Insurance Definitions & Insurance 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

A

Accreditation

A set of standards that are predetermined that provide a health plan or a hospital with a stamp of approval. There are two organizations that work to set standards of managed care plans, which are the National Committee for Quality Assurance or NCQA and the Joint Commission on Accreditation of Health Care Organizations or JCAHO. JCAHO works to accredit hospitals and clinics while you will find that NCQA works to accredit the HMO health plans out there. For PPO plans, their accreditation is completed by the Utilization Review Accreditation Commission or URAC.

Actuary

A statistician and mathematician that works for an insurance company. The actuary is responsible for assessing risk based on claims paid and premium generated, using this information they are able to create premiums for the company to charge or plans. Their job is to make sure that the company is going to be profitable.

Activities of Daily Living (ADL)

ADLs are your daily habits that include eating, bathing, and dressing. These activities are used to assess and determine the functionality of a person that is home after they have been hospitalized for a serious illness or injury.

Acute Care

This is a treatment for severe illnesses that have come about immediately or for injuries that are related to an accident, trauma, or even rehabilitation after surgery. Acute care is generally used for a very short time and it is generally done in a hospital.

Admitting Privileges

A right that is granted to a doctor which allows them to admit patients to a certain hospital or clinic.

Advocacy

An action done with the intention of helping a person or a group of people to get a particular need, right, or privilege.

Agent

Licensed representatives who represent and sell one or more health insurance provider by presenting the plans to their potential clients.

Ambulatory Care

Treatment that is provided outside of a hospital and is also known as outpatient care. Ambulatory cary involves any facitlity where you do not stay overnight when you are receiving your treatments.

Ancillary Services

Services that are directly related to care and are done to help with a diagnosis and a treatment plan, these include physical therapy, respiratory therapy, radiology, and laboratory testing and treatment.

Appeal

A reconsideration with reason and evidence to potentially overturn a denial for a claim or treatment from your health insurance company.

ASO (Administrative Services Only)

Using a third party that is hired by the employer to provide administrative services to the facility. The third party company only does administrative work which involves processes like billing, collections, and claims processing. The employer is still help responsible for the claims that are being filed. This method is most often used for self-insured plans for health care.

Association Health Plans

This is a health plan that is sponsored by an association. Through the Health Insurance Portability and Accountability Act of 1996 or HIPAA, there are certain requirements that must be met to fall into this category and there are certain requirements that are waived. Small businesses may be an example of an association health plan.

B

Balance Billing

This is the idea of billing any outstanding charges and fees after the insurance provider has paid the portion of the bill that they are responsible for.

Behavioral Health

This is mental health care that includes counseling for families and for marriages, psychiatric treatment, substance abuse and addiction treatment. These services can be done by a large list of providers but for the most part are provided by people working in the mental health industry like counselors, psychiatrists, and psychologists.

Benefit

The claim portion that is paid by the health insurance company contracted by a claimant when a loss is suffered.

Benefit Limitations

A provision in a health insurance policy that will limit the coverage provided regardless of if it is medically necessary. These limitations are usually expressed as a maximum payment, the length of your stay, a diagnosis, or a particular treatment.

Benefit Package

The options that are guaranteed to you in your health insurance policy, this will include the costs of your plan, the limitations of service, and the spending limits that exist annually or lifetime.

Birthday Rule

How it is determined as to what parent’s medical insurance will be primary for any dependent children. The parent with a birthday that falls earlier in the year will always be the primary with this rule.

Board Certified

A certification that is done through a written and oral examination that was administered by a specialty board in the medical field. With some health plans, they may accept a board eligible doctor as the equivalent as one that is board certified.

Brand-Name Drug

Prescription medications that are given a brand name of the company that creates them and patents them. Once the patents have expired, the generic versions are generally marketed and are provided at a much lower cost. Your health plan will have coverage differences between the brand name medications and their generic similar option.

Broker

A licensed insurance agent that is able to quote planes and information from a variety of carriers..

C

Cafeteria Plan

A benefit option that allows people to select their own benefits from a list, this is most likely used with larger group plans. Some of these options amy just be add-ons or it may allow options to be selected for all benefits. This may also refer to plans that are offered through a variety of insurance carriers.

Capitation

This is a dollar limit that is capped in regards to what you or your employer are going to pay to a health maintenance organization or HMO, this does not take into account how much you use the services that are being offered to you.

Carrier

An organization that is licensed and that administers and underwrites a health insurance, life insurance, or other type of insurance plan.

Carve Out

A strategy that HMOs and insurers use to help ensure that they are able to cover a wide variety of services that they may not have an in-house provider for. This is a financial agreement that administers these services separately and funds them separately too. Some of the common services that are carved out will include things like rehabilitation, ambulatory services, and chemical dependency.

Case Management

A method that was created to help coordinate and manage the care for treatment that you are receiving for a specific disease. With this method, it will ensure that you get the level of service that you need and that it is completed in the most cost-efficient manner, while still giving you the best outcome.

Case Manager

The manager of your case who is generally a social worker or a nurse that manages the relationship between you, your doctor, and the insurance company. These managers will help you coordinate any care that you may need that is appropriate and necessary for your medical condition.

Catastrophic Health Insurance

A health insurance plan that provides coverage for the most extreme of cost and situations. These plans help to eliminate paying the costs that are going to be related when you are being treated for a serious illness or a severe injury. These policies generally kick in at a certain dollar amount and may cover some or all of the costs at that level.

Centers for Medicare and Medicaid Services (CMS)

The Center for Medicare and Medicaid Services (CMS) is a Federal agency that is a part of the Department of Health and Human Services, they work to administer the Medicare programs, the State Children Health Insurance Program, and the Medicaid program.

Certificate Of Coverage (COC)

A paper that outlines the coverage you have and the benefits that have been provided.

Centers of Excellence

Specialized hospitals that have reached an accreditation process for treating certain illensses and completing specific procedures that are more difficult than the standard treatments that are completed.

Certificate of Insurance

A printed paper that explains the benefits and the coverage and is a contract between the client and the insurance company. This document shows what is covered, what is excluded, and what the limitations are in terms of dollar amounts.

Charges

The prices that are published for any service that is provided at a particular facility or through a particular provider. You will find that generally there is a large difference between what the Hospital charges and what the insurance company is going to pay, what you will find is that your insurance company negotiates a rate that is generally 40 percent lower than the published rates that are out there, which makes a need for insurance.

Chronic Care

Care that is for a long duration that helps with treatment of diseases that are persistent such as asthma. This type of treatment really pushes to create self-care so that people can improve their health and help to stabilize them.

Claim

An order that is created by the person being treated or their medical provided that is to the insurance company asking for services to be covered as outlined in the insurance plan.

Claims Review

A process created that insurers use to ensure that they are paying out services that are in fact covered by the insurance policy.

Closed Access

A health plan that has a “gatekeeper” in which you must go to providers that are contracted by that plan, these are generally HMO plans.

Closed Panel

A group of physicians who are contracted by an HMO to provide services and only provider services to members of that HMO.

COBRA

A Federal law that helps provide insurance coverage for workers that have lost their job or whom have had thier coverage terminiated through their employer for up to 18 months.

Coding

A system that has been created and managed by the International Classification of Diseases or ICP for inpatient hospital stays or the Current Procedural Terminology (CPT) for outpatient treatment. This provides a system to track treatment by disease or disorder and help with billing and to prevent fraud.

Coinsurance

A cost sharing portion of a health insurance plan in which the insured person pays a certain percentage of any claims and the insurance company pays a certain percentage of any claims. With most insurance policies, the coinsurance is generally an 80 percent cost sharing by the insurance company and a 20 percent cost sharing by the insured.
• When the deductible and coinsurance limits are met, the insurer will be responsible for the rest of the bill.
• Depending on the service rendered, the coinsurance may differ within the plan.

Co-Morbid Condition

A diagnosis that has a principal reason and another condition that when combined will cause an insured’s hospital stay to increase by at least a day.

Comprehensive Major Medical Insurance

A health insurance policy that provides the highest level of insurance coverage and gives protecting for everything from catastrophic events to routine medical expenses. These plans usually have a low deductible, co-pay, and coinsurance and are heavy in benefits.

Concurrent Review

The reviewing of a procedure or a hospital admittance that is done by a professional in the heatlh care field that is different from the person that provided car. This is done to determine that the services, procedures, or hospitalization were appropriate and are what should be done.

Confidentiality

A promise of protection of your personal information that is required by insurers, states, the federal government, or your health insurance policy.

Conventional Indemnity Plan

A plan that allows you to choose any provider and get a reimbursement without an effect on it.

Consolidated Omnibus Budget Reconciliation Act (COBRA)

A Federal Law that was created to provide people that are employed and let go or employed and lost their benefits to continue them guaranteed for 18 months at the cost that the employer was paying plus a small fee for service of the plan.

Conversion

The ability to convert your group health insurance plan into some type of individual insurance policy without taking into regards any preexisting conditions or requiring any medical exam. This is used in the event that group coverage ended and COBRA was exhausted.

Coordination Of Benefits (COB)

A process that has been put in place by insurers to make srue that they are not making duplicate payments on any insurance policy. This is for the cases where there is a primary and a secondary coverage and to prove that not more that 100 percent is being paid out to the provider.

Co-payment

A form of cost sharing for medical expenses where the insured pays a flat fee for a service that is rendered and the insurance company pays the rest of the bill.
• Co-payments may be different depending on the service being allocated.
• With some insurance plans, you will have to pay a deductible before your co-payments will start.

Cosmetic Procedure

A treatment option that is for appearance and is not deemed medically necessary.

Cost Sharing

A split where the cost of health care is split between an insurance company and an insured. Options for cost sharing will include co-payments, coinsurance, or deductibles. Cost sharing does not include premiums.

Covered Benefit

A medical procedure or service that is deemed medically necessary and is provided for coverage under a health insurance plan. These benefits are discussed in the Evidence of Coverage section. Sometimes, these benefits may not be medically necessary, but may still be a covered benefit.

Credentialing

A process that involves ensuring that a provider that is renewing or a new provider has met standard that are set in place by a health care plan or by a hospital staff organization so that they can continue participating with that insurer.Tihs provides a standard by which a hospital must act and provide a particular level of service.

Credit for Prior Coverage

A benefit that sometimes applies when you are switching coverage that would waive any preexisting conditions. This shows that you had coverage in place for an extended period of time with no interruption and this will be honored as coverage under your new insurance provider so that the preexisting condition waiting period is not applicable.

D

Deductible

A dollar amount that is fixed and that is set for a benefit period. This is a dollar amount that the insured is responsible fro before the insurance carrier will start paying for any covered medical services. Deductibles are generally set for a yearly basis.
• Some plans will have deductibles that are different for different covered services.
• Deductibles may be different for in network and out of network services.

Denial of Claim

The option that an insurance company has to honor a claim from an individual or provider to pay for health services.

Dependent Worker

A particular family member that works but has a greater income somewhere else in the family.

Dependent

A person that is covered under a health insurance plan because they are dependant to the person with the plan as a parent, spouse, or unmarried partner.

Disallowance

The right of an insurance company to determine not to pay all or part of a claim that has been made.

Discharge Planning

A plan that is what sets up your services for after-care that helps determine when you will be discharged from the hospital.

Durable Medical Equipment (DME)

Medical equipment that you either rent or own that helps you with treatment within your home or for medical rehabilitation.

E

Effective Date

The date that your insurance benefits become active and the date that you are covered.

Electronic Medical Record (EMR)

A record that is based on a computer that is going to hold your personal health care information, this is a technology that was created and will help provide real-time access for all of the medical care.

Elimination Period

The period on your health insurance policy where coverage is not provided for pre-existing conditions.

Emergency Medical Treatment And Labor Act (EMTALA)

A legislation that makes it so that a hospital must provide you with treatment in the event of an emergency regardless of the status of your insurance or the ability you have to pay.

Employee Assistance Program (EAP)

A program that employers sometimes provide that will help with personal or family problems. Issues like this involve substance abuse, parenting issues, gambling, and many others. This started as a focus for drug and alcohol abuse and a way to provide treatment without having to get rid of employees.

Employee Retirement Income Security Act of 1974 (ERISA)

A Federal legislation that helps to regulate private pensions and welfare to provide protection.

Evidence or Explanation Of Coverage (EOC)

The contract that is provided to you so that your insurer can give you your summary of benefits and the coverage that you have.

Evidence of Insurability

Proof that the health of a person would actually affect their acceptance for a health insurance plan or contract.

Exclusions

Treatments, conditions, and situations that are not covered with your health insurance plan. Exclusions often include infertility treatment and cosmetic surgery.

Exclusive Provider Organization Plan (EPO)

A plan that is more restrictive that is similar to a preferred provider organization but is a bit more restrictive. The employees have to use providers that are in the network in order to get the insurance to pay for it, there is no coverage for going out of network.

Explanation of Benefits (EOB)

A statement that is sent to you that tells you about the services provided to you, how much they were, what was billed, and what you are responsible for.

F

First Dollar Coverage

These are a type of insurance plan that have no deductible, so benefits will start immediately for coverage. Most of the time, first dollar coverage is for certain services such as wellness exams.

Flexible Benefits Plan (Cafeteria plan) (IRS 125 Plan)

A program for benefits that was created under a IRS code, this helps people choose between taxable fenefits and nontaxable benefits. It allows employees to allocate their dollars as they want to for their flexible benefits to things like child care and medication. The money must be spent on qualified expenses.

Flexible Spending Accounts or Arrangements (FSA)

An account that is set up by employers that allows employees to deposit money from their paycheck pretax to pay for their insurance premiums or to pay for medical expenses and supplies that are covered. The money must be spent within the given year.

Formulary

A list that shows what prescription drugs are covered by what list, they will show either an open or a closed formulary and they will also show what you will pay for the drugs and where they fall.

Fully Insured Plan

An insurance plan that an employer contracts out with an organization so that they are able to assume some of the risk for the enrollees’ medical claims and all of the administrative costs.

G

Gatekeeper

A person that helps manage a health insurance plan and coordinate services for medical treatment, lab studies, referrals, and hospitalizations.

Generic Drug

A drug that is a duplicate of a brand name, but that has been on the market long enough that the patent has expired and other companies can create it cheaper. It is easier to get a generic drug with your insurance coverage and the cost is much less.

Grace Period

A period that allows you to make a premium payment past the due date but still ensure that your coverage will not be cancelled. The average grace period is 30 days.

Grievance Procedures

A process that allows you to voice issues and complaints or to appeal a denial of claims or treatment.

Group Insurance

Coverage that is established through an employer to cover all employees should they choose to be insured with this type of coverage.

Group Model HMO

A group insurance plan that is an HMO and contracts through a single medal group that offers a variety of specialties. This is not an exclusive contract, so the medical group may service people that are outside of the HMO. However, people within the HMO get a flat rate that is generally a salaried benefit.

Group Purchasing Arrangement

This the way that you would create a employer based health insurance plan for at least two employees. They use their own governance and functions to create this entity and to be sure that there is a price negotiating ability, risk pooling, and options for the group. These are sometimes known as MEWAs.

H

Health Care Decision Counseling

Services that health insurance companies sometimes provide to help the individuals that are using their service understand the options that are being given to them for their medical testing and treatments. The goal of this service is to allow people to make an educated decision about their health and their treatment so that they can get the service that is going to fit their personalized situation.

Health Employer Data and Information Set (HEDIS)

This is a set of performance measures for an HMO that is created and maintained by the National Committee for Quality Assurance or NCQA. This data is collected once a year and it is used to give consumers the information that they need on the quality of their health insurance plan.

Health Maintenance Organization (HMO)

An HMO or a Health Maintenance Organization is a insurance plan that is essentially pre-paid. This means that individuals generally pay a monthly fee that is fixed for their services instead of paying a separate charge for each of the fees or services. It doesn’t matter how much the plan is used by that particular individual, the fees will stay level. These are services that are also contracted to a smaller network group of providers to keep the costs lower and generally to see a certain doctor you will have to go through a gatekeeper.

HIPAA

A Federal Law that started in 1996 that allowed people to qualify for health insurance coverage that is comparable when they were changing their coverage by changing their employment. The Health Insurance Portability and Accountability Act was also created to help protect health care data and to create a standard for the exchange of information. It sets standards for the codes that can be used and creates a Federal regulation as to what medical information can be released without permission and to whom. This was created as a way to protect consumer’s private medical information”

Hold Harmless Clause

This is a clause that is found throughout the managed care industry that releases the party from the risk of malpractice and creates a way to indemnify both parties from being responsible for any risk. This is also used to explain language that protects an insured if their managed care service were to go bankrupt and a doctor were to try to charge them for services.

Hospice

A facility or an at-home program that is there to provide care for people that have been diagnosed as terminally ill.

I

In-Network

Health care providers and facilities that are part of a network of a particular insurance plan. They provide services at a discount so it is suggested that you see those providers instead of trying to go out of the network and pay higher costs.

Indemnity Health Plan

This is a plan that is also known as a fee for service plan, this plan actually reimburses the insured once they have completed the service and the expenses have already been incurred. These plans are more of something you would see in the past and have been replaced with other plans today. With most of the plans out there that fall into this category, after the insured has received the service, the insurance company will provide a partial reimbursement of the services that have been incurred and the costs that are assigned to it.

Identification Card

The car that your insurance provider gives you that will show what benefits you have and identifies that you are the person to receive the benefits.

Individual Practice Association (IPA) HMO

This is a provider organization for health care that has a group of individual physicians that practice on their own and band together so that they can contract their services together to help with an HMO or another type of service plan.

Informed Consent

This is a term that shows that health care providers are explaining the benefits, the risks, and the purpose of the medical care that the insured is about to incur. This would include explaining a particular treatment option and getting authorization as according to HIPAA to release the health care information that may be required.

Inpatient Care

This is care that is given within a hospital or medical institution in which the patient is given a room and a bed and is staying overnight or for multiple nights.

L

Lifetime Limit

This is the agreement on the amount of benefits that the insurer will pay for a particular health insurance plan over the lifetime of the policy. Some plans have no lifetime limitation and others will have limitations like $1 million or $5 million.

Long-Term Care Policy

This is a particular type of insurance policy that is created to cover very specified services for car that will be long term. This includes care like nursing care in a nursing home, home health care, custodial care, and sometimes even hospice care.

Long-Term Disability Insurance

Coverage that people purchase so that they can get paid a percentage of their wages in the case that they become disabled for more than six months.

LOS

An LOS is the length of stay and is the time that a person is required to stay in a facility. This is a term that people use so that they can code correctly and bill correctly for services.

M

Managed Care Plans

These are plans that are created to provide health services that are comprehensive in nature. Generally, a discount si given to insured patients that are using providers that belong to the plan. Health Maintenance Organization (HMO)
• Preferred Provider Organization (PPO)
• Exclusive Provider Organization (EPO)
• Point Of Service (POS)

Managed Care Provisions

This is a feature that allows health plans to give insurers a way to keep tabs on the cost of the plan, the use of it, and the quality of the services that are being provided to members of the group.

Mandated Benefits

Benefits of a particular insurance plan that are mandated by law, either Federal or State law.

Maximum Plan Dollar Limit

This is the maximum payment that the insurer will make for a particular covered expensive under the plan for the insured and for any dependants that are on the plan.

• Insurance plans may have a yearly dollar limit or just a lifetime dollar limit.
• The most typical of maximums is the lifetime amount of $1 million per person and are being done away with due to the Health Insurance Reform Act of 2010.

Maximum Out-Of-Pocket Expense

This is the most amount of money that can be put out of pocket by a member that is insured through ha plan. This generally includes a deductible, a coinsurance, and any co-pays. Covered services after these have been met will be paid in full by the insurer up to the coverage lifetime maximum if there is one on the plan.

Medical Information Bureau (MIB)

A service that basically exists as a data pool that is there to store the health history of individuals that have applied for individual life and health insurance. Life and health insurance companies use this as a way to screen potential applicants for health issues.

Medical Savings Accounts (MSA)

This is a savings account that was created to help cover out of pocket expenses for medical services that are paid using pre-tax services. With the MSA, the money will carry over year after year and the funds aren’t lost no matter how many years you have it in place. These are great to pair with a catastrophic health insurance plan or a high deductible health insurance plan.

Medically Necessary

These are services, treatments, and supplies that are deemed necessary for the insured to get the proper treatment that they need. These are treatments and services that are being carried out because you need them and not beucase your doctor wants to receive a benefit for performing the service.

Medigap Insurance Policies

This is an insurance policy that will fill in the gaps that Medicare does not cover. These plans are sold by a private insurance company and are not part of the government Medicare program. These plans will pay some of the benefits that are not covered and some will cover all of the gaps that Medicare has.

Mental Health Parity

This is a Federal law that was passed to ensure that insurers provide the same level of care for mental health treatment that they are providing for surgical and medical treatment.

Minimum Premium Plan (MPP)

This is an employer sponsored health insurance plan in which the employer agrees to pay a certain amount of claims, once that amount is reached, the insured is responsible for anything that is in excess. The insurer is also generally responsible for dealing with claims in terms of processing and filing.

Multiple Employer Trust (MET)

This is a form of a trust that combines many small employers that are in the same industry, this is created so that people with these like industries can purchase a group health insurance plan by creating a small group.

Multiple Employer Welfare Arrangement (MEWA)

MEWA is a term that refers to a federal law that helps create collective bargaining rights for small employers that are creating health insurance plans. These plans are created under MEWA and under ERISA also. The state is responsible for the regulation of these plans and these trusts that are founded are generally tax-exempt. You may find a MEWA through your local Chamber of Commerce or through many other options, they are used to provide self-insurance to small groups of employees. A MEWA is a very unique way to provide a health insurance benefit to people that work for a small business or a small employer with very few employees.

Multi-Employer Health Plan

The plans that are like this are plans that are jointly administered. These plans are generally subjected to the Federal laws that are out there and not the state laws. These are created in alignment with the collective bargaining agreements that are out there. A lot of these plans to self-insure and are able to save money through that option and provide insurance.

N

National Practitioner Data Bank (NPBD)

This is a computerized database that has created by the Federal government to hold the information that is out there on physicians that have had malpractice suits filed. This database shows the claims that have been filed, the actions taken, and the disciplinary actions that occurred. This database is used to ensure that physicians being hired can be accredited by certain facilities.

Network

This is a group of hospitals or doctors that are being contracted to provide services to a particular insurance company. The network pricing is negotiated by the doctors and the insurance company and is far cheaper than getting services without insurance and not through a network.

Network Model HMO

An HMO model is something that actually contracts with a large group of physicians that provide their services to an HMO. This may be a small group or a lot of little groups put together.

Non-Emergency Weekend Admission Restriction

A limitation that does not allow an insurance plan to cover an admittance to a hospital on a weekend that was not for a life threatening or emergency condition.

O

Open Access

Open access is the ability to visit any network provider that is contracted within the network without getting a referral.

Open-Ended HMO

This is a type of an HMO that allows individuals that are referred in the plan to use an out of network provider and get some coverage for the service that they had completed like under a more traditional indemnity plan.

Open Enrollment Period

This is a time of the year where you can choose to enroll in your employer’s health insurance plan without prior insurance, waiting periods, or evidence of insurability. Open enrollment generally happens two times a year and that is it.

Out-Of-Network Benefits

With most insurance plans, you are not covered for services received out of the network except for emergencies. Depending on the type of plan that you have, a PPO or an HMO, there may be some coverage, it is important to read your coverage booklet to understand what will be covered and what will not.

Out-of-Plan (Out-of-Network)

This is referring to providers including hospitals, doctors, physicians, and anyone that providers treatment that is not part of the particular insurance plan that you have enrolled in. Depending on the plan that you choose, this may or may not be covered by your provider and you may be responsible for all of the costs.

Out-of-Pocket Expenses

This is the portion of any health care expenses that are not going to be covered or reimbursed by the insurer that you are participating with. This may include your deductible, your coinsurance, and your copayments.

Out-of-Pocket Limit

This is a limitation that is placed on the money that you can spend out of your pocket for medical expenses in addition to any premium that you pay on a monthly basis.

Out-of-Pocket Maximum

This is a set amount of money that an individual has to pay out of their won pcoket before all covered medical expenses are covered at 100 percent in addition to any premiums.

Outpatient Care

This is care that is received in which a person is not admitted to stay the night at a hospital. This may include testing, treatment, surgery, or even doctor’s visits. Generally, an insurance company will have a list of treatments that they consider part of the outpatient care. < dd>

P

Participating Physician

This is a doctor that has agreed to be a part of the network of the insurance company and provide services at a negotiated fee.

Physician Hospital Organization (PHO)

This is an alliance between a hospital and doctors that help providers get the care and the market share that they need to be competitive and to mainly reduce the costs that they have.

Plan Administration

This is a person or group that oversees a particular plan and deals with the details o the plan, the billing, the running and enrollment for the plan, collecting premiums and much more..

Plan Document

This is any document that relates to the plan and the details of the plan. These documents may be legal documents or they may be a summary of the plan.

Point-Of-Service plan (POS)

A POS plan is basically a hybrid of an HMO and a PPO plan. This is basically an HMO that allows you to go in and out of network for the services that you need. The out of network services are paid on a fee schedule and are paid as long as they are deemed reasonable and customary for that area, so you may see overage for out of network charges.

Portability

This is the ability for a health insurance plan to have continuous coverage without waiting periods if you are forced to move to a new plan because your old plans ends. In this situation, a certificate of coverage is received that helps you waive the preexisting condition clause in plans and any waiting periods that may exist.

Pre-Admission Certification

This a certificate that is generally needed for HMO plans before someone can be admitted to a hospital for a surgery or a hospitalization that is not an emergency. This certificate shows the facility that the insurance company is aware of the event that is happening and that they are pre-certifying the stay and that they will cover it. Sometimes, to get a precertification, you will have to get a second opinion.

Pre-Admission Review

This is a review that is done on an individual’s health care status and the condition that they are in before they are admitted to the hospital. This is generally done by a case worker or a representative of the insurance company and is done in cooperation with the facility they are being admitted too

Preadmission Testing

This is a requirement for testing that needs to be done as an outpatient treatment before a person can be admitted to a hospital for a non-emergency treatment or admission. This is done to help reduce the hospital stay length.

Pre-Certification (Pre-authorization)

This is a review of your case that is done to show that there is a need for the care before you are actually admitted to the hospital, this will show if the insurer is going to pay for this treatment.

Pre-Existing Condition

This is a medical condition that was developed prior to obtaining or applying for insurance. In some policies, it may limit your benefits or put a waiting period before coverage will be provided for that particular preexisting condition.

Pre-Admission Testing

These are tests that are done on an individual before they are allows to be admitted to a hospital for an inpatient stay, these are done unless it is an emergency.

Preferred Provider Organization Plan (PPO)

A plan that is an indemnity plan and allows people to see whatever doctor or hospital that they prefer. They will receive a lower rate for seeing providers within a network and can go out of the network but may have a higher deductible, higher rates, or services that are not discounted.

Premium

This is a fee the is agreed on prior to getting the insurance policy that is paid on a monthly basis to keep the insurance in force

Premium Equivalent

This is something that is used for plans that are self-insured, and is the cost that is incurred per employee, and the amount that the company would have spent for the claim and for the administrative costs.

Preventive Care

A health care program that focuses on prevention and early detection. This program was created to help to lower health insurance costs because the hope is that it will be caught before serious treatment is needed. Today, health care focuses on preventive care.

Primary Care Physician (PCP)

This is a physician that is considered the base for the person in an HMO network. They must see their PCP physician before they can go see a specialist and they will need to get a referral to go past their PCP physician.

Protected Health Information

This is health information that has been identified under HIPAA as something that may be transmitted or held in any form.

Provider

A provider is a health insurance professional that will give a variety of services. Providers include nurses, doctors, chiropractors, mental health professionals, and many other people.

R

Reasonable and Customary Charges

These are charges that have been deemed by the insurance company to be reasonable and customary for that particular geographical area.

Reasonable and Customary Fees

This is a fee that is based off of an average for the area of the country that the person lives in and the fee that is generally charged for this. Most insurance companies will only pay for reasonable and customary fees and anything that exceeds that will be paid by the insured themselves. If your fees go over what is considered reasonable and customary, you can except to have ot pay for them.

Referral

A referral is getting permission from your primary care physician to see a doctor that may be specialist or may be located at a different facility or out of network.

Reinsurance

This is an insurance company that actually insures another insurance company and helps with the risk and the burden of risk that the insurance company may take on.

Report Card

This is a way of accountability to show that the services that are being provided by a doctor or a provider over time are reasonable and are something that people are feeling comfortable with. This is a way for a plan to know that they have quality providers in their network.

Rider

A rider is an option that allows a change to be made to an insurance policy. This generally something that is added to coverage and is included on a policy like a term life insurance policy..

Risk

Risk is the chance of an event occurring that will create loss, pain, or suffering, and cause a company to have to pay out a claim. The risk probability is created and determined by an actuary who looks at a variety of factors to determine if there is a risk there and how much of a risk there is. Fro example, if you smoke, you risk getting cancer..

S

Second Opinion

A medical opinion that is provided by a different doctor to show that the treatment planned is necessary. A lot of insurance companies require this for non-emergency procedures to prove that it is something that is reasonable and it si something that they will cover and pay for. People also get second opinions if they feel that they may not need a treatment or surgery that is suggested.

Second Surgical Opinion

A technique that is used by an insurance company to help contain costs and keep costs low. This is something insurers use to determine if a treatment is necessary or if it something that an alternate treatment option would take care if.

Section 125 Plan

This is a type of plan that gives flexible benefits to people to use pre-tax dollars according to the IRS codes for particular medical expenses by making paycheck contributions.

Self-Funded Plan

This is a plan that the employer funds instead of the insurer.

Self-Insured plan

This is a plan that an employer offers and a plan in which they will actually assume the cost of the health insurance for their employees. With these plans, the employer may actually bear a lot of the risk on their shoulders and may look at putting a lot of money out of their pocket. Today, you will find that there are very few self-insured plans because of the risk that is associated with them.

Short-Term Disability

This is a type of insurance in which an injury or illness has prevented a person from going to work. This is something that generally occurs for a period of less than six months and helps to pay for a portion or percentage of their wages so that they can heal and pay their bills at the same time. This is generally an injury or illness that is work-related and an employer provided benefit.

Short-Term Medical

This is temporary medical coverage that is meant for a person to have for a period generally between thirty days and six months.

Small Employer Group

This is a group of employees that are getting a health insurance policy that have between 1 and 99 enrollees that are looking to join potentially.

Staff Model HMO

This is a type of an HMO that is a closed panel and patients are only going to receive services through a very small number of providers that are within the network. Getting outside of the network will not be a covered service for that particular service.

State Children’s Health Insurance Program (SCHIP)

This is a health insurance program that was created at a Federal level and enacted at a state level. This program is used for children that are under the age of 19 and who have conditions that may prevent them for getting coverage anywhere else because of their medical conditions.

State Mandated Benefits

This is a minimum level of benefits that are required on a state level for any health insurance plan. Benefits must be included on these plans.

Stop-Loss

This is a limit for the amount of claims that can be filed for eligible expenses, when you have paid 100 percent of your pocket, it means that the insured can’t spend any more than that amount of money out of thier pocket and protects their loss.

T

Third Party Administrator (TPA)

This is an organization that is independent and that provides administrative services for claism, processing, and underwriting for many different companies.

Triage

This is a method of categorization that classifies the severity of people that are waiting for treatment. This is generally used in the emergency room.

Triple-Option

This is when insurance companies are going to offer three choices for individuals to choose from. Generally, they are going to offer a PPO, HMO, and a more traditional indemnity plan.

Types of Health Care Provider Arrangements

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Exclusive Providers

This means that people enrolled in the plan must go through the providers that are associated with the plans for non-emergency care in order for them to get their claims paid for.

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Any Providers 8

This allows people to go to any provider, but they must have the udnerstnading that they may pay for the excess of costs.

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Mixture of Providers

This means that a person may go to both in network and out of network providers, they should go to a provider in network.

U

Underwriter

This is a company that assesses risk and that is going to assign the premiums and risk classes to the people looking to get insured.

Usual, Customary, and Reasonable Charges (UCR)

This means that with an indemnity plan, you must make sure that anything you are doing is a fee that is average for the geographical area that you are located in. If you aren’t doing that, there is a potential that you will have to pay for the excess fees that are being charged to you because you went and got services that were above and beyond.

Utilization Review

This is a process in which the care and quality of the care is reviewed to ensure that it is appropriate and is at the level that it needs to be.

W

Waiting Periods

This is a period of time in which a person must wait before they are going to get treatment for any preexisting conditions that they may have.

Wellness

This is a term that refers to preventative medication and the lifestyle that people live to reduce costs of claims.