|
This glossary will assist you in better understanding insurance and the
enrollment process.
actuary
- a mathematician in the insurance
field. Responsible for calculating premiums, developing plans and defining
underwriting risk.
agent
- a licensed individual who represents several insurance companies and
sells their products.
benefit
- reimbursement for covered
medical expenses as specified by the plan.
brand-name drug
- prescription drug which is marketed with a specific brand name by the
company that manufactures it. May cost insured individuals a higher co-pay
than generic drugs on some health plans. (see "generic.")
broker
- a licensed insurance
professional who obtains multiple quotes and plan information in the
interest of his client.
carrier
- insurance company or HMO
insuring the health plan.
certificate booklet
- the plan agreement. A printed description of the benefits and coverage
provisions intended to explain the contractual arrangement between the
carrier and the insured group or individual. May also be referred to as a
policy booklet
claim
- a formal request made by an
insured person for the benefits provided by a policy.
COBRA (Consolidated Omnibus Budget Reconciliation Act) - Federal
legislation that requires group health plans to provide health plan
members the opportunity to purchase continued coverage in the event their
insurance is terminated. Applies only to employer groups with 20 or more
employees.
co-insurance
- the percentage of covered expenses an insured individual shares with the
carrier. (i.e., for an 80/20 plan, the health plan member's co-insurance
is 20%.) If applicable, co-insurance applies after the insured pays the
deductible and is only required up to the plan's stop loss amount. (see
"stop loss.")
co-pay/co-payment
- the amount an insured
individual must pay toward the cost of a particular benefit. For example,
a plan might require a $10 co-pay for each doctor's office visit.
credit for prior coverage
- any pre-existing condition
waiting period met under an employer's prior (qualifying) coverage will be
credited to the current plan, if any interruption of coverage between the
new and prior plans meets state guidelines.
deductible
- the dollar amount an insured
individual must pay for covered expenses during a calendar year before the
plan begins paying co-insurance benefits.
dependents
- usually the spouse and unmarried children (adopted, step or natural) of
an employee.
effective date
- the date requested by an employer for insurance coverage to begin.
exclusions
- expenses which are not covered under an insurance plan. These are listed
in the Certificate Booklet.
Explanation of Benefits (EOB)
- a carrier's written response to
a claim for benefits. Sometimes accompanied by a benefits check.
Generic drug
the chemical equivalent to a "brand name drug." These drugs cost less,
and the savings is passed onto health plan members in the form of a lower
co-pay.
group insurance
- an insurance contract made with an employer or other entity that covers
individuals in the group.
Health Maintenance
Organization (HMO) - An
alternative to commercial insurance that stresses preventive care, early
diagnosis and treatment on an outpatient basis. HMOs are licensed by the
state to provide care for enrollees by contracting with specific health
care providers to provide specified benefits. Many HMOs require enrollees
to see a particular primary care physician (PCP) who will refer them to a
specialist if deemed necessary.
HIPAA
- Health Insurance Portability and Accountability Act of 1996, P.L.
104-91. This law relates to underwriting, pre-existing limitations,
guaranteed renewal, COBRA and certification requirements in the event
someone terminates from the plan. The new law, commonly known as the
"Kennedy-Kassebaum Bill," establishes new requirements for self-funded,
fully-insured group plans (including church plans) and Individual Health
policies.
The purpose of the law
is to:
Improve portability and continuity of
health insurance coverage in the group and individual markets
To combat waste, fraud and abuse in health insurance and health care
delivery
To promote the use of medical savings accounts
To improve access to long-term care services and coverage
To simplify the administration of health insurance
Learn more about HIPAA at the Department of Labor's website. - Please note
this may take a few minutes to appear.
pre-certification
- an insurance company requirement that an insured obtain pre-approval
before being admitted to a hospital or receiving certain kinds of
treatment.
ID card/identification card
- card given to insured individuals which advises medical providers that a
patient is covered by a particular health insurance plan.
indemnity insurance plans
- traditional insurance plans (not HMOs or PPOs) which permit insured
individuals to choose their doctors and hospitals. Insured individuals do
not have to choose doctors or hospitals from a specific list of providers.
Also called "fee-for-service" plans.
in-network
- describes a provider or health
care facility which is part of a health plan's network. When applicable,
insured individuals usually pay less when using an in-network provider.
lifetime maximum benefit
- the maximum amount a health plan will pay in benefits to an insured
individual.
limitations
- a restriction on the amount of
benefits paid out for a particular covered expense.
long-term disability (LTD)
- insurance which pays employees a percentage of monthly earnings in the
event of disability.
managed care
- the coordination of health care services in the attempt to produce high
quality health care for the lowest possible cost. Examples are the use of
primary care physicians as gatekeepers in HMO plans and pre-certification
of care.
Multiple Employer Trust (MET)
- an arrangement created to obtain health and other benefits for
participating employer groups. Small employers can pool their
contributions to receive the advantages of large group underwriting.
network
- a group of doctors, hospitals and other providers contracted to provide
services to insured individuals for less than their usual fees. Provider
networks can cover large geographic markets and/or a wide range of health
care services. If a health plan uses a preferred provider network, insured
individuals typically pay less for using a network provider.
out-of-network
- describes a provider or health
care facility which is not part of a health plan's network. Insured
individuals usually pay more when using an out-of-network provider, if the
plan uses a network.
out-of-pocket maximum
- the total of an insured individual's co-insurance payments and
co-payments.
plan administration
- overseeing the details and routine activities of installing and running
a health plan, such as answering questions, enrolling new individuals for
coverage, billing and collecting premiums, etc.
point-of-service (POS)
- health plan which allows the enrollee to choose HMO, PPO or indemnity
coverage at the point of service (time the services are received).
pre-certification
- Pre-admission review and approval of appropriateness and medical
necessity of hospitalization or other medical treatment.
pre-existing condition
- an illness, injury or condition for
which the insured individual received medical advice, treatment, services
or supplies; had diagnostic tests done or recommended; had medicines
prescribed or recommended; or had symptoms of typically within 12 months
(time periods may vary depending on state laws) prior to the effective
date of insurance coverage.
Preferred Provider
Organization (PPO)
- A network or panel of physicians and
hospitals that agrees to discount its normal fees in exchange for a high
volume of patients. The insured individual can choose from among the
physicians on the panel.
premiums
- payments to an insurance
company providing coverage.
provider
- any person or entity providing
health care services, including hospitals, physicians, home health
agencies and nursing homes. Usually licensed by the state.
referral
within many managed care plans, transfer to specialty physician or
specialty care by a primary care physician.
rider
- a modification to a Certificate of Insurance regarding clauses and
provisions of a policy. A rider usually adds or excludes coverage.
risk
- uncertainty of financial loss.
short-term medical
- temporary health coverage for
an individual for a short period of time, usually from 30 days to six
months.
small employer group
- groups with 1 99 employees. The definition of small employer group may
vary between states.
state mandated benefits
- state laws requiring that commercial health insurance plans include
specific benefits.
stop-loss
- the dollar amount of claims filed for eligible expenses at which the
insurance begins to pay at 100% per insured individual. Stop-loss is
reached when an insured individual has paid the deductible and reached the
out-of-pocket maximum amount of co-insurance.
Third Party Administrator (TPA)
- An organization responsible for
marketing and administering small group and individual health plans. This
includes collecting premiums, paying claims, providing administrative
services and promoting products.
underwriter
- entity that assumes responsibility for the risk, issues insurance
policies and receives premiums.
waiver of coverage
- a section on the enrollment form which states that an employee was
offered insurance coverage but opted to waive this coverage.
Worker's Compensation
Insurance - insurance coverage
for work-related illness and injury. All states require employers to carry
this insurance
|
