums and adjustable death benefits.
• Cash value growth is tied to performance of separate accounts.
• Policyowner bears investment risk.
• Requires securities license to sell.

Memory trick: VUL: Variable, Universal, Life - the Ultimate Flexibility

A provision that prevents an insurer from voiding a policy or denying a claim based on misstatements in the application after a certain period (e.g., 2 years), unless fraud is involved.

• Protects policyholders from arbitrary claim denials after a period
• Fraudulent misstatements may allow contestability beyond the period
• Time limit usually starts from policy issue date

Memory trick: The 'Incontestable' clause ensures policy 'In'tegrity after a set 'Time'.

The process of determining the insured's financial responsibility for medical expenses, involving deductibles, coinsurance, and out-of-pocket maximums.

• Deductible is paid first by the insured.
• Coinsurance applies to expenses after the deductible is met.
• Out-of-pocket maximum is the most an insured will pay in a policy year for covered services.

Memory trick: Deduct - Coinsurance - Cap: The three steps to your medical bill.

A life insurance policy clause that, in the event of a common disaster where the insured and primary beneficiary die simultaneously, presumes the primary beneficiary died first.

• Prevents proceeds from going into the primary beneficiary's estate.
• Ensures proceeds are paid to the contingent beneficiary.
• Often based on the Uniform Simultaneous Death Act (USDA).

Memory trick: Simultaneous Deaths: Safeguard the Successor

A life insurance rider that allows the policyowner to purchase additional amounts of insurance coverage at specific future dates or upon certain life events without providing evidence of insurability.

• Eliminates the need for a new medical exam for additional coverage.
• Options can typically be exercised at specified ages (e.g., 25, 28, 31, 34, 37, 40).
• Can also be exercised upon qualifying life events (e.g., marriage, birth/adoption, home purchase).
• Each option typically has a maximum additional purchase amount.

Memory trick: Guaranteed Insurability: Grow with Life's Steps

Private health insurance policies that help pay for some of the health care costs that Original Medicare (Parts A and B) doesn't cover, such as copayments, coinsurance, and deductibles.

• Works with Original Medicare, not Medicare Advantage.
• Standardized plans (A-N) available.
• Must be purchased from a private insurer.
• Does not cover long-term care, vision, dental, hearing aids, or private-duty nursing.

Memory trick: Original Medicare has gaps; Medigap fills them. Advantage is a whole new plan.

A waiting period after the onset of a disability during which no benefits are paid.

• Functions like a deductible for time, not money
• Chosen by the applicant, affects premium cost
• Benefits begin after the period ends, not retroactively

Memory trick: Elimination period is the 'Start' line, not the finish line, for benefits.

Insurance that provides coverage for assistance with daily living activities or supervision due to cognitive impairment, typically not covered by standard health insurance.

• Covers non-medical personal care services
• Triggered by inability to perform ADLs or cognitive impairment
• Can be received in various settings: home, assisted living, nursing home

Memory trick: LTC helps with 'Daily' 'Living' not 'Doctor's' 'Visits'.

A provision in a group health insurance policy that allows an eligible individual to convert their group coverage to an individual health insurance policy upon termination of employment or group eligibility, without providing evidence of insurability.

• Must be exercised within a specific timeframe (e.g., 31 days).
• Individual policy premiums are typically higher.
• Benefits may be less comprehensive than the group plan.
• Protects against loss of coverage due to job change.

Memory trick: Group provisions: COB for multiple policies, Conversion for individual, COBRA for temporary group extension.

A health insurance policy provision guaranteeing the insured's right to renew the policy, and that the premiums cannot be increased and benefits cannot be reduced, as long as premiums are paid.

• Most protective renewability clause for the insured
• Insurer cannot unilaterally change policy terms or rates
• Typically found in disability income policies

Memory trick: Noncancellable: 'No' cancels, 'No' raises, 'No' changes.

A mandatory health insurance provision that allows the insurer to adjust disability benefits if the insured changes to a more or less hazardous occupation, often retroactively if not notified.

• Protects insurer against uncompensated risk.
• Benefits reduced if occupation becomes more hazardous.
• Benefits may be increased if occupation becomes less hazardous.

Memory trick: Job Change, Benefit Rearrange, Fairness for the Exchange.

A provision in a life insurance policy that protects the proceeds from the claims of the beneficiary's creditors and prevents the beneficiary from assigning or encumbering the proceeds.

• Protects policy proceeds from beneficiary's creditors.
• Prevents beneficiary from assigning or transferring rights to proceeds.
• Ensures funds are paid directly to the beneficiary as intended.

Memory trick: Spendthrifts Guarded By Clause

A waiting period in a disability income policy, starting from the onset of a disability, during which no benefits are payable. It's similar to a deductible.

• Must be satisfied before benefits begin.
• Can range from a few days to several months.
• Longer periods result in lower premiums.
• Reduces the insurer's liability for short-term disabilities.

Memory trick: Eliminate the wait, then get paid for the benefit period.

A provision in group health insurance that specifies a minimum percentage of eligible employees who must enroll in the plan for it to be offered or maintained, designed to prevent adverse selection.

• Typically ranges from 50% to 75% for non-contributory plans (employer pays 100%).
• Higher for contributory plans (employees contribute to premiums).
• Ensures a sufficiently large and diverse risk pool.
• Protects the insurer from having disproportionately high-risk members.

Memory trick: Group underwriting balances the risk of many individuals.