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Insurance Final ASSIGNMENT PROBLEM SET 5?

Situation: You are advising Rita, a new employee to your company. Rita is single and age thirty. Her annual salary is $32,000. Rita has no dependents and does not have any health insurance other than what she qualifies for with your company. She is healthy and has had no major operations or major illnesses. Your company provides the following employee benefit options: Private health insurance package including basic and major medical expense insurance Health maintenance organization (HMO) coverage through Blue Cross/Blue Shield Preferred provider organization (PPO) coverage through Blue Cross/Blue Shield Your employer also provides a sick days plan with the following payment provisions designed to be coordinated with Social Security disability benefits. Period of time out of work: One day to two weeks, 100 percent of pay received Two weeks to three months, 70 percent of pay received Three months to six months, 50 percent of pay received 1. Which health benefit alternative is most appropriate for Rita? Why? 2. Rita is injured in an auto accident. She requires surgery and hospitalization that amount to $175,000 in medical expenses. She also misses four months of work. **This is the beginning of question 2, I for got to post, Sorry** Thanks for everyone's help!** Which, if any, of the health coverages provided through the employer would pay for the following loss exposures Rita faces? Justify your answers.

Public Comments

1. 1. It's impossible to answer without comparing exact coverages. 2. This isn't a question, it's a statement.
2. L O L, This is a trick question. When Rita is hired, she will make the choice of which health insurance option she wants. She might choose any of them based on what her cost would be, which most likely be deducted in her pay. She most likely would look at each company and based on the deductible, co-pays or co-insurance, choose one over another. The sick days is a benefit that the company provides and if she is never sick or disabled, may never use it at all. It is just that, a benefit that the employer provides, since most companies do not have to provide this and is optional. When Rita was hired, she did not have the auto accident yet, so that would never be a factor, since she chose what health insurance package she wanted due to her health at the time she was hired and also the cost that she would have paid via her paycheck. Auto insurance is primary and health insurance is secondary. So if Rita has medical payment coverage and/or PIP on her auto insurance, it would pay 1st, up to the limits of coverage, then her health insurance would come into play. If she is not at fault and if she were to settle with the other insurance company with an injury settlement, then out of that settlement, the auto insurance and health insurance would have a lien on her settlement to get repaid back what they paid out for her medical bills. Since surgery, would be off from work and her employer would pay her wages based on the time off due to her treatment and recuperation. One other thing to consider, is that since most employer health insurance is yearly, you cannot change plans till the employer has renewals, so would be stuck with the plan she chose when 1st hired. Her choice on what she chooses has nothing to do with the accident, that is the trick of the question, since she would not know or expect to have an accident with $175,000 in medical expenses. good luck