Glossary

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Adjudication: The administrative procedure used to process a claim for service according to the covered benefit.

Advocacy: Activities done to help a person or group get something the person or group needs or wants

Annual Enrollment Period: A period of time prior to the beginning of the Plan Year during which eligible employees may change their benefit elections

Benefit: Amount payable by the health plan for a claim

Cafeteria: A benefits plan that allows employees to select from a pool of choices, some or all of which may be tax-advantaged. Potential choices include cash, retirement plan contributions, vacation days, and insurance.

Calendar Year: January 1 through December 31 of the same year

Capitation: Method of payment to Providers where a set amount per covered person is paid, regardless of the level or type of care provided

Claim: A request by an individual (or his or her Provider) to the health plan for payment or reimbursement for services obtained from a health care professional

Coinsurance: The percentage of a charge the covered person must pay for a service

Consolidated Omnibus Budget Reconciliation Act (COBRA): A law requiring employers to offer continued health insurance coverage to employees who have had their health insurance coverage terminated

Consumer-Directed Health Care (CDHC): A term that refers to health plans in which employees have a personal health account, such as a Health Savings Account (HSA) and/or a Health Reimbursement Arrangement (HRA), from which they pay medical expenses directly.

Consumer-Directed Health Plans (CDHP): Consumer-directed health plans typically offer reduced premium costs, in exchange for a higher deductible. In addition, many provide incentives and tools to manage both health care decisions and the costs associated with them. A typical consumer-directed plan also may include:

• Web-based tools that help you make decisions about your health plan choices, how much to contribute to your health savings account,
• Web-based educational information you need to make informed decisions about your healthcare,
• Preventive coverage at little or no cost (deductibles do not apply), and/or
• Other support features, such as nurse telephone lines, care coaches and disease management programs.

Coordination of Benefits (COB): A system to eliminate duplication of benefits when a person is covered under more than one health plan; benefits under both plans are usually limited to no more than 100% of the Claim.

Copay: The flat fee dollar amount of a charge that a covered person must pay for certain Covered Services.

Covered Services: Those medical procedures the health plan agrees to pay for.

Date of Service: The day the services are received by a patient.

Deductible: The amount of covered expenses an individual (or family) must pay before benefits become payable by the health plan; often determined on a Calendar Year or Plan Year basis.

Denial of Claim: Refusal by the health plan to pay or reimburse a Claim.

Effective Date: The date coverage begins for a covered person under the contract.

EFT: Electronic Funds Transfer; also referred to as direct deposit.

Eligibility: A generic term applying to enrollment benefits, service reimbursement, etc., most commonly defined as the determination of whether a member qualifies for coverage.

Exclusions: Medical services that are not covered by the health plan.

Explanation of Benefits (EOB): A formalized statement to a subscriber and/or Provider showing action taken on a Claim.

FSA: A Flexible Spending Account (FSA) is an employee benefit that allows you to have pre-tax dollars withheld from your paycheck to pay for un-reimbursed healthcare or dependent care expenses. You choose how much money you want to contribute to an FSA at the beginning of each plan year.

Generic Drug: The identical or bioequivalent medicine to a brand name drug in dosage form, safety, strength, route of administration, quality, performance characteristics and intended use; although generic drugs are chemically identical to their branded counterparts, they are typically sold at substantial discounts from the branded price.

Health Maintenance Organization (HMO): An organization set up and operated to provide health services under a pre-paid or Capitated arrangement; monthly fees to the HMO remain the same regardless of the types or levels of service provided.

High-Deductible Health Plan (HDHP): An HDHP is a health benefit plan that typically offers lower premiums in exchange for higher annual deductibles when compared to traditional health plans.

To be an HSA compatible or “qualified” HDHP, the plan must meet the requirements of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 for minimum deductibles and out-of-pocket maximums. High deductible plans may offer first-dollar coverage of preventive care and still remain qualified.

HRA: A Health Reimbursement Arrangement (HRA) is a tax-favored savings account employees can use to pay for healthcare expenses. It is employer-funded and can let employees build up savings for future needs. An HRA can be coupled with a standard or high deductible health plan (HDHP), or offered on its own.

HSA: A Health Savings Account (HSA) is a tax-favored savings account you can use to pay for healthcare expenses. It is owned by you, is 100% vested, and lets you build up savings for future needs. A requirement for opening an HSA is that it be coupled with a qualified high deductible health plan (HDHP) that covers catastrophic medical expenses after the deductible. Specifically, for 2008 the plan must have a deductible of at least $1,100 for individual coverage and $2,200 for family coverage. For 2009, the plan must have a deductible of at least $1,150 for individual coverage and $2,300 for family coverage.

Important Note: If you own an HSA and later become ineligible to make deposits, you can still receive distributions from your HSA. All that is limited is your ability to put additional contributions into an HSA.

Indemnity Health Plan: Individuals pay the Deductible plus a pre-determined percentage of the cost of healthcare services, and the health plan pays the remaining portion; fees for services are defined by the providers and vary from physician to physician.

Lifetime Maximum: When benefits to the covered individual total this amount, no more benefits will be paid for the person under the contract.

Managed Care: Medical delivery system that attempts to manage the quality and cost of medical services that individuals receive; HMOs and PPOs are managed care plans.

Member: Often used to refer to the contract holder, policy holder, or subscriber in a health plan; also known as covered person, enrollee, or insured.

Network: Limited group of Providers that must be used in order to receive a higher level of benefits.

Open Enrollment: The period of time during which a person is first eligible to enroll under the contract, starting on the date of the person's initial date of eligibility and ending several weeks later, also used to refer to the Annual Enrollment Period.

Out-of-Pocket Maximum: The total amount of the calendar year deductible plus the amount of any coinsurance and/or copays a covered person must pay each calendar year for covered services before benefits will be paid at 100%; some services may not apply to the out-of-pocket maximum.

Plan Year: Twelve month period between health plan renewals.

Preferred Provider Organizations (PPO): Type of health insurance program where a limited group of physicians and hospitals provide a broad range of medical care for a predetermined fee; individual who do not use the preferred providers for care usually have to pay a higher portion of their medical expenses.

Premiums: The amount paid by the customer on a periodic basis for coverage under the health plan.

Prescription Drug List: A list of drugs covered by the health plan often listed as 1st tier (generic), 2nd tier (brand name preferred), or 3rd tier (brand name non-preferred).

Pre-existing Condition: A health problem that existed before the date a person’s health plan became effective.

Primary Care Doctor (PCP): Usually the first contact for health care, often a family physician or internist; the PCP monitors an individual’s health and treats minor health problems, and refers out to specialists if further care is needed.

Provider: Any person (doctor, nurse, dentist, therapist) or institution (hospital, clinic) that provides medical care.

Referral: A form provided by a member’s doctor authorizing services from other Network providers if the attention of a specialist is required.

Substantiation: The administrative procedure used to support a claim with proof of purchase.

Usual, Customary and Reasonable (UCR): The amount customarily charged for a service or supply; most plans will only cover services up to UCR and individuals may be required to pay the full cost of the difference.

Utilization Review: A set of formal techniques designed to monitor the use of, or evaluate the clinical necessity, appropriateness, efficacy, or efficiency of health care services, procedure or settings.

Waiting Period: The waiting period is the length of time an employee must continuously work for the employer before he is eligible to enroll for coverage under the contract.