Assessment Case study ( 5 marks)

INSU 303

Life and Health Insurance

David had a grandfathered health insurance plan from Blue Shield of California. He enrolled in the Savings 5200 (HSA Compatible) back in 2008 and been satisfied with the policy until the last couple years.

When David called SPF Insurance on January 26, 2016 he explained that he had received a notice from Blue Shield telling him that the rate on his grandfathered plan was going up to a little over $900/mo. That was more than he could justify for he, his wife, and daughter.

David stated that everyone in the family was healthy and rarely went to see a doctor.

He explained that his wife had specific doctors that she wanted to be able to see, and his daughter had a paediatrician as well. And since he felt Redding did not have any good hospitals he wanted to be able to go to the UC Davis Hospital or the Stanford Hospital if needed.

David also wanted to know if he should keep his 20 year old son on the family health insurance coverage even though his son lived on his own and had a job. Last but not least, he mentioned that his daughter was going to need braces and he wanted to get dental insurance to take care of that as well as regular check-ups and cleanings.

In summary, he wanted a lower his premium costs, get comparable coverage and be able to keep all their doctors and hospitals.

Additional Information:

Davids adjusted gross income from his construction business was $57,500 and his wife did not work.

His son earns $18,500 so the total family income would be $76,000.

Answer the following questions:

1. Explain what is grandfathered Insurance plan . (2 marks)

2. Determine what to do about his 20 years old son? Should he be included in the same plan or should he take a separate policy. Give reason. (1 mark)

3. Does dental insurance of his daughter should be included in the plan? (1 mark)

4. What are the two features of PPO dental plans? ( 1 mark)