Coinsurance: The insured person and the insurer share the covered procedures under a policy in a specified ratio. For example, the insurer may pay 80% of a procedure´s cost and the insured must pay the remaining 20%.
Co-Payment: A set fee paid by you for medical expenses upon each occurrence, such as a doctor’s office visit, pharmaceutical purchase, or other medical services.
Covered Expense(s): A medical expense that will be reimbursed to you or paid directly to the provider, according to the terms of the plan or insurance contract.
Deductible: The amount that you must pay within a specified accumulation period before the insurance company will reimburse you for eligible expenses.
Dependent: The person(s) in the insured’s family entitled to receive benefits under a plan.
Effective date: The date which an insurance policy becomes eligible to pay for claims.
Explanation of Benefits (EOB): A document sent to you when the plan or insurance company handles a claim. The document explains how reimbursement was made e.g., to the insured or to the provider, or why the claim was not paid, and if any additional information is needed. The appeals procedure should be outlined to advise you of your rights if there is dissatisfaction with the decision.
Family Deductible: A health insurance deductible that is based on the medical expenses of the collective members of a family rather than one individual.
Fee for Service: Traditional health insurance that puts no restrictions on choice of doctors, hospitals or medical services providers regardless of network affiliation.
Flexible Spending Account (“FSA”): An IRS regulated employee-funded medical expense reimbursement plan provided for in Section 125 of the Internal Revenue Code which allows you to pay for health premiums, over the counter medically related items, unreimbursed medical costs, and licensed child and dependent care costs with tax-free dollars. You determine the amount to be deducted regularly from your paycheck pretax. You do not pay federal, state, or local income tax, nor will you pay any social security taxes on the amount deducted. The money is placed in an account for future reimbursements to you. You must use the money to pay these bills or any unused amount reverts to the employer at the end of the year.
Gatekeeper (Primary Care Physician): A health professional within a managed-care environment who determines the patient's access to treatment. The primary care physician treats the patient and determines necessity of access to further treatment and specialists.
Generic Drugs: Prescriptions that are identical, or bioequivalent to a brand name drug in dosage form, safety, strength, route of administration, quality, performance characteristics, and intended use. They are typically sold at substantial discounts from the branded price.
Group Insurance: An insurance program designed to offer health insurance to persons belonging to a group (business, association, professional group, etc.) and their families. As a group, premiums are typically less expensive and choice of benefits broader than purchasing individual health policies.
Health Maintenance Organization (HMO): An organization that provides a wide range of comprehensive health care services for a specified group of enrollees for a fixed, pre-paid premium, regardless of the amount of actual services rendered. Generally, referrals for tests and specialist must be pre-approved. The employee and his/her dependents have no choice of the physician unless he/she is in the HMO.
Insured: The policyholder (e.g., the employer) or beneficiary group (e.g., the employees).
Insurer: The insurance company
Managed Care: Various plans that put limits on the number and types of treatments as well as the health care service providers and facilities that are covered. Each recognized provider agrees to a negotiated fee structure for health care procedures, thus lowering costs for both the insurance company and the insured. Managed care is provided through managed indemnity plans; Preferred Provider Organizations (PPOs), Exclusive Provider Organizations (EPOs), Health Maintenance Organizations (HMOs), or any other cost management environment.
Network Providers: Limited grouping or panels of providers in a managed care arrangement. You may be required to use only network providers or may have financing liability for using non-network providers for medical services.
Out of Network Providers: Medical services obtained by managed care members from unaffiliated or non-contracted health care providers. Often, such care will not be reimbursed unless previous authorization is obtained.
Out of Pocket Expenses: That percentage of medical expenses paid by you for deductibles, co-payments, or if you receive medical services from a provider not associated with the approved network.
Physician Assistant (PA): A medical provider that practices in the full scope of medicine as directed under supervising physicians. PA's are formally trained to provide diagnostic, therapeutic, and preventive health care services. Working as members of the health care team, they take medical histories, examine and treat patients, order and interpret laboratory tests and radiology, and make diagnoses. All states require physician assistants to complete an accredited graduate education program and to pass a national certification exam in order to obtain a license.
Pre-Authorization: Previous approval required for referral to a specialist or non-emergency health care services.
Primary Care Physician: In a HMO or PPO plan that includes this requirement, the program-approved health care provider whom you must contact first with all medical concerns. Generally is a non-specialist who provides basic routine medical care, initiates referrals to a specialist, and provides follow-up care. Referrals are generally to other contracted providers and contracted hospitals. See Gatekeeper.
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Glossary compiled from U.S. Department of Labor Bureau of Labor Statistics/Employee Benefits Survey,
A.M. Best, and Bankrate.com