GROUP DENTAL INSURANCE AND OTHER GROUP INSURANCE BENEFITS

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GROUP DENTAL INSURANCE AND OTHER GROUP INSURANCE
BENEFITS

• CHAPTER 13

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Group Dental Insurance

• Providers
• Insurance companies
• Dental service plans--often called Delta Dental
  plans
• The Blues
• Managed care plans

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Eligibility

• Most rules are similar to group medical expense
  plans.
• Probationary periods
• May be longer than in medical expense plans
• May be same as medical expense plans, but waiting
  period for some expenses (orthodontics)
• Long probationary periods may be false economy if
  they postpone treatment and more expensive care
  is needed later.

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Adverse selection

• A problem because expenditures are postponable
  and somewhat predictable
• Methods to counter
• Reduce benefits for an initial period
• Reduce maximum benefit for late enrollment
• Exclude some benefits for a period of time

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Benefits

• Most plans cover all types of expenses, but some
  plans provide more limited coverage.
• Scheduled plans
• Provide benefits through a fee schedule
• Have maximum benefits for each service
• Nonscheduled plans
• Like major medical
• Benefits subject to coinsurance and deductibles
• Broader coverage may apply to preventive care.

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Exclusions (common ones)

• Purely cosmetic services
• Replacement of lost, stolen, or missing dentures
• Oral hygiene instruction
• Service without uniform professional endorsement
• Occupational injuries if covered under workers'
  compensation
• Free services received by government agencies
• Services that began prior to coverage

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Limitations

• Calendar maximums (500 to 2,000) but no
  lifetime maximum
• Lifetime maximum (1,000 to 5,000)
• Both a calendar year maximum and a lifetime
  maximum
• Frequency of treatment--For example, teeth
  cleaning only once every 6 months
• Will only pay least expensive type of accepted
  treatment

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Predetermination of benefits

• Required if course of treatment exceeds 100-300
• Failure to use does not invalidate benefits

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Termination

• Like group medical insurance
• COBRA rules apply.
• Coverage provided after termination if charge for
  service incurred prior to termination and
  treatment completed within 60-90 days after
  termination.

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Group Long-Term Care Insurance

• Reasons for slow growth
• Individual market still evolving
• Uncertain tax picture
• Uncertainty about inclusion in cafeteria plan
• Modest participation

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Reasons for LT Care coverage

• An aging population
• Increasing costs of institutionalization
• Inability of families to provide care
• Inadequate benefits under Medicare and medical
  expense policies

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Current numbers

• gt 7 million Americans have bought LTC insurance
  since the late 1980s
• C. 77 mm baby boomers will be retiring over the
  next decade
• CBO estimates the annual cost
• 123 billion in 2000
• 207 billion in 2020.
• The average annual cost is 1,677..
• Source PAYING FOR TOMORROW'S CARE. Paul
  Wenske. The KansasCity Star. 2001/10/07. Page
  F10.

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Sources of long-term care

• Personal savings
• Welfare
• Life-care facilities
• Riders in cash value policies
• Individual LTC policies
• Group policies

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Group coverage

• Eligibility
• Active employees and spouse
• Possibly retired employees
• High maximum age, such as 80

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Group coverage-- Cost

• Usually based on five-year brackets
• Level once elected
• Premiums may be paid for life or cease at
  retirement

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Levels of LT care

• Early policies covered only nursing homes, while
  many now include home care, adult day care,
  assisted living and hospice care.
• Skilled nursing care--Daily care needed by or
  under supervision of skilled medical personnel
  and based on doctor's orders
• Intermediate care--Occasional care needed by
  skilled medical personnel
• Custodial care--Help needed to handle personal
  needs. Can be provided by someone without
  professional training

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Levels of LT care (continued)

• Home health care--part-time care received at home
• Adult day care
• Most policies cover at least first 3 categories

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LT Care Benefits

• Eligibility for benefits usually based on
  inability to perform a certain number of
  activities of daily living
• Some policies also pay benefits based on
  cognitive impairment.
• Benefits limited to a specific dollar amount per
  day and may vary by level of care. Some policies
  increase benefits for inflation, but subject to
  an annual maximum.
• Duration of 3 to 6 years common

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LT Care Exclusions (some common ones)

• Care outside U.S.
• Treatment for alcoholism or drug abuse
• Attempted suicide
• Confinement for which insured or estate not
  required to pay
• Preexisting conditions for 6 months

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Renewability and portability

• Guaranteed renewable
• Can be continued on direct payment basis if
  participant leaves employment

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Group Legal Expense Plans

• We will not cover the rest of this chapter