Current and Future Planning Objective 8.03. Health Care Issues Make smart health care decisions ...
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Transcript of Current and Future Planning Objective 8.03. Health Care Issues Make smart health care decisions ...
Current and Future Planning Objective 8.03
Health Care Issues
Make smart health care decisions Research different health care providers Be honest on applications Be certain you understand all exclusions and conditions Be aware of expiration dates, cancellation terms, and
renewal policies Power of attorney: court document naming someone who
has permission to act on the person’s behalf in case of illness or inability to perform their normal duties
Know the Legal Issues involved with Health Care
Types of consentGeneral consent: permission given for
tests and treatments, the moment the patient enters the hospital
Informed consent: procedure which requires physicians to tell patients in advance of any risks involved in forthcoming treatment; must be in writing
Health Insurance
Basic health insurance – a limited medical insurance covering hospital, surgical and medical expenses. Limited by:– Numerous exclusions– Low maximum benefits– Waiting periods
Major Medical Insurance
A broad medical policy covering – Inpatient and outpatient hospital care – Long term hospitalization– Home nursing care– Prescription drugs– Physician visits – Surgery – Laboratory tests
Major MedicalCan be purchased two ways: Group plan through optional employer benefits
– Employer pays a portion of employee’s premium– Employee has option to pay extra and include
dependents on the plan – Insurer usually offers lower premium due to large
group (large risk pool spreads expenses so rates are lowered)
– May also include vision and dental insurance Individual plan
– Insured must choose plan and pay all costs
Major Medical
May require patient to pay :– Annual deductible before insurer
pays anything– A flat co-pay for doctor visits– A %(10-30%) of the remaining
balance due– A maximum out of pocket expense
each plan year
Cost factors for Health Insurance
– Type of policy– Limits and exclusions of coverage– Deductible/Co-pays– Group or individual plan– Age– Health– Company
*Supplemental Info* Additional Health Insurance Options
Health Maintenance Organization (HMO)– Requires co-pays– Patient chooses from list of approved service
providers– Designed for preventive medical service
Preferred Provider Organization (PPO)– Patient chooses from list of approved service
providers
*Supplemental* Other Health Insurance
Vision - coverage for care of eyes Dental -coverage for care of teeth Cancer-coverage for treatment of
cancer Hospital Indemnity - pays insured when
in hospital
Medicare and Medicaid
Medicare: Provides health coverage for most people over age 65 and some disabled persons, provides medical and hospital insurance
Medicaid: Covers certain individuals who need public assistance
Health Care Review
Answer the following questions: 1. Explain the difference between general
and informed consent. 2. What does basic health care cover? 3. What two ways can Major Medical
Insurance be purchased? 4. Name 4 cost factors for Health Insurance. 5. What is the difference in Medicare and
Medicaid?
Disability
The Americans with Disabilities Act Employers cannot discriminate against individuals with
disabilities The ADA defines a disabled individual as an individual who
has a physical or mental impairment that substantially limits one or more of the major life activities
Indirect discrimination: includes using a qualification for hiring that is not related to job performance, but is used to exclude the disabled individual
Direct discrimination: includes not hiring an individual simply due to their disability
Private Income Disability Insurance
Purpose: To protect the individual against risk of losing income from regular occupation due to illness or injury causing disability.
Insured may buy a policy from a private company.
Indemnifies for wages lost– Proceeds (benefits paid) are not taxable– Proceeds are 65% of normal wage
Disability Insurance
For private disability insurance, the insured chooses: – Short term or long term policy– Total or partial disability options– Elimination period - number of weeks
before claim is payable
Disability Insurance
– Elimination period or waiting period is the number of days or weeks that the insured waits before the insurer pays disability claim
– Form of risk retention– Comparable to a deductible– Cause and effect similar to a deductible:
Longer elimination period=lower premium Shorter elimination period=higher premium
Cost Factors Private Income Disability Insurance
Dollar Amount of disability benefit requested
Length of elimination period
Risk involved in type of work
Company
Age
Health
Disability Review
Answer the following questions: 1.T/F Employers can discriminate against individuals
with disabilities. 2. What is the difference in indirect and direct
discrimination 3. What is the purpose of Private Income Disability
Insurance? 4. From private disability insurance, what can the
insured choose? 5. What is the difference in a longer and shorter
elimination period?
Retirement Planning
Private Pension Plans
Government Pension Plans
Individual Pension Plans
Private Pension Plans
Benefits by an employer to provide retirement funds to their employees– Examples: 401K, SEP, Profit Sharing
Offered as a benefit, not required by law Employers have the option to fund the plan by
themselves or require the employee to contribute Vesting: act of giving a worker a guaranteed right to
receive a future pension Portability: ability to transfer pension benefits from
one job to another
Government Pension Plans
Can receive a percentage of social security by age 62, but the individual can receive full benefits at either age 65 or 67.
A person can receive social security benefits if their spouse dies.
Disability is considered a social security benefit. Medicare is also considered a social security benefit Railroad pensions Military pensions Civil service pensions
Social Security Disability
The D in RSDHI of Social Security benefits
Replaces income when a severe long lasting disability prevents eligible person from doing “any substantial work”.
Employer and employee match contribution into social security fund.
File claim through Social Security Administration Six month required elimination (waiting) period Only long term disability or terminal illness Periodic review of status to continue benefits
Individual Pension Plans
Can be set up by self-employed individuals, or individuals who do not receive private pension plans from their employers
Individual Retirement Accounts (IRA’s): individual pension plans where a portion of their income is saved each year Only a certain amount of income is allowed to be placed in
an IRA The interest on the IRA is not taxed until the money is
withdrawn Keogh Plans: set up by individuals who are
sole-proprietors or in a partnership
Unemployment Insurance
Designed to lessen the financial hardship of losing one’s job
Must have been working to file for benefits
Controlled by individual states
North Carolina’s Employment Security Commission regulates disbursements when claim filed
Unemployment Insurance
Social Security Act provides for joint federal and state unemployment system
Federal Unemployment Tax Act (FUTA) State Unemployment Tax Act (SUTA)
– Both FUTA and SUTA taxes are paid completely by employer
Monies are paid into a special fund for workers who have been discharged without cause (lost their jobs through no fault of their own)
Unemployment Benefits
Employee files claim through NC Employment Security Commission
One or two week waiting period before benefits are paid
Benefits payable for limited number of weeks
Percentage of lost wages paid
Filing Unemployment Claim
Employee
– Files claim with Employment Security Commission
– Collects money when laid off from job or otherwise “discharged without cause”
– Searches for replacement job
Unemployment Insurance
Reasons workers are NOT covered:
– Violating a contractual employment obligation or other discharges “for cause”
– Striking employees
– Quit voluntarily
– Refuse to accept similar replacement work
Unemployment Insurance Costs
Business’ employment history is risk factor
How often employees are laid off from work
How many employees are laid off from work
How long employees are laid off from work
Worker’s Compensation
A government-regulated program that provides medical benefits and income to employees who are injured or who develop a disability or disease as a result of their job
Indemnifies (pays) employee for their loss Job related illness or injury Coverage is no fault Insurance is paid for by employer
Worker’s Compensation
Worker’s compensation indemnifies employee for:– Rehabilitation– Related medical expenses – Time lost from work– Permanent damage from injury or illness
Workers Compensation
Costs – Paid completely by employer
Cost factors– Employer’s claim history– Risk rating of job
Retirement Review
Answering the following questions: 1. Name 3 examples of retirement plans. 2. What is portability? 3. What are 2 examples of Government
Pension Plans? 4. What is the retirement plan called that an
individual saves part of their income each year?
5. What is one thing an employee must do in order to file for unemployment?
Will Requirements
Will - Document drawn up and signed by persons during their lifetime to provide for distribution of their property upon their death
Decedent - Deceased person Heirs - Persons who inherit by right of
relationship A man who makes a will is called a testator, a
woman is called a testatrix The testator/testatrix must have capacity to
create a will
Will Requirements (cont.)
The law of wills varies from state-to-state A will must be in writing, properly signed, and
witnessed. In some states a holographic will (written in the
decedents own handwriting) is acceptable. A nuncupative will is an oral will that some states will
recognize. To change a will, the testator/testatrix should write a
new will or change it by a codicil (amendment to a will).
Will Requirements (cont.)
A will states an executor/executrix Executor: person named in the will to carry out the
terms of the will The executor or representative will: make sure the
assets are assembled, preserved, inventoried, and appraised (court supervised procedure), publish notice to creditors, pay all receivables from debtors, pay all legitimate expenses of the decedent, distribute property according to will (must divide according to state law)
The will may state a guardian for children if spouse is not alive
Intestacy
A person who dies without making a will is said to have died intestate.
The estate is handled in the same way as if there was a will.
Instead of an executor/executrix, there is an administrator/administratrix to look after the estate
Intestacy (cont.)
The administrator/administratrix must distribute the estate according to the laws of the state
The personal property of the decedent goes to the heirs according to state law
Generally, the spouse is entitled to one-half or one-third of the estate
Children split the remaining equally Children cannot be forgotten If someone dies without a will and does not have a
living relative, after the bills are paid, then the estate is escheated (held by state government)
Trusts
Trust: transfer of property from one party to another with instructions on how it is to be managed for the benefit of the transferor or a third party
Trusts may be created during the lifetime of the settlor (creator), known as inter vivos trust
Trusts may also be created after the death of the settlor in correspondence with his or her will, known as a testamentary trust
A charitable trust is created for the fulfillment of humane purposes
A private trust is created for a private purpose Spendthrift trust protects the beneficiary from creditors
Trusts (cont.)
Express Trusts are created by a written or oral statement in which all terms are clearly expressed.
Implied TrustsResulting Trust: formed when the body intended to
receive the benefit of an express trust cannot do so
Constructive Trust: created to require a person holding property to transfer it to another because retaining the property would be wrong and unjust
Will Requirements Review
Answer the following questions: 1. What is an executor? 2. What is an administrator? 3. What is the term for when a person
dies without a will? 4. What is a holographic will? 5. What is the transfer of property from
one person to another called?