Health Insurance Glossary

Annual Premium: The premium is the total amount billed by the insurance company for all employees listed under plan.

Benefit: Amount payable by the insurance company to a claimant, assignee, or beneficiary when the insured suffers a loss.

Carrier: The insurance company offering a health plan.

Chiropractic: The physical manipulation of the skeletal- muscular system of the body. The adjustment of the spinal column rehabilitates normal nervous system functioning and promotes the body's natural healing capability. Benefits typically include diagnosis and related services and are limited to a specific number of visits and treatment per day and per calendar year.

Claim: A request by an individual (or his or her provider) to an individual's insurance company for the insurance company to pay for services obtained from a health care professional.

Co-Insurance: Co-insurance refers to money that an individual is required to pay for services, after a deductible has been paid. In some health care plans, co-insurance is called "co-payment." Co-insurance is often specified by a percentage. For example, the employer or insurance company pays 80 percent and the employee pays 20 percent toward the charges for a service rendered.

Co-Pay: Co-payment is a predetermined (flat) fee that an individual pays for health care services, in addition to what the insurance covers. For example, some HMOs require a $10 "co-payment" for each office visit, regardless of the type or level of services provided during the visit. Co-payments are not usually specified by percentages.

Deductible: The amount an individual must pay for health care expenses before insurance (or a self-insured company) covers the costs. Often, insurance plans are based on yearly deductible amounts.

Dental (1): Preventive Services: Oral Evaluation, Routine Dental Cleanings, Fluoride Treatments, Sealants, Space Maintainer, Harmful Habit Appliance, Bitewing X-Rays.

Dental (2): Basic Services: Complete Series of X-Rays , New Fillings, Replacement Fillings, Simple Extractions, Certain Lab Tests, Pain Treatment, Therapeutic Drug Injections

Dental (3): Major Dental Services: Endodontics, Root Canal Therapy, Complex Oral Surgery, General Anesthesia, Minor Gum Disease Treatment, Provisional Splinting, Occlusal Adjustments, Scaling, Root Planing, Periodontal Maintenance, Major Gum Treatments, Gingivectomy, Osseous Surgery, Inlays, Onlays, Crowns, Fixed Partial Dentures, Partial and Complete Dentures and other major procedures.

EE: Employee Only

EE + Sp: Employee plus Spouse Only. Eligible dependent includes your lawful spouse (or common-law spouse) as defined by applicable state law.

EE + Ch: Employee plus and/or unmarried children (whether natural, adopted or step) of an insured.

EE + Fa: Employee plus Spouse and/or unmarried children (whether natural, adopted or step) of an insured.

Effective Date: The date your insurance is to actually begin. You are not covered until the policies effective date.

Emergency: Means services delivered by an emergency care facility which are necessary to screen and stabilize a covered person. The plan must cover this care if a prudent lay person having average knowledge of health services and medicine and acting reasonable would have believed that an emergency medical condition or life or limb threatening emergency existed.

HMO: Health Maintenance Organization is a type of managed care plan that typically works in the following manner: The HMO consists of a network of health care providers, which means these providers receive set monthly payments for each plan member (such as your employees), regardless of how frequently their services are used. Employees are required to choose a Primary Care Physician (PCP) to perform many of their health care services and refer them to specialists when necessary. They are only referred to specialists within the HMO's network, except in special circumstances. Employees are typically only responsible for a small co-payment for visits to their PCP or specialists to whom they've been referred. In most cases, no deductible is required. If employee visits another physician without a referral from their PCP, they won't receive any coverage, except in certain emergencies.

Hospital: Benefits for inpatient hospital stays, typically include: Any service or supply you receive during your inpatient stay; and Room and board expenses, up to the semiprivate room (a room with two or more beds) rate. Some plans cover private rooms as well.

HRA: Health Reimbursement Arrangement. Plan design options are virtually limitless. An employer may allow all IRS allowable expenses to be paid through the plan or they may limit or restrict what expenses are allowed; fund the HRA from day one of the plan year or they may fund it on a pay period basis or monthly basis; allow or not allow a roll over at the end of the plan year, however, this is one of the most attractive benefits of an HRA. The employer may cap the maximum accumulation of funds. Primarily, there are 3 primary mandatory elements. 1) The employer sets limits and has full control of this plan. Employer is responsible for funding and no employee funding is allowed. 2) Only income tax deductible medical expenses may be paid from HRA funds. 3) No withdrawals for any purpose other than qualified medical reimbursement expenses. Employers benefit by reducing healthcare insurance costs and restructuring health benefits outside their group health insurance premiums. Benefits to employees include: Protection against catastrophic medical costs, a method for paying first dollar health care expenses and full carry over of unused funds to future plan periods.

HSA: Health Savings Accounts combine high-deductible health insurance with a tax-favored savings account. HSAs are a new way for people to use pre-tax money in the short and long term as they save for their health care expenses. This makes them like a traditional IRA for healthcare, but much better. Once you have an HSA-qualified health insurance plan, and have opened a Health Savings Account you can make yearly pre-tax contributions of up to 100 percent of your health plan's deductible. When you need to pay for a medical expense, use money from your HSA to pay for it. HSA funds can be used to pay for deductibles, co-payments, coinsurance, and other qualified medical expenses not covered by your health insurance plan. But in general, an HSA cannot be used to pay for health insurance premiums if you are under age 65.

Indemnity: Indemnity health insurance plans are also called "fee-for-service." These are the types of plans that primarily existed before the rise of HMOs, POSs, and PPOs. With indemnity plans, the individual pays a pre-determined percentage of the cost of health care services, and the insurance company (or self-insured employer) pays the other percentage. For example, an individual might pay 20 percent for services and the insurance company pays 80 percent. The fees for services are defined by the providers and vary from physician to physician. Indemnity health plans offer individuals the freedom to choose their health care professionals.

In-network: Providers or health care facilities which are part of a health plan's network of providers with which it has negotiated a discount. Insured individuals usually pay less when using an in-network provider, because those networks provide services at lower cost to the insurance companies with which they have contracts.

Laboratory/x-ray: This typically covers laboratory, X-ray, nuclear medicine, or other appropriate diagnostic services.

Lifetime: the maximum amount a health plan will pay in benefits to an insured individual during that individual's lifetime.

Limitations: a limit on the amount of benefits paid out for a particular covered expense, as disclosed on the Certificate of Insurance.

Long-term Disability Insurance: Pays an insured a percentage of their monthly earnings if they become disabled.

LOS: Length of stay is a term used by insurance companies, case managers and/or employers to describe the amount of time an individual stays in a hospital or in-patient facility.

Managed Care: A medical delivery system that attempts to manage the quality and cost of medical services that individuals receive. Most managed care systems offer HMOs and PPOs that individuals are encouraged to use for their health care services. Some managed care plans attempt to improve health quality, by emphasizing prevention of disease.

Maximum Dollar Limit: The maximum amount of money that an insurance company (or self-insured company) will pay for claims within a specific time period. Maximum dollar limits vary greatly. They may be based on or specified in terms of types of illnesses or types of services. Sometimes they are specified in terms of lifetime, sometimes for a year.

MRI/Cat: This typically covers MRI, CAT Scan, Endoscopy, echocardiography, gastroscopy, colonoscopy & cystoscopy.

Out-of-Network: This phrase usually refers to physicians, hospitals or other health care providers who are considered nonparticipants in an insurance plan (usually an HMO or PPO). Depending on an individual's health insurance plan, expenses incurred by services provided by out-of-plan health professionals may not be covered, or covered only in part by an individual's insurance company.

Out-of-Pocket: A predetermined limited amount of money that an individual must pay out of their own savings, before an insurance company or (self-insured employer) will pay 100 percent for an individual's health care expenses.

Outpatient: An individual (patient) who receives health care services (such as surgery) on an outpatient basis, meaning they do not stay overnight in a hospital or inpatient facility. Many insurance companies have identified a list of tests and procedures (including surgery) that will not be covered (paid for) unless they are performed on an outpatient basis. The term outpatient is also used synonymously with ambulatory to describe health care facilities where procedures are performed.

PCD: Primary Care Dentist is a dental care professional (usually a dentist) who is responsible for monitoring an individual's overall dental care needs. Typically, a PCD serves as a "quarterback" for an individual's dental care.

PCP: Primary Care Provider is a health care professional (usually a physician) who is responsible for monitoring an individual's overall health care needs. Typically, a PCP serves as a "quarterback" for an individual's medical care, referring the individual to more specialized physicians for specialist care.

Plan Administration: Supervising the details and routine activities of installing and running a health plan, such as answering questions, enrolling individuals, billing and collecting premiums, and similar duties.

POS: Point of Service plans have similar rules to HMOs, though they tend to be more flexible in offering referrals outside of the network and providing some coverage for self-referrals. Thus, if your employees visit their Primary Care Provider (PCP) and receive referrals to specialists when necessary, their costs and coverage are likely to be similar to an HMO. However, if they refer themselves to a specialist or doctor outside of the plan's network, they may need to pay a deductible and coinsurance (a portion of the medical fees).

PPO: Preferred Provider Organizations typically consist of a network of providers that have agreed to provide services to plan members at discounted rates. These are generally considered the most flexible managed care plans because they usually don't require members to choose a Primary Care Physician (PCP). This means your employees receive the same coverage for any provider within the network, including specialists. They can also choose a provider outside of the network and receive coverage, though the out-out-pocket expenses will likely be higher.

Pre-existing Conditions: A medical condition that is excluded from coverage by an insurance company, because the condition was believed to exist prior to the individual obtaining a policy from the particular insurance company.

Provider: Provider is a term used for health professionals who provide health care services. Sometimes, the term refers only to physicians. Often, however, the term also refers to other health care professionals such as hospitals, nurse practitioners, chiropractors, physical therapists, and others offering specialized health care services.

Rates: Large group health insurance is medically underwritten at the time of purchase, with rates based on employee participation and prior claims experience. In a large group employment situation, employees are not generally asked to fill out a medical questionnaire prior to obtaining coverage. The health insurance company bases annual premium changes for large employer groups primarily on the claims experience of the group in past years, as well as any overall increases in the cost of providing health insurance coverage. An example of such costs would be changes in laws that may impact operating expenses.

Reasonable and Customary Fees: The average fee charged by a particular type of health care practitioner within a geographic area. The term is often used by medical plans as the amount of money they will approve for a specific test or procedure. If the fees are higher than the approved amount, the individual receiving the service is responsible for paying the difference. Sometimes, however, if an individual questions his or her physician about the fee, the provider will reduce the charge to the amount that the insurance company has defined as reasonable and customary.

Routine Vision: Typically this covers refractive eye examinations and are limited to one every 24 months from a medical physician.

RX: Prescription drug products for outpatient use that are filled by a prescription order or refill. Self-injectable medications. Non-injectable medications given in a Physician's office except as required in an Emergency.

RX Drugs (Brand-name): Prescription drugs marketed with a specific brand name by the company that manufactures it, usually the company which develops and patents it. When patents run out, generic versions of many popular drugs are marketed at lower cost by other companies. Check your insurance plan to see if coverage differs between name-brand and their generic twins. This typically represents the first section in the RX benefits xx/xx/xx.

RX Drugs (Generic): A "twin" to a "brand name drug" once the brand name company's patent has run out and other drug companies are allowed to sell a duplicate of the original. Generic drugs are cheaper, and most prescription and health plans reward clients for choosing generics. This typically represents the second section in the RX benefits xx/xx/xx.

RX Drugs (Specialty): Our extensive database and information systems allow us to design pharmacy benefits that engage consumers in making more educated decisions. This approach allows us to create the appropriate tier placement of drugs on our Prescription Drug List that better aligns the employee's costs with the health care value of a particular drug choice. Check your plan for details listed within the specialty drug category. This typically represents the third section in the RX benefits xx/xx/xx.

Underwriter: The company that assumes responsibility for the risk, issues insurance policies and receives premiums.

Waiting Period: A period of time when you are not covered by insurance for a particular problem.