Acceptable Loss Ratio The ratio of claims to premium expected by an insurance company based on the claims in their block of business. If a group has a loss ratio equal to the Acceptable Loss Ratio, the rate adjustment at renewal will reflect only Trend Factor.
AD&D The acronym for Accidental Death and Dismemberment insurance. This benefit provides for a lump sum payment to the insured or his/her beneficiary in the event of a specified loss of limb or life.
Administrative Services Only (ASO) A form of self-insurance under which the employer pays administration fees to an insurer or other service provider for processing claims. The service provider takes on no risk in this arrangement.
Any occupation The definition of disability under which the insurer has most control. In order to continue receiving disability income benefits the disabled employee must be unable, due to illness or injury, to perform any job for which he/she is reasonably suited by training, education or experience.
Assistive Devices Program A program run by the Ontario government under which purchase of some medical devices required by an Ontario resident are subsidized by OHIP.
Basic Dental Covers check-ups, cleaning, x-rays, fillings and extractions. Some basic plans will include endodontic and periodontal coverage. Repair and refurbishing of dentures is also usually included.
Canada Pension Plan (CPP) A plan run by the government of Canada to provide retirement and disability benefits to contributors.
Claims Experience The history of claims and premiums developed by a group over a period of time. The group can be employees of a company or members of an association.
Coordination of Benefits Applied in Health and Dental coverage if there is coverage available under more than one plan.
Cost Plus A self-insuring vehicle using a third party service provider. A cost plus plan can operate in conjunction with an insured plan or on its own. There is no insurance and the expenses processed through the plan are a deductible expense to the employer. A benefit received by the employee is considered an insurance benefit and so is not a taxable benefit.
Critical Illness Insurance is a benefit which will pay a pre-determined lump sum to the insured person if they suffer from one of the illnesses named in the policy.
Definition of Disability is the wording an insurer uses to define the extent to which a person must be disabled to receive benefits.
Dental Fee Guide A schedule of fees posted by most provincial dental associations and is a suggested fee guide for routine services. Some dentists will not charge the current fee guide, while some specialists will charge more than the fee guide because they are specialists.
Direct Offsets Those other potential sources of income during disability which will be directly deducted from the group long-term disability plan. CPP primary benefits are most commonly direct offsets, while secondary CPP benefits are indirect offsets.
Disability – see Weekly Indemnity and Long Term Disability.
Employee Assistance Programs (EAP) Provide coverage for an employee to receive counseling without having to be off work.
Endodontic Treatment at the dentist is root canal therapy. It is covered in Basic Dental by some Plans, and in others it is covered as a Major Restorative service.
Experience-rated benefits Those in which the claims experience of the group will affect the renewal rates at the next plan anniversary. Higher claims will mean an upward rate adjustment, which will also include any Trend Factor applicable.
Extended Health benefits Cover medical expenses incurred by the insured person and their family members as defined in the policy. In Ontario, group insurance plans cannot co-insure with OHIP.
Incurred Claims A figure used by insurers to take into account a reserve they hold for claims which have been incurred but have not yet been reported to the insurer. In the event of termination of the plan, claims incurred during the term of the policy would still be paid even if submitted after the fact.
Indirect Offsets Applied to disability benefits if the disabled person is receiving benefits from more than one source.
Integration of benefits Applicable to disability benefits where a disabled person may be eligible for benefits from more than one source. Integration takes two forms – Direct Offsets and Indirect Offsets.
Life Insurance A benefit which will pay a lump sum to the designated beneficiary of a deceased person who was insured under the policy. Some policies now include a Living Benefit which will pay part of the benefit to an employee prior to death if they are terminally ill.
Long Term Disability Benefit which provides for income replacement in the event of illness or injury. Most commonly, benefits commence after the expiration of benefits under the Employment Insurance plan.
Major restorative dental Covers such services as crowns and bridges, and the initial purchase of dentures.
Non-taxable Disability Benefits are those for which the employee pays the full premium. This can be applied equally to short term and long term disability benefits.
OHIP The Ontario Health Insurance Plan under which all residents of Ontario are covered for doctor and hospital services.
Optional Life Additional life insurance available on an elective basis for employees and, on occasion, their dependents. It is generally available only after providing satisfactory evidence of insurability.
Orthodontic dental Services relate to the straightening of teeth through braces. If a plan covers orthodontic work it will usually be restricted to children under the age of 18. There will be a co-insurance applied, and there is generally a lifetime maximum benefit per person.
Own Occupation The definition of disability most favourable to the insured person. It is generally applicable only to people in professional jobs and is very uncommon in group insurance. A disabled person can continue to receive disability income benefits if they are unable to perform the duties of their own occupation, even if they can perform another occupation for gain or profit.
Paid Claims The total of claims actually paid during a period – generally a policy year.
Pay-direct drug Plan is one in which the employee is given a card with which to purchase prescription drugs. The employee is only required to pay the co-insurance or deductible applicable, and does not have to pay the full cost of the prescription. This plan reduces paperwork for the plan administrator.
Periodontal The name used for treatment of gum disease. This service is frequently included in Basic Dental plans, but sometimes it is included in the Major restorative section of the plan (if applicable).
Plan Administrator The person who has day-to-day responsibility for running the plan at the employer's office.
Pooled benefits Those which are rated purely on the demographics of the group – age, gender and occupation. The number of claims will not usually affect rates, unless there is a consistent history of claims in excess of expectations.
Positive Enrollment A process of listing all eligible dependents for whom claims can be paid. It also allows the insurer to determine the hierarchy of claims submission in the event of Coordination of Benefits.
Prescription vs. Prescribed Drugs are a fine distinction. A prescription drug is one which cannot be dispensed without a prescription from a doctor or dentist. A prescribed drug is one for which a doctor or dentist has written a prescription even though it may be available without one. A group plan which covers prescribed drugs will be more expensive than one which covers on prescription drugs.
Regular Occupation The most common definition of disability in group insurance long-term disability plans. Benefits will be paid for the period stated (usually up to two years) if the insured employee is unable to perform the duties of his regular occupation. After the period of ‘regular occupation' coverage specified in the policy the definition will change to ‘any occupation.'
Self-insurance The taking on of risk by the employer. This is generally applicable to larger groups, or to small groups for topping up an insured plan.
Short Term Disability – see Weekly Indemnity.
Stop Loss An insurance process used in conjunction with self-insurance so claims in excess of a certain amount are taken on by the insurer. The stop loss provision may apply to claims individually or to an aggregate claim amount for the year.
Target Loss Ratio – see Acceptable Loss Ratio
Taxable Disability Benefits Those on which the employer pays ANY of the premium. The rate of contribution does not allow for pro-rating the taxability.
Trend Factor The factor used by insurers to allow for increases in expenses anticipated over the coming policy year. The factor is affected by inflation, the de-listing of services by the provincial health plans, and the introduction of new courses of treatment and new therapies and drugs.
WCB Workers' Compensation Board, the predecessor of the WSIB.
Workplace Safety and Insurance Board (WSIB) The government agency set up to provide on-the-job protection for employees. If a worker is injured on the job benefits are payable to the employee on a non-taxable basis. The cost of this program is borne by employers.
Weekly Indemnity Benefit is a short-term disability benefit payable in the event of illness or injury. Most commonly benefit eligibility commences within two weeks of the date of disability and are benefits payable for a maximum of four or six months.
Yearly Renewable Term (YRT) The phrase which describes the basis on which most group life and disability insurance is issued. Rates are recalculated each year and will change based on the demographics within the group. The claims experience will have an increasing impact on renewal rates as the group gets larger.
|
