Health Insurance Glossary

Additional Insured: Anyone covered under your health plan that is not named as “insured” in your documentation from the insurance company.

Balance Billing: When doctors or hospitals bill patients directly for care above what the insurer pays, it is known as “balance billing”. Balance billing is most common when services are provided by out-of-network providers, and is not allowed under Medicare. The billed amounts may not count toward the patients' out-of-pocket maximum.

Benefit: The dollar amount your insurance carrier will pay when you file a claim for a covered loss.

Benefit Period: The interval during which you will be eligible for benefits. Generally, your benefit period will begin with the first medical service you received for a specific illness and end after you have not been treated for that condition for 60 days.

Carrier: The insurance company you receive your health plan from.

Certificate of Insurance: This is the printed description of your benefits and coverage limits that forms a contract between you and your carrier. It details exactly what will be covered, what won’t, and the dollar maximums

Claim: This refers to any request to your insurance company for benefits.

COBRA: This acronym refers to the Consolidated Omnibus Budget Reconciliation Act of 1985. The law requires group medical plans covering twenty employees or more to offer participants the option to receive continued healthcare benefits for up to eighteen months after the cancellation of their group plan.

Coinsurance: The amount you will be required to pay for a particular medical expense. Coinsurance is measured as a percentage of the total medical bill.

Co-payment: This is a cost-sharing arrangement in which you will be responsible for a specific charge for a specific medical service ($20.00 per office visit, or $10.00 per generic prescription).

Covered Expenses: The various medical procedures that your insurer has agreed to provide you coverage for.

Deductible: The amount you’ll be required to pay for healthcare expenses before your insurance plan will begin to reimburse you.

Exclusion: A specific circumstance or condition that is not covered by your policy.

Effective Date: This refers to the date on which your insurance coverage will actually begin to cover you.

Explanation of benefits (EOB): The description of benefits and services that is sent to a patient who has requested payment from a health benefits plan.

Fee-for-Service: This is a payment system for healthcare where your provider is paid for each service after it is performed. You receive reimbursement after you file a claim.

HIPPA:  The Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy and Security Rules.  The HIPAA Privacy Rule provides federal protections for personal health information held by covered entities and gives patients an array of rights with respect to that information. At the same time, the Privacy Rule is balanced so that it permits the disclosure of personal health information needed for patient care and other important purposes.

HMO: Health Maintenance Organization. HMO’s are popular health benefit programs in which you’ll pay monthly premiums in return for managed coverage for your checkups, hospital stays, doctors' visits, surgery, emergency care, preventive care, lab tests, and X-rays. If you join an HMO, you will have to select what’s called a “Primary Care Physician” who will be responsible for coordinating your healthcare and making any referrals to specialists that you require. You’ll also have to use doctors, hospitals and clinics who are members of your HMO plan's network.

HRA:  (Health Reimbursement Account)  Employer-funded plans that reimburse employees for incurred medical expenses that are not covered by the company's standard insurance plan. Because the employer funds the plan, any distributions are considered tax deductible (to the employer). Reimbursement dollars received by the employee are generally tax free. HSA:  (Heatlh Savings Account) An account created for individuals who are covered under high-deductible health plans (HDHPs) to save for medical expenses that HDHPs do not cover. Contributions are made into the account by the individual or the individual's employer and are limited to a maximum amount each year. The contributions are invested over time and can be used to pay for qualified medical expenses, which include most medical care such as dental, vision and over-the-counter drugs.

FSA:  (Flexible Spending Arrangement (FSA), or Flexible Spending Account, as they are commonly called, is one of a number of tax-advantaged financial accounts that can be set up through a cafeteria plan of an employer. An FSA allows an employee to set aside a portion of his or her earnings to pay for qualified expenses as established in the cafeteria plan, most commonly for medical expenses but often for dependent care or other expenses. Money deducted from an employee's pay into an FSA is not subject to payroll taxes </wiki/Payroll_tax>, resulting in a substantial payroll tax savings.

In-network: Healthcare facilities or providers who are members of your health plan.

Lifetime Limit: This refers to the cap (or maximum level) on benefits available through a policy.

LOS: This is an acronym for the term “length of stay”. It’s used by insurance carriers, case managers, and other healthcare professionals to describe the length of time any individual spends in a hospital or an in-patient care facility.

Maximum Out-of-Pocket Expenses: The most you will have to pay during one year - in the form of deductibles and coinsurance fees.

Managed Care: This term refers to an increasingly broad assortment of health plans that manage healthcare costs and usage. There are three major types of managed health plans: HMOs (Health Maintenance Organizations), PPOs (Preferred Provider Organizations) and POS (Point-Of-Service plans).

Medicaid: This is a joint state/federal health insurance program that is administered by the state. It provides health coverage for low-income individuals, especially pregnant women, children and the disabled.

Medicare: This is a federally-sponsored healthcare program that offers coverage for medical and hospital care primarily to those over the age of 65.

Network: This refers to the groups of doctors, hospitals and other medical professionals who have been contracted to provide discounted healthcare services to your insurance carrier’s customers.

Open enrollment period: A period during which all employees are free to change their benefits choices.

Out-of-Network: This term typically refers to any doctors, hospitals or other healthcare providers considered to be non-participants by your insurance plan (HMO, POS, or PPO). Depending on your plan’s guidelines, services provided by out-of-plan providers may not be covered, or only covered in part.

POS: Point-of-Service Plan. A POS is a managed healthcare plan that combines the features of a Health Maintenance Organization and a Preferred Provider Organization. These plans allow you to decide whether or not you’ll use an in-network provider or an out-of-network provider.

Pre-existing Conditions: This refers to any healthcare issues you had prior to your insurance plan’s effective date. Many policies will refuse to cover pre-existing conditions, while others do so only for a short time.

PPO: Preferred Provider Organization. PPOs are networks of healthcare providers who have negotiated discount contracts with health insurance carriers. Your healthcare provider decisions will be up to you, but there are generally financial incentives for you to select providers within your PPO network.

Preventative Care: Health services that focus solely on preventative care measures such as physical exams, immunizations, diagnostic tests and mammograms.

Premium: The dollar amount you’ll pay on a monthly basis in exchange for your insurance coverage.

Primary Care Physician: Most HMOs and POS plans will require you to select one family physician, pediatrician or internist to monitor your health, treat most of your health problems, and refer you to specialists when necessary.

Provider: This term refers to any individual (nurse, physician, or specialist) or institution (clinic, hospital, or laboratory) that provides you with care.

Rider: This refers to any policy attachment that makes additions or changes to your original insurance plan.

Short Term Health Insurance: This type of healthcare plan is purchased to provide you with benefits during coverage gaps between jobs, after a move, or while you’re traveling overseas.

Small Business Health Insurance: This is a type of healthcare coverage that is available to businesses employing between two and fifty employees. It offers discounted premiums to employees and tax advantages to small business owners; also in most cases, the coverage cannot be denied.

Travel Health Insurance: This insurance is purchased to provide you with coverage when you’re traveling abroad.

Voluntary benefits: A contributory benefit plan in which employees cover all costs and the employer acts only as an agent of the employees to organize and administer the plan.

Waiting Period: This refers to a pre-specified time period during which you will not be covered by your insurance (for a particular healthcare issue).