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COMMON HEALTH INSURANCE TERMS and DEFINITIONS

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Aggregate: In any plan with two or more covered individuals and an Aggregate Deductible, the deductible must be met by any one or any combination of members before the plan will make payments.

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Coinsurance: A certain percent or dollar amount you must pay each benefit period after you have paid your deductible. This payment is for covered services only. You may still have a copay.

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Co-Pay (Copayment): The amount you pay to a healthcare provider at the time you receive services. You may have to pay a copay for each covered visit to your doctor, depending on your plan. Not all plans have a copay.

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Creditable Coverage: Health insurance, prescription drug, or other health benefit plan that meets a minimum set of qualifications. In the case of MEDICARE, a plan has creditable coverage if its actuarial value equals or exceeds the actuarial value of standard Medicare Part D prescription drug coverage. In other words, the plan pays at least as much in prescription benefits as the Medicare Part D standard prescription coverage.

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Deductible:  The amount you pay for your healthcare services before your health insurer pays. This amount is based on your benefit period, which is usually a year.

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Dependent Coverage:  Coverage for qualified dependents, such as a child or dependent spouse.

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Embedded:  In a plan with two or more covered individuals and an Embedded Deductible, each individual must meet their deductible amount before the plan makes payments.  Once the individual meets their deductible, no further deductible is required for that plan year for that person. Other family members continue to pay toward their individual deductibles until the family deductible is met.

 

EPO (Exclusive Provider Organization): A managed care plan where services are covered only if you go to doctors, specialists or hospitals within the plan's ntwork (except in an emergency). EPO plans usually have national network coverage.

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Flexible Spending Account (FSA): An FSA is often set up through an employer plan, that lets you set aside pre-tax money for common medical costs and dependent care. FSA funds must be used by the end of the term-year. It will be sent back to the employer if you don't use it.

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HMO (Health Maintenance Organization): A healthcare plan offering services with specific providers that requires you to choose a primary care doctor. All providers must be part of the HMO plan. Providers of services that are not part of the HMO plan are not covered except for certain emergencies.

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HRA (Health Reimbursement Account): An account that lets an employer set aside funds for healthcare costs. These funds go to reimburse Covered Services paid for by employees who take part. An HRA has tax benefits for employer and employees.

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Inpatient Services: Services received when admitted to a hospital and a room and board charge is made. 

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Network Provider/In-network Provider: A healthcare provider who is part of a plan’s network.

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Outpatient Services: Services that do not need an overnight stay in a hospital. These services are often provided in a doctor’s office, hospital or clinic. 

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Out-of-pocket Cost: The cost you must pay for a provided service.

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PPO (Preferred Provider Organization): A type of insurance plan that offers more extensive coverage for the services of healthcare providers who are part of the plan's network, but still offers some coverage for providers who are not part of the plan's network. PPO plans generally offer more flexibility than HMO plans, but premiums tend to be higher.

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Premium: Payments you make to your insurance provider to keep your coverage. The payments are due at certain times. 

 

Provider (or Health Care Provider:  A hospital, facility, physician or other licensed healthcare professional.

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