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Financial Empowerment Center
Counselor Training Curriculum
Topic 12: Insurance and Benefits
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Questions to Think About
• What is the difference between an insurance
deductible and an insurance premium?
• What are the different types of insurances?
• How do you choose the right insurance?
• What are some public benefits available for your
clients?
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Insurance
Risk Management
• Contractual arrangement where purchaser of
insurance is reimbursed or made whole in event of
losses or expenses due to unexpected events,
catastrophe, illness or death
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Insurance Premium
• Amount paid to insurance company to maintain
coverage
• Keeping costs down – Mitigate risks, preventative
measures (for both insurer & insured)
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Insurance Deductible
 Amount of loss or expenses paid by purchaser before
the insurance covers
 The higher the deductible, the lower the premium
because purchaser bears greater risk
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Health Insurance
What is Covered?
 Covered services listed under policy as are services not
covered
 Covered services may not include what doctor thinks is
“medical necessity” because service is not among “covered
services”
• “Usual and customary expenses”: Charge for health care
consistent with average rate or charge for identical or
similar services in geographical area
• Sometimes referred to as “reasonable” charges
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Health Insurance
What if my insurance company refuses to pay for
treatment or a prescription recommended by a doctor?
• If the treatment is not covered, the patient will have
to pay for it
• The client may file an appeal of claim but the
outcome will be dependent on the contract terms
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Health Insurance
•
Flexible Spending Plans – Pre-tax dollars set aside
to pay for expenses not covered by insurance
 May be used to cover deductibles
 Cover expenses generally deductible as medical
expenses under IRC
 No IRS cap-employer sets cap
 Use it or lose it
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Basics Costs Covered by Health Insurance Policy
• Basic Hospital Services – Semi-private room, food, emergency
room, nursing, intensive care, ambulance service, medicines,
X-rays and lab tests. Cost of private room not covered unless
it’s a “medical necessity”
• Surgery – Surgeons, assistant surgeons, anesthesiologists, and
outpatient surgery; Plan covers “usual and customary” costs
• Outpatient Care – Procedures previously needing
hospitalization now done on outpatient basis. To avoid
infections and other unforeseen complications, policy should
provide adequate home healthcare support
• Home Health Care – Will cover part of home health care costs
only if it’s ordered by a doctor
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Basics Costs Covered by Health Insurance Policy
• Most Doctor Bills – Full or part where charges are “usual and customary”
• Coverage for Children – Under the Affordable Care Act, if your plan covers
children, you can now add or keep your children on your health insurance
policy until they turn 26 years old. Children can join or remain on your plan
even if they are:
• married
• not living with you
• attending school
• not financially dependent on you
• eligible to enroll in their employer’s plan
There is one temporary exception: Until 2014, “grandfathered” group plans
do not have to offer dependent coverage up to age 26 if a young adult is
eligible for group coverage outside their parent’s plan.
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Source: www.healthcare.gov/law/features/choices/young-adult-coverage/index.html
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Basics Costs Covered by Health Insurance Policy
• Children with Mental or Physical Disabilities – If the children
are unable to support themselves, they should be covered
permanently, if disability occurred while they were insured.
• Care for Infant From Moment of Birth – Required to notify
insurer of birth within 30 days — most plans provide infants with
major medical coverage from birth; may not cover therapy for
all birth defects
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Basics Costs Covered by Health Insurance Policy
• Convalescing in Nursing Home – Will cover part of cost;
After hospital stay, but nursing care still required
• Prescription Drugs – May cover part of the cost of
prescription drugs
• Mental, Drug and Alcohol Abuse Treatments - May cover
part of the cost of treatments
• Most Incidental Expenses – Physical therapy, oxygen,
durable medical equipment (DME), e.g. wheelchairs,
walkers
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Getting Health Insurance Coverage
As an Employment Benefit
 Offered by Employer – May be some restrictions on
eligibility such as length of employment, employee
may pay part of premiums
 COBRA – Terminated employee is permitted to
continue coverage for 18 months by paying the
employer and employee’s cost himself
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Types of Health Insurance Plans
• Indemnity Plans – Fee for service
• Managed Care – Designed to reduce costs and increase
quality of care by providing infrastructure for referrals
and treatment
HMO - Health Maintenance Organization
POS - Point-of-Service Plan
PPO - Preferred Provider Organization
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HMO
Limited options for out-of-network care
Generally pay less: out-of-pocket, paper work
Coordination of care overseen by primary-care doctor
Co-payments are generally $10 to $20.
Deductibles are generally lower than in a PPO, between
$100 and $500.
• Usually won't have to pay co-insurance.
• Need a referral from primary-care doctor to see a
specialist
•
•
•
•
•
Source: Consumer Reports www.consumerreports.org/health/insurance/health-insurance/how-to-pick-health-insurance/hmo-vs-ppo.htm
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HMO
• Can see providers or go to hospitals outside of HMO's
network but usually have to pay full cost.
• Reasons to choose HMO:
 Are comfortable with some restrictions on your choice of
doctors and hospitals.
 Don't have out-of-network doctors you want to keep
 Like the idea of a primary-care doctor coordinating your care
Source: Consumer Reports www.consumerreports.org/health/insurance/health-insurance/how-to-pick-health-insurance/hmo-vs-ppo.htm
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POS
• POS plans as a compromise option and operates like
HMOs
• Choose a primary-care doctor from plan's network
• Have low co-payments and no deductibles or coinsurance costs for in-network providers
• Must get referral to see in-network specialists
• But like PPOs, can also see out-of-network providers need a referral first, have to pay a deductible and a
percentage of the cost.
Source: Consumer Reports www.consumerreports.org/health/insurance/health-insurance/how-to-pick-health-insurance/hmo-vs-ppo.htm
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POS
• Many HMOs offer a POS option
• Reasons to choose POS:
 Like idea of HMO but want more flexibility to see out of network
providers
 Like an HMO in your area but have one or two doctors you want
to see that are not in its network
 Like the idea of a primary-care doctor coordinating your care
 Don't mind paying more to see out-of-network doctors
 Don't mind additional paperwork hassles going out of network
Source: Consumer Reports www.consumerreports.org/health/insurance/health-insurance/how-to-pick-health-insurance/hmo-vs-ppo.htm
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PPO
• Pay more out-of-pocket for PPO vs. HMO, especially if see
out-of-network doctors. But PPOs tend to have larger
networks and make it easier to get out-of-network care
• For in-network, or "preferred," doctors, you typically pay
a $15 to $30 co-payment.
• Pay an annual deductible, generally between $250 and
$1,500
• Can see specialists, including those outside the network,
without a referral from a primary-care doctor
Source: Consumer Reports www.consumerreports.org/health/insurance/health-insurance/how-to-pick-health-insurance/hmo-vs-ppo.htm
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PPO
• Can get care outside at higher cost, generally 20 to 40
percent of the bill
• Likely also have to pay "co-insurance," or the difference
between what the doctor charges and the PPO deems
"reasonable and customary”
• Reasons to choose PPO:
 Don't mind paying more for care than you might if enrolled in an
HMO in exchange for greater freedom.
 Want ready access to specialists and out-of-network doctors and
hospitals
 Don't mind additional paperwork if going out of network
Source: Consumer Reports www.consumerreports.org/health/insurance/health-insurance/how-to-pick-health-insurance/hmo-vs-ppo.htm
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Purchasing Health Insurance Coverage
Group insurance rates may be available through:
• Trade Associations
• Business or Professional Associations
• University or College – If enrolled as full-time student
• Affordable programs
• Washington State Health Benefit Exchange
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Purchasing Health Insurance Coverage
What is Washington Health Benefit Exchange?
As part of national health reform, the Washington Health
Benefit Exchange is working to create Washington
Healthplanfinder – an easily accessible, online
marketplace for individuals, families and small businesses
in Washington State to compare and enroll in qualified
health insurance plans. Washington Healthplanfinder will
begin enrolling consumers on October 1, 2013, for health
insurance coverage beginning on January 1, 2014.
Source: http://wahbexchange.org/
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Life Insurance
Benefits are paid to designated “beneficiary” in case of
death of insured, i.e. “death benefit”
• Provide for loved ones as an income replacement
• Provide for funeral and burial costs
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Types of Life Insurance
• Whole Life – Permanent level death benefit and a level
premium; has cash value and pays dividends
• Universal Life – Permanent life insurance based on a cash
value, i.e. policy established with insurer and premium
payments above the cost of insurance are credited to the
cash value. Can adjust premium or death benefit; may be
linked to investments
• Term Life – Coverage for specific period of time
 For term of employment
 SBLI – Savings Bank Life Insurance may be source of
affordable term life insurance
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Other Types of Insurances
Disability Insurance – Replaces income in event of disability
• Usually a percentage
• Short-Term: 6 months
• Long-Term: over 6 months
Long-Term Care Insurance Coverage Provides For:
• Nursing-home care and/or home-health care
• Personal or adult day care usually for individuals above
age of 65 or with chronic or disabling condition needing
constant supervision
• Offers more flexibility and options than many public
assistance programs
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Other Types of Insurances
• Renters Insurance – Covers damage and loss of
contents of rented premises
• Homeowners Insurance – Covers damage, fire,
liability and loss of property including theft. May also
apply to “away from home” losses such as a child’s
loss from a college dormitory room
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Auto Insurance
• No-Fault (Personal Injury Protection) – Medical
expenses and lost earnings for driver, passenger, or
pedestrian injured in vehicular accident
• Liability – Covers damage to car – driven by owner or
another driver with owner’s permission
• Uninsured Motorists – Covers injuries to owner, driver or
passengers in hit-and-run accident or in an accident with
an uninsured vehicle
• Optional: Collision, coverage above required minimums
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Employment Benefits
• Referrals to services such as child care, elder care,
etc.
• Employee benefits:
Child Care Savings Accounts – Funds put away for
child focused expenses such as school related costs
Transit Benefits – Pre-tax purchase of public
transportation fares
Direct Deposit – Electronic deposit of paychecks to
allow immediate access to funds
Retirement Savings – Employer contributions
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Government Benefits Cash Programs
• Cash Assistance (CA) – Formerly Public Assistance
 Federal/state needs-based cash benefit program. You can use the
"Am I Eligible" option on the WashingtonConnection.org web site.
 TANF
o Diversion Cash Assistance (DCA)
 Monthly cash benefit through an EBT card, also called at "Quest
Card" which works similar to a debit card. To learn more, go
tohttp://www.dshs.wa.gov/pdf/Publications/22-310.pdf
• Supplemental Security Income (SSI)
 Federal needs-based cash entitlement program administered by SSA
 Provides a uniform cash benefit to eligible, low-income elderly,
disabled or blind persons
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Cash Programs
• Social Security Disability Insurance (SSDI)
 Federal insurance-based cash entitlement program administered by SSA
 Provides a monthly cash benefit to disabled workers and their
dependents
 Benefit amount is based on the worker’s contribution over his/her
lifetime
• Social Security Retirement & Survivors Insurance (RSI)
 Federal insurance-based cash entitlement program administered by SSA.
 Provides a monthly cash benefit to retired workers and their eligible
dependents/survivors
 Benefit amount depends on the worker’s contribution over his/her
lifetime
 RSI recipients at age 65 are entitled to Medicare.
*Individuals may be entitled to receive both SSI & SSDI or SSI & RSI,
if they meet the eligibility criteria of both programs.
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Health Benefit Programs
• Medicare
 Insurance-based health benefit program for the elderly, disabled or
blind, or individuals with End Stage Renal Disease, administered by SSA
 Provides hospital and medical insurance, and prescription drug
coverage
 Applicant must be legally present in the U.S. with a valid SSN
• Medicaid
 Needs-based health benefit program that pays for a comprehensive
range of medical services for persons with low income. Starting January
1, 2014 Medicaid coverage will be expanded to 138% FPL.
 Undocumented immigrants are not eligible unless they have a medical
emergency and/or are pregnant as long as they and meet all other
eligibility criteria
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Washington HealthPlanFinder
• Coming October 1, 2013 – CLICK. COMPARE. COVERED.
• Washington Healthplanfinder new web portal to apply for
health coverage. To learn more, go to
www.kingcounty.gov/health/access or call 800.756.5437.
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Food Programs
• Food Stamps
 The US Department of Agriculture (USDA), Supplemental
Nutrition Assistance Program (SNAP), called Basic Food in
Washington, helps low income people make ends meet by
providing monthly benefits to buy food.
 Eligibility is based on immigration status, available
resources, and income.
 Legal immigrants who are not eligible for federal basic
food solely due their immigration status may be eligible
for the state Food Assistance Program (FAP).
 Apply on-line by using WashingtonConnection.org.
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Public Benefit Eligibility
Insurance – Based Benefits
 Must usually be part of a defined demographic group to be
eligible. The categories include aged, blind, disabled, families
with dependent children, singles, and childless couples.
 Must apply in county of residency, but may be able to reside in
another county of the state, or possibly other states or counties
depending on the benefit
 Must be legally present in the US and have a Social Security
number
 Must meet the insured status requirement, which is defined by
the respective benefit program
 There are no income or asset/resource criteria
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Public Benefit Eligibility
Needs-Based Benefits
 Must usually meet demographic categories to be eligible: the
benefit will specify which factor must be met
 Must apply in county of residence, and usually must continue
to reside in that county. If recipient moves, he/she might
need to reapply in new county
 Must meet the citizenship/immigration requirements
 Does not need to meet an insured status requirement, with a
limited exception for legal permanent residents applying for
SSI
 Must meet income criteria, which varies by program
 Must usually meet asset/resource limits
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Washington Connection’s online pre-screening and
application portal is an easy and quick way to help
determine eligibility. By accessing the portal you can see
what benefits that your client might be eligible to apply
for, and assist in submitting their application all in one
online session.
The goal of Washington Connection is to link Washington
State residents with vital services and
benefits.
www.washingtonconnection.org
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Lasting Thoughts
• An insurance premium is the amount paid to insurance
company to maintain coverage.
• A deductible is the amount of expenses paid by purchaser
before the insurance covers anything.
• The higher the deductible, the lower the premium because
the purchaser bears greater risk.
• There is insurance for almost everything – health care, home,
automobile, etc.
• Insurance should be picked based on the client’s needs, age,
income, etc.
• Always check for government benefits that your client may be
eligible for.
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Topic 12 Exercise #1
Given the following information about Marta and Bobby’s family,
what guidance would you want to give them regarding insurance
and benefits?
Marta (age 34) and Bobby (age 37) are married with 2 children, a
girl, Elena (age 7) and a boy, Martin (age 10). Bobby has
employer-provided health insurance, but it does not cover dental
and has an annual $500 deductible, and no prescription coverage.
Marta only works part-time and has no benefits.
Marta’s mother, Cecilia (age 59) emigrated from her native
country a few years ago and lives with Marta and Bobby. Cecilia
has just started a job. She has no savings and no health
insurance.
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