Application: A signed statement of facts requested by the company on the basis of which the company decides whether or not to issue a policy. This then becomes part of the health insurance contract when the policy is issued.
Approved Amount: The amount determined by the Medicare carrier to be reasonable and fair for each service.
Beneficiary: The person designated or provided for by the terms to receive the proceeds upon the death of the insured.
Benefit Package: A collection of specific services or benefits that the health plan is obligated to provide under terms of its contracts with subscriber groups or individuals.
Benefit Period: The period of time during which benefits are available, such as a year or for the lifetime of the contract.
Benefits: The amount payable by an insurance company for covered services.
Carrier: The insurance company responsible for processing claims; it may perform the carrier function on its own behalf, or for another entity who pays losses.
Claim: A demand to the insurer for the payment of benefits under the insurance contract.
CMS: Centers for Medicare & Medicaid Services, the federal agency responsible for Medicare and for working with states to administer Medicaid and the Children’s Health Insurance Program.
Coinsurance: The fixed percentage of covered charges you must pay after any deductible has been subtracted. For example, if a plan pays 80 percent of covered charges (after applying any deductible), you would be responsible for the deductible and the 20 percent balance.
Contingent Beneficiary: Person named to receive proceeds or benefits should an unforeseen event prevent the named Primary Beneficiary(ies) from collecting benefits (or insurance).
Conversion Privilege: A privilege granted in an insurance policy to convert to a different plan of insurance without providing evidence of insurability. The privilege granted by a group policy is to convert to an individual policy upon termination of group coverage.
Coordination of Benefits: Establishes procedures to be followed in the event of duplicate coverage thus assuring that no more than 100 percent of the costs of care are reimbursed to the patient.
Copayment: A fixed dollar amount you must pay for a service or benefit provided by a plan.
Coverage: The amount or extent to which treatment, service, or supply is covered under an insurance policy or benefit plan.
Deductible: The amount of covered charges you must pay before the plan pays benefits, for example, calendar-year deductible and inpatient hospital deductible. Some plans have a family calendar-year deductible, which can be met by any or all of those covered.
Disability: A limitation of physical or mental functional capacity resulting from sickness or injury. It may be partial or total. (See also Partial Disability and Total Disability.)
Domestic Partnership: A union in which two individuals (unrelated by blood) of the opposite or same sex choose to share their lives in a close and committed relationship of mutual caring; who live together and have signed a Declaration of Domestic Partnership in which they have agreed to be jointly responsible for basic living expenses incurred during the Domestic Partnership.
Effective Date: The date on which the insurance under a policy begins.
Eligibility Period: A specified length of time, frequently 30 days following the eligibility date during which an individual member of a particular group will remain eligible to apply for insurance under a group life or health insurance policy without evidence of insurability.
Eligible Date: The date on which an individual member of a specified group becomes eligible to apply for insurance under the (group life or health) insurance plan.
Eligible Employees: Those members of a group who have met the eligibility requirements under a group life or health insurance plan.
Evidence of Insurability: Any statement of proof of a person’s physical condition and/or other factual information affecting his/her acceptance for insurance.
Exclusions: Charges, services, or supplies that are not covered. A plan does not provide or pay for excluded items, nor do charges for them apply toward deductibles and catastrophic limits.
Flexible Spending Account (FSA): A benefit option that reimburses employees for certain expenses they incur. Money is deducted from paychecks on a pre-tax basis. It most often covers reimbursements for medical expenses not covered under other insurance, or childcare expenses.
Grace Period: A specified period – 31 days – after a premium payment is due during which payment may be made without loss of coverage, subject to the policy’s terms.
HIPAA: Health Insurance Portability and Accountability Act of 1996, a federal law that includes health coverage protections and standards for the privacy and security of health information.
Health Insurance: Protection that provides payment of benefits for covered sickness or injury. Included under this heading are various types of insurance such as accident insurance, disability income insurance, medical expense insurance, and accidental death and dismemberment insurance.
Health Maintenance Organization (HMO): An organization that provides a wide range of healthcare services for a specified group at a fixed periodic payment. The HMO can be sponsored by the government, medical schools, hospitals, employers, labor unions, consumer groups, insurance companies, and hospital-medical plans.
Hospice Care: A coordinated program at home and/or on an inpatient basis, offering easing of the patient’s pain and discomfort, and providing supportive care, for a terminally ill patient and the patient’s family, provided by a medically supervised specialized team under the direction of a licensed or certified hospice-care facility or agency.
In-Network Provider: A health care professional or facility that contracts with your health plan to provide covered services at negotiated rates. You remain responsible for applicable deductibles, copays, and coinsurance.
Inpatient Services: The care provided while a bed patient is in a covered facility.
Managed Care: Health-care systems that integrate the financing and delivery of appropriate health- care services to covered individuals by arrangements with selected providers to furnish a comprehensive set of health-care services, explicit standards for selection of healthcare providers, formal programs for ongoing quality assurance and utilization review, and significant financial incentives for members to use providers and procedures associated with the plan.
Medicaid: State programs of public assistance to people, regardless of their age, whose income and resources are insufficient to pay for health care. Title 19 of the federal Social Security Act provides matching federal funds for financing state Medicaid programs, effective January 1, 1966.
Medicare Supplements (Medigap): Policies sold by insurance companies that help supplement the amounts not paid by the Medicare program for covered services.
Medicare: The government health insurance system for people age 65 or older and certain people with disabilities. Prescription drug coverage is available through Medicare Part D.
Miscellaneous Expenses (Ancillary Charges): Hospital charges (other than room and board) such as for X-rays, drugs, and laboratory fees.
Open Enrollment Period: The period of time stipulated in a group contract in which eligible members of the group can choose a health plan alternative for the coming benefit year.
Out-of-Area Benefits: The scope of emergency benefits (and related limitations) available to HMO members while temporarily outside their defined service areas. Some HMOs offer unlimited out-of- area emergency coverage. Others impose a stated maximum annual dollar benefit. Emergency coverage is usually the only HMO benefit in the total benefit package for which members may need to file claim forms for reimbursement of their out-of-pocket expenditures for care.
Out-of-Network Providers: Physicians who do not participate in a contractual relationship to provide services and care for a predetermined amount to a carrier’s member.
Outpatient Services: The care provided to you in the outpatient department of a hospital, in a clinic or other medical facility, or in a doctor’s office.
Partial Disability: The result of an illness or injury that prevents an insured from performing one or more of the functions of his or her regular job.
Participating Physician: A physician who participates in a health plan’s provider network. In Original Medicare, a participating physician agrees to accept Medicare assignment on all covered claims.
Point-of-Service (POS): This product also may be called an open-ended HMO and offers a transition product incorporating features of both HMOs and PPOs. Beneficiaries are enrolled in an HMO but have the option to go outside the network for an additional cost.
Preadmission Certification: A procedure whereby (1) you or your doctor is required to contact your plan before your admission to a hospital, and (2) your plan determines the appropriateness of the admission and the length of stay by using established medical criteria.
Preexisting Condition: A physical and/or mental condition of an insured that first manifested itself prior to the issuance of an STD policy or that existed prior to issuance and for which treatment was received.
Preferred Provider Organization (PPO): A group of physicians and/or hospitals who contract with an employer to provide services to their employees. In a PPO the patient may go to the physician of his/ her choice, even if that physician does not participate in the PPO. Out-of-network care may cost more, depending on the plan.
Premium: The fee you must pay (monthly, biweekly, quarterly) on a regular basis for your enrollment in a plan.
Prescription Drugs: Outpatient drugs and medicines which, by United States law, cannot be obtained without a doctor’s prescription.
Primary Care Network: The structure for these networks will vary considerably depending on the specific network. It may range from a loose association of physicians in a geographic area with a limited sharing of overhead, patient referral, call, etc. to a more structured association with commonly owned satellite clinics, etc.
Primary Care Physician (PCP): Provide treatment of routine injuries and illness and focuses on preventative care. May serve as gatekeeper for managed care. The American Academy of Family Practice defines primary care as “care from doctors trained to handle health concerns not limited by problem origin, organ systems, gender or diagnosis.”
Prior Authorization: Approval from a health plan that may be required before you receive a service or fill a prescription for it to be covered. Prior authorization is not a guarantee of payment.
Providers: Institutions and individuals licensed to provide health care services, such as hospitals, skilled nursing facilities, physicians, and pharmacists.
Service Area: The geographic area where prepaid plan (HMO) providers and facilities are available to you. This area would be the same as, or within, the plan’s enrollment area.
Total Disability: An illness or injury that prevents an insured person from continuously performing every duty pertaining to his or her occupation or engaging in any other type of work. (This wording varies among insurance companies.)
UCR (Usual, Customary, and Reasonable): A maximum payment allowed for a given medical service based on a statistical formula calculated by an insurance company to determine the amount it will pay on a given medical service.
Waiting Period: The length of time an insured must wait from his or her date of enrollment or application for coverage to the date his or her insurance is effective.
