Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

(12 points) An extended health plan offers the following coverage modifications to employees and their families of an organization: (i) Annual deductible: $25 each benefit

image text in transcribed

(12 points) An extended health plan offers the following coverage modifications to employees and their families of an organization: (i) Annual deductible: $25 each benefit year (January 1 - December 31) for an em- ployee (single) enrolled in the plan, or $50 each benefit year if the employee has a family with at least two people; (ii) Prescription Drugs: 75%; (iii) Paramedical Services: counseling services 100%; all other paramedical services 75%; (iv) Vision care: 100% of the cost, up to a maximum of $400 in a 24-month period; (v) Medical Services & Equipment: 75%; (vi) Emergency Out-of-Province Medical Care: 100%; (vii) In-Province Hospital: 75%; (viii) After $500 has been paid by the family in a calendar year, further eligible expenses for that family within that year will be reimbursed at 100%; (ix) Contract lifetime maximum is $1,000,000 for this benefit. (a) Consider an employee who has a family (a couple and one child). Calculate the payment amount paid by the insurer and the family (policyowner), respectively, for each of the following eligible claims incurred as well as total out-of-pocket payments in one calendar year by this family: Paid by Paid by Policyowner Insurer 1 2 3 4 5 Claim amount 90 250 300 150 500 300 850 150 550 3140 Type of claim (ii) (iii) counseling (v) (ii) (vii) (iii) other (vi) (ii) (iv) 6 7 8 9 Total (b) If the 75% coinsurance rate is increased to 80%, what is the total out-of-pocket payments paid by this family for this calendar year

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Contemporary Issues In Behavioral Finance

Authors: Simon Grima

1st Edition

1787698823, 978-1787698826

More Books

Students also viewed these Finance questions