Questions and Answers
What are the tax ramifications of health insurance premiums paid by Lorenzo, who is self-employed with an S corporation?
100% of his health insurance costs can be deducted from his gross income
How are premiums paid by the insured for personally owned disability income insurance treated for tax purposes?
Not tax-deductible
Which of the following is considered to be a point of service (POS) plan?
What is a requirement for any change in an insurance application?
Signup and view all the answers
What is the gatekeeper's role when used by an HMO?
Signup and view all the answers
Which of the following is considered a tax-deductible medical expense under the IRS rule allowing deduction of medical expenses that exceed 7.5% of adjusted gross income?
Signup and view all the answers
What happens when an insurance policy is backdated?
Signup and view all the answers
What is the difference between pre-certification and concurrent review?
Signup and view all the answers
What is the insurer's liability when an insured is injured as an innocent bystander during a felony?
Signup and view all the answers
What is the appropriate tax consequence when XYZ Corp pays the tax-deductible insurance premiums for a key employee disability policy?
Signup and view all the answers
Study Notes
Health Underwriting Overview
- Self-employed individuals with S corporations can deduct 100% of health insurance premiums from gross income.
- Disability income insurance premiums paid by the insured are not tax-deductible.
- Point of Service (POS) plans function as managed-care plans, blending features of HMO and PPO models.
Insurance Application Changes
- Any alterations to an insurance application must be initialed by the applicant to be valid.
HMO Gatekeeper Role
- In a Health Maintenance Organization (HMO), the gatekeeper (primary care physician) is responsible for obtaining specialist referrals.
Tax Deductions for Medical Expenses
- The IRS allows taxpayers to deduct medical expenses exceeding 7.5% of their adjusted gross income, which includes long-term care insurance premiums.
Backdating Insurance Policies
- Backdating an insurance policy means its effective date is set to a time before the date of application.
Pre-Certification vs. Concurrent Review
- Pre-certification is the process that occurs prior to the treatment, ensuring medical necessity and policy compliance.
Liability for Insured Incidents
- Insurers are liable for losses incurred by insured individuals, even if they are innocent bystanders in a felony situation.
Key Employee Disability Insurance Tax Implications
- When a corporation pays tax-deductible premiums on a disability policy for a key employee, the benefits received by the employee are fully taxable.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
Test your knowledge on health insurance concepts, including tax deductions for health premiums and the roles within various insurance plans. This quiz covers essential topics related to self-employed individuals, HMO structures, and the handling of insurance applications.