640 Class 13 - Class 13 Insurance and Risk Management...

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Class 13 Insurance and Risk Management George D. Krempley Bus. Fin. 640 Winter Quarter 2008
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Agenda Group Insurance Group Life Insurance Plans Group Medical Expense Insurance Traditional Indemnity Plans Managed Care Plans Consumer-driven Health Plans Group Medical Expense Contractual Provisions Group Dental Insurance Group Disability Income Insurance Cafeteria Plans
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Group Insurance Coverage of many persons under one contract Low-cost protection Evidence of insurability usually not required Subject to experience rating
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Group Underwriting Principles Insurance incidental to the group Flow of persons through the group Automatic determination of benefits Minimum participation Third-party sharing of cost Simple and efficient administration
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Eligible Groups Groups eligible - Determined by: Insurance company policy; and State law Groups typically eligible: Individual employer Multiple employer Labor union Creditor-debtor Miscellaneous (fraternities, sororities, alumni groups) Size requirements Traditionally 10 lives Now as small as 2 or 3 lives
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Eligibility Requirements 1. Be a full-time employee 1. Satisfy a probationary period 1. Apply for insurance during the eligibility period 1. Be actively at work when insurance becomes effectives
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Group Life Insurance Plans Group Term Life Insurance Group Accidental Death and Group Universal Life Insurance
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Group Term Life Insurance The most important form of group insurance is group term life insurance Provides low-cost protection to employees Coverage is yearly renewable term Amount of coverage is typically 1-5 times the employee’s annual salary Coverage usually ends when the employee leaves the company Can convert to an individual cash value policy
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Other Group Life Insurance Plans Many group life insurance plans also provide group accidental death and dismemberment Pays additional benefits if the employee dies in an accident or incurs certain types of bodily injuries Some plans offer voluntary accidental death and dismemberment insurance Employees pay the full cost Some employers make available group universal life insurance for their employees
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Group Medical Expense Insurance Group medical expense insurance pays the cost of hospital care, physicians’ and surgeons’ fees, and related medical expenses Insurance is available through: • Commercial insurers • Blue Cross and Blue Shield Plans • Managed Care organizations • Self-insured plans by employers Commercial life & health insurers sell medical expense coverage and also sponsor managed care plans
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Group Medical Expense Providers 1. Commercial insurers 1. Blue Cross and Blue Shield plans 1. Managed care organizations 1. Self-insured plans by employers
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Group Medical Expense Insurance Blue Cross and Blue Shield plans
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This note was uploaded on 07/17/2008 for the course BUSFIN 640 taught by Professor Krempley during the Winter '08 term at Ohio State.

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640 Class 13 - Class 13 Insurance and Risk Management...

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