Ancillary Services - services, other than those provided by a physician or hospital, which are related to a patient's care, such as laboratory work, x rays and anesthesia.
Brand Name Drug - A prescription drug that is protected by a patent, supplied by a single company, and marketed under the manufacturer's brand name.
Calendar Year - the period beginning January 1 of any year through December 31 of the same year.
Case Management - a process whereby a covered person with specific health care needs is identified and a plan that efficiently uses health care resources is designed and implemented to achieve the optimum patient outcome in the most cost-effective manner.
Certificate of Coverage - a document given to an insured that describes the benefits, limitations and exclusions of coverage provided by an insurance company.
Claim - information a medical provider or insured submits to an insurance company to request payment for medical services provided to the insured.
Coinsurance - the portion of covered health care costs for which the covered person has a financial responsibility, usually a fixed percentage. Coinsurance usually applies after the insured meets his/her deductible.
Consolidated Omnibus Budget Reconciliation Act (COBRA) - a federal law that, among other things, requires employers to offer continued health insurance coverage to certain employees and their beneficiaries whose group health insurance has been terminated if they undergo a triggering event.
Consumer-Driven Plans - Describes a wide range of approaches to give a covered person more incentive to control the cost of health care. Significantly higher cost sharing of expenses is assumed and the catastrophic limit is usually higher than those common in other plans. Common features include full or partial employee responsibility for several thousand dollars in expenses, and catastrophic coverage covering costs above a certain level, usually higher than those common in other plans.
Contract Year - the period of time from the effective date of the contract to the expiration date of the contract.
Coordination of Benefits (COB) - a provision in the contract that applies when a person is covered under more than one medical plan. It requires that payment of benefits be coordinated by all plans to eliminate overinsurance or duplication of benefits.
Copayment - a cost-sharing arrangement in which an insured pays a specified charge for a specified service, such as $10 for an office visit. The insured is usually responsible for payment at the time the service is rendered. This charge may be in addition to certain coinsurance and deductible payments.
Covered charges - Services or benefits for which the health plan makes either partial or full payment.
Covered Person - an individual who meets eligibility requirements and for whom premium payments are paid for specified benefits of the contractual agreement.
Deductible - the amount of eligible expenses a covered person must pay each year from his/her own pocket before the plan will make payment for eligible benefits.
Deductible Carry Over Credit - charges applied to the deductible for services during the last 3 months of a calendar year that may be used to satisfy the following year's deductible.
Dependent - a covered person who relies on another person for support or obtains health coverage through a spouse, parent or grandparent who is the covered person under a plan.
Effective Date - the date insurance coverage begins.
Eligible Dependent - a dependent of a covered person (spouse, child, or other dependent) who meets all requirements specified in the contract to qualify for coverage and for whom premium payment is made.
Eligible Expenses - the lower of the reasonable and customary charges or the agreed upon health services fee for health services and supplies covered under a health plan.
Employee Retirement Income Security Act of 1974 (ERISA) - Laws regulating the establishment and administration of employee health and welfare plans. Also imposes reporting and disclosure requirements, including Summary Plan Description (SPD).
Exclusions - specific conditions or circumstances for which the policy will not provide benefits.
Explanation of Benefits (EOB) - the statement sent to an insured by his/her health insurance company listing services provided, amount billed, eligible expenses and payment made by the health insurance company.
Family Medical Leave Act of 1993 (FMLA) - Provides eligible employees with up to 12 work weeks of unpaid leave a year for certain medical or family reasons. Requires group health benefits to be maintained during the leave.
Flexible Spending Account (FSA) - A vehicle to help reduce health care costs and make budgeting easier. Covered persons contribute pre-tax money to the account and then draw on the funds during the plan year for qualified expenses such as doctor's bills, prescriptions, dental care, and vision care. FSA funds cannot be carried over from year to year.
Formulary - A list of both generic and brand name drugs that are preferred by your health plan. Many prescription drugs produce the same results. Health plans choose formulary drugs that are medically safe and cost effective. A team including pharmacists and physicians meet to review the formulary and make changes as necessary.
Generic drug - A prescription that is not protected by a drug patent. A generic medication is basically a copy of the brand name drug. A generic drug may have a different color or shape than its brand name counterpart, but it must have the same active ingredients, strength, and dosage form (i.e., pill, liquid, or injection), and provide the same effectiveness and safety. Generics generally cost less than brand name drugs.
Health Maintenance Organization (HMO) - Prepaid health plans in which you pay a monthly premium and the HMO covers your doctors' visits, hospital stays, emergency care, surgery, preventive care, checkups, lab tests, X-rays, and therapy. You must choose a primary care physician who coordinates all of your care and makes referrals to any specialists you might need. In an HMO, you must use the doctors, hospitals and clinics that participate in your plan's network.
Health Savings Account (HSA) - In combination with a High Deductible Health Plan, the HSA gives covered persons a way to pay for qualified health care expenses and grow their savings for future health care needs. Employees, employers, or both can contribute tax-free money to an HSA.
High Deductible Health Plan (HDHP) - meets with government standards and gives covered persons incentives to manage their benefits wisely. The plan features low premiums and an integrated deductible for both medical and pharmacy costs. When paired with a Health Savings Account (HSA), employees can set aside tax-free money for current-year health expenses and build savings for the future.
Health Insurance Portability and Accountability Act of 1996 (HIPAA) - Limits a group health plan’s ability to impose pre-existing condition exclusions, provides special enrollment rights for eligible persons; prohibits group plans from individual discrimination based on health conditions. Creates national standards for handling individuals’ protected health information.
In-Network - You receive treatment from the doctors, clinics, health centers, hospitals, medical practices, and other providers with whom your plan has an agreement to care for its members. Examples include a Fee-For-Service plan's PPO or a Health Maintenance Organization. Members have fewer out-of-pocket costs when they use in-network
Insured - a person who has obtained health insurance coverage under a health insurance plan.
Lifetime Limit - A cap on the benefits paid under a policy. Many policies have a lifetime limit of $1 million, which means that the insurer agrees to cover up to $1 million in covered services over the life of the policy.
Managed Care - a health care system under which physicians, hospitals, and other health care professionals are organized into a group or 'network' in order to manage the cost, quality and access to health care. Managed care organizations include Health Maintenance Organizations (HMOs).
Medicaid - a joint federal-state health insurance program that is run by the states and covers certain low-income people (especially children and pregnant women), and disabled people.
Medicare - A program under the U.S. Social Security Administration that reimburses hospitals and physicians for medical services provided to qualifying people over age 65 years old.
Medicare Secondary Payer (MSP) - Laws that govern which coverage pays first when a Medicare beneficiary also has coverage through a group health plan. Rules are based on the number of employees, the reason for Medicare eligibility and the work status of the health plan enrollee.
Out-of-Network - You receive treatment from doctors, hospitals, and medical practitioners other than those with whom the plan has an agreement, and pay more to do so. Members in a PPO-only option who receive services outside the PPO network generally pay all charges.
Out-of-Pocket Maximum - the total payments that must be paid by a covered person (i.e., deductibles and coinsurance) as defined by the contract. Once this limit is reached, covered health services are paid at 100% for health services received during the rest of that calendar year.
Participating Provider - a medical provider who has been contracted to render medical services or supplies to insureds at a pre-negotiated fee. Providers include hospitals, physicians and other medical facilities.
Point of Service (POS) - Type of managed care plan combining features of health maintenance organizations (HMOs) and preferred provider organizations (PPOs), in which individuals decide whether to go to a network provider and pay a flat dollar co-payment (say $10 for a doctor's visit), or to an out-of-network provider and pay a deductible and/or a coinsurance charge.
Portability - The ability for an individual to transfer from one health insurer to another health insurer with regard to pre-existing conditions or other risk factors.
Preferred Provider Organization (PPO) - a health care delivery arrangement that offers insureds access to participating providers at reduced costs. PPOs provide insureds incentives, such as lower deductibles and copayments, to use providers in the network. Network providers agree to negotiated fees in exchange for their preferred provider status.
Pre-authorization - a cost containment feature of many group medical policies whereby the insured must contact the insurer prior to a hospitalization or surgery and receive authorization for the service.
Pre-existing Condition - a health problem that existed before the date your insurance became effective. Many insurance plans will not cover preexisting conditions. Some will cover them only after a waiting period.
Premium - the amount you or your employer pays in exchange for insurance coverage.
Provider - a physician, hospital, health professional and other entity or institutional health care provider that provides a health care service.
Primary Care Physician (PCP) - a physician who is responsible for providing, prescribing, authorizing and coordinating all medical care and treatment.
Reasonable and Customary (R &C) - a term used to refer to the commonly charged or prevailing fees for health services within a geographic area. A fee is generally considered to be reasonable if it falls within the parameters of the average or commonly charged fee for the particular service within that specific community.
Underwriting - the act of reviewing and evaluating prospective insureds for risk assessment and appropriate premium.
Usual and Customary Care - the amount a health plan will recognize for payment for a particular medical procedure. It is typically based on what is considered "reasonable" for that procedure in your service area.
Utilization Rate - a cost control mechanism by which the appropriateness, necessity, and quality of health care services are monitored by both insurers and employers.