A restricted account used to pay for employee insurance costs after retirement. Employer contributions are tax deductible and are limited to 25% of contributions to retirement benefits.
Tag: Audio Generic
501(c)(9) trust
A self-insured group can establish this type of trust to fund its group insurance plan. Contributions to a 501(c)(9) trust, as well as investment gains, are deductible on federal income tax returns. Also called a voluntary employees’ beneficiary association (VEBA) .
72-hour rule / 24-hour rule
Medicare policy that states if a patient receives diagnostic tests and hospital outpatient services within 72 hours of admission to a hospital, then all such tests and services are combined (bundled) with inpatient services only if services are related to the admission. However, unrelated therapeutic service is paid. Also called the 3-day payment window because it is 3 calendar days rather than 72 hours. Sometimes called the 72/24-hour rule.
8 ths Method
Based on the assumption that annual policies are written evenly over each quarter and that risk is spread out evenly over the year, this method is used to estimate the unearned premium reserve. Policies written in the first, second, third, and fourth quarters of each year, for example, are assumed to contribute one-eighth, three-eighths, five-eighths, and seven-eighths of the written premium to the unearned premium reserve at the end of the year, respectively.
A Priori
Describes a situation in which all of the possible outcomes of an event are known ahead of time. For example, when you throw a dice or flip a coin, you know all of the possible outcomes.
A Rates or Judgment Rates
Rates based on what the underwriter believes is best for each risk, rather than on what has happened in the past (losses).
A.M. Best rating
An evaluation published by A.M. Best Company of all life, property, and casualty insurers domiciled in the United States and U.S. branches of foreign property insurer groups active in the United States. The ratings are frequently used to assess insurance companies’ claims-paying ability, suitability, service record, and financial stability. Standard & Poor’s, Conning & Company, Fitch, and Moody’s are some of the other rating agencies.