Glossary of Health Insurance Terms

Purchasing Health Insurance can be stressful enough without trying to decipher the language that goes along with it. In this glossary, we have taken the liberty to define some of the most common terms that you will come across during your search for coverage. The easiest way to save money and still get the best coverage is to educate yourself!

 

[expand title=”Brand Name Description Drugs”]

Medication that is sold by a drug company under a specific or trademarked name and that is protected by a patent. These can be obtained over the counter or by prescription. Not to be confused with Over-the-Counter or Generic Drugs.

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[expand title=”Bronze Health Plan”]

One of four “metal” levels of insurance available at the government marketplace. When taken together with all other bronze plans sold by one insurance company, it will pay, on average, at least 60{bcdee29d8ece072d76c660bfa283f395bc73ff9272f7bb81f739f49cdd20ae0b} of the cost of services.

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[expand title=”Cobra”]

COBRA coverage generally refers to group insurance which is available to a former employee and dependents based on certain life events. It is intended to provide temporary coverage between employment. Individuals on COBRA pay 100{bcdee29d8ece072d76c660bfa283f395bc73ff9272f7bb81f739f49cdd20ae0b} of the premium and could pay a small administrative fee on top of that.

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[expand title=”Catastrophic Health Plan”]

A plan in which the individual generally pays most of the first dollar cost of medical and hospital services up to a certain amount, usually in excess of $1,200 – but oftentimes much higher. In exchange, the individual pays lower premiums than for insurance that relies on small copays. These plans are designed to pay major medical and hospital expenses, but still cover a wide variety of preventive care services at 100{bcdee29d8ece072d76c660bfa283f395bc73ff9272f7bb81f739f49cdd20ae0b}. These plans are only available to people under 30 or people that have a “hardship exemption” because they cannot afford other plans.

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[expand title=”Coinsurance”]

The amount that you owe on a covered health care service that you share with your provider. It is usually listed as a percentage such as 20{bcdee29d8ece072d76c660bfa283f395bc73ff9272f7bb81f739f49cdd20ae0b} and the money goes towards your deductible.

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[expand title=”Copayment”]

The amount of money that you would owe on a covered service usually paid at the time that the service is rendered. It is a fixed amount but the price can vary depending on your policy’s specifics.

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[expand title=”Cost Sharing”]

An all encompassing term that includes all payments that come our of your pocket excluding premiums and the cost of non covered services. Included are deductibles, coinsurance, and copayments or similar charges.

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[expand title=”Creditable Coverage”]

Health insurance that falls under the following categories: Group insurance, individual insurance, Student health insurance, Medicare, Medicaid, CHAMPUS and TRICARE, Federal Employees Health Benefits Program, Indian Health Service, The Peace Corps, Public Health Plan, Children’s Health Insurance Program, or a State Health Insurance High Risk Pool. If you have previous Creditable Coverage it will reduce your pre existing condition exclusionary period under new job based coverage.

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[expand title=”Deductible”]

This is the amount of money that you will pay until your insurance begins to pay. If your deductible is $1,500 you will pay for all services that you receive until the total amount reaches $1,500 after which your insurance plan will begin to pay. The money that you pay out-of-pocket for covered services is first paid against your deductible.

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[expand title=”Dependent”]

A child or other person that can be claimed by a parent or guardian for a personal tax exemption tax deduction.

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[expand title=”Drug List”]

Also known as a Formulary. A list of prescription drugs that are covered by your insurance that has a prescription drug plan.

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[expand title=”Essential Health Benefits”]

These are medical, hospital, and other services that are required by the Affordable Care Act to be covered by all health insurance plans starting in 2014.

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[expand title=”Excluded Services”]

These are services that your insurance will not pay.

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[expand title=”Formulary”]

Also known as Drug List. It is a list of prescription medications that is covered by your insurance or drug plan.

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[expand title=”Generic Drugs”]

A prescription drug that has lost its patent protection. A generic has the same chemical make-up and active ingredient as a Brand Name Drug it is replacing. Generic drugs cost less than Brand Name Drugs and must be approved by the Food & Drug Administration (FDA).

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[expand title=”Gold Health Plan”]

One of four “metal” levels of insurance available at the government marketplace. When taken together with all other gold plans sold by one insurance company, it will pay, on average, at least 80{bcdee29d8ece072d76c660bfa283f395bc73ff9272f7bb81f739f49cdd20ae0b} of the cost of services.

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[expand title=”Grandfathered Health Plan”]

Health Plans that are exempt from the regulations put in place by the Affordable Care Act because they were created before March 23, 2010. A plan may lose its Grandfathered status by making significant changes to its benefits or costs.

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[expand title=”Group Health Plan”]

A health plan offered by an employer to all employees and their families

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[expand title=”Health Maintenance Organization (HMO)”]

A health insurance plan that typically limits medical services to doctors, clinics, and hospitals that work or are contracted with the HMO. HMOs generally only cover services offered within its own organization and do not cover services offered outside of the HMO, except in an emergency. HMOs sometimes have geographic requirements to participate.

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[expand title=”Health Savings Account”]

A savings account with a single purpose – to allow accumulation of non-taxable money for the purpose of paying certain medical costs (the law specifies which of these are eligible). To qualify for an HSA, the individual must purchase an HSA-qualified health plan, a High Deductible Health Plan.

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[expand title=”High Deductible Health Plan (HDHP)”]

A plan that requires an individual to pay the majority of the first dollar cost of medical expenses up to a certain amount. It is called a High Deductible Health Plan because the deductible is quite large – $2,500. $5,000 or more. If it meets certain requirements, it could be paired with an HSA or a reimbursement arrangement to help pay for qualified medical expenses with tax exempt dollars.

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[expand title=”In-Network Providers”]

The list of medical providers that have signed a contract with health plan to provide services to members of a health plan.

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[expand title=”In-Network Coinsurance”]

Refers to the percent that you pay on a covered medical expense to medical providers listed in the health plans network. In-Network costs are generally lower than Out-of-Network costs.

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[expand title=”In-Network Copayment”]

Refers to the fixed amount of money that you would pay for an office visit to a provider listed in the health plans network. In-Network costs are generally lower than Out-of-Network costs.

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[expand title=”Individual Health Insurance Policy”]

A health insurance policy purchased and paid for by an individual, and may include dependents as well. Generally, an insurance policy not provided by an employer through a group plan.

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[expand title=”Minimum Essential Coverage”]

The amount and type of health insurance coverage a person is required to have under the new Affordable Care Act in order to avoid penalties.

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[expand title=”Network”]

Service providers, doctors, and facilities which have signed a contract with your health insurance company under a specific health plan.

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[expand title=”Open Enrollment Period”]

The period of time in which a qualified individual can enroll in or renew a health plan. Except for a restricted list of life events, an individual may not enroll in a health plan outside of the open enrollment period. For 2015 coverage, the open enrollment period runs from November 15, 2014 to February 15, 2015.

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[expand title=”Open Enrollment Period”]

The period of time in which a qualified individual can enroll in or renew a health plan. Except for a restricted list of life events, an individual may not enroll in a health plan outside of the open enrollment period. For 2015 coverage, the open enrollment period runs from November 15, 2014 to February 15, 2015.

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[expand title=Out-of-Network Coinsurance]

The percentage of the cost of medical care for which you are responsible, for services you have received outside of your provider network. Out-of-Network costs are typically higher than In-Network costs.

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[expand title=”Out-Network-Copayment”]

A fixed cost that you pay for medical services that you receive outside of your provider network. Out-of-Network costs are typically higher than In-Network costs.

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[expand title=”Out-of-Pocket Costs”]

Any payments you make for medical care that are not reimbursed by insurance such as copays, deductibles, and uncovered expenses. This is your share of the medical bills you accumulate.

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[expand title=”Out-of-Pocket maximum/limit”]

The absolute most that you will be required to pay out-of-pocket for services in a year. Once you reach this maximum, your insurance will pay 100{bcdee29d8ece072d76c660bfa283f395bc73ff9272f7bb81f739f49cdd20ae0b} of covered expenses.

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[expand title=”penalty”]

This tax penalty is applied by the Internal Revenue Service to an individual who fails to enroll in a health plan with Minimum Essential Coverage. Beginning in 2014, the penalty will be the greater of 1{bcdee29d8ece072d76c660bfa283f395bc73ff9272f7bb81f739f49cdd20ae0b} of annual income or $95.

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[expand title=”Plan Year”]

The 12 months covered under an employer’s group health insurance. It may or may not be based on a calendar year.

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[expand title=”Platinum Health Plan”]

One of the four “metal” levels of insurance available at the government marketplace. When taken together with all the other platinum plans sold by one insurance company, it will pay, on average, at least 90{bcdee29d8ece072d76c660bfa283f395bc73ff9272f7bb81f739f49cdd20ae0b} of the cost of services.

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[expand title=”Pre-Existing Condition”]

An individual’s medical condition or state that existed before the effective date of an individual’s health plan.

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[expand title=”Preferred Provider Organization (PPO)”]

A type of health plan in which the insurance company contracts with specific doctors or hospitals, called a Network. These Network providers agree to provide services to members of a health plan at a contracted rate. Generally, you will pay less for services if you use a doctor or hospital inside your PPO Network

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[expand title=”Premium”]

The fixed cost per month that you pay for your health coverage.

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[expand title=”Premium Tax Credit”]

A Federal Government subsidy paid to an insurance company as coverage is purchased, it is available to individuals based on income, and expected to help make insurance more affordable by reducing the amount of monthly premium an individual will pay. These subsidies are available through the public Marketplace.

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[expand title=”Prescription Drug Coverage”]

A health plan that pays for your prescription drugs or medication.

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[expand title=”Preventive Health Care”]

Certain medical services defined by the federal government that are judged to help either prevent a health condition from occurring, or becoming worse through lack of diagnosis or neglect. Preventive services generally consist of physicals, screenings, or other simple diagnostic tests.

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[expand title=”Primary Care Physician”]

A doctor or physician who performs a variety of services directly for a patient and is usually the first medical provider to see for routine health care.

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[expand title=”Referral”]

A recommendation from your primary care physician to receive services from a specialist, or on some occasions, receive another medical service outside of your network.

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[expand title=”Service Area”]

The geographic area associated with a specific health plan, limiting participation in the plan to residents of that specific location.

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[expand title=”Silver Health Plan”]

One of four “metal” levels of insurance available at the government marketplace. When taken together with all other silver plans sold by one insurance company, it will pay, on average, at least 70{bcdee29d8ece072d76c660bfa283f395bc73ff9272f7bb81f739f49cdd20ae0b} of the cost of services.

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[expand title=”Special Enrollment Period”]

Short periods of time, up to 60 day, when an individual may be able to purchase health insurance outside of open enrollment. The “qualifying events” are limited to life experiences such as marriage, divorce, birth of a child, loss of a job, and so forth.

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[expand title=”Summary of Benefits and Coverage (SBS)”]

A tool that allows an individual to view what health plan covers, its various costs, and other pertinent information. SBC’s allow for comparison of two or more health plans.

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[expand title=”UCR”]

Sometimes used to determine the amount a health plan will pay for a medical service. The amount allowed reflects what is usual and customary in the area where the services were performed.

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