For a healthy understanding of insurance industry terminology

Allowable Charge – The maximum fee that a health plan will reimburse a provider for a given service.

Annual Maximum – The maximum amount of benefits paid for specific covered charges on behalf of any covered person during a year. The Annual Maximums accumulate toward and are not in addition to the Lifetime Maximum.

Appeals - A process available to the patient, their family member, treating provider or authorized representative to request reconsideration of a previous adverse determination.

Benefit – Payments provided for covered services under the terms of the certificate. The benefits may be paid to the covered person, or on his or her behalf to the medical provider. Benefit design includes the types of benefits offered, number of visits allowed, percentage paid or dollar maximums applied, covered person responsibility (cost sharing components) and covered person incentives to use network providers.

Claim – A request for payment for benefits received or services rendered.

Coinsurance – A payment made by the covered person in addition to the payment made by the insurance company on covered charges, shared on a percentage basis. For example, the health plan might pay 80% of the allowable charge, with the covered person responsible for the remaining 20%; the 20% amount is then referred to as the coinsurance amount.

Coordination of Benefits (COB) – The provision which applies when a covered person is covered by two plans at the same time. It is designed so that the payments of both plans do not exceed 100% of the covered charges. COB also designates the order in which the plans are to pay benefits. Under COB, one plan is determined to be primary and its benefits are applied to the claim first. The unpaid balance is usually paid by the secondary plan to the limit of its responsibility. Benefits are thus “coordinated” between the two plans.

Co-payment (or copay) – A way in which the covered person shares in the cost of health care. The certificate may require the covered person to pay a flat dollar amount per unit of service. An example of a common co-pay is $20 per physician office visit.

Covered Charge(s) – That part of an expense incurred which:

• is for care of a sickness or injury or for routine or preventive care as described in the certificate;

• is incurred while the person’s coverage is in force, or as provided under the Extension of Benefits provision;

• is shown in the covered charges of this benefit;

• is not otherwise excluded or limited.

If the hospital, physician or other provider waives the deductible or coinsurance, the entire charge is no longer a covered charge.

Deductible – The amount a covered person must pay each year before benefits for covered charges will be paid. The deductible is shown in the certificate on the Schedule of Benefits.

Dependent – A person (spouse or child) other than the person who is covered in the subscriber’s benefit certificate. Also called a “Member” or “Beneficiary.”

Effective Date – The date on which the coverage of an insurance certificate goes into effect at 12:01 a.m.

Exclusions – Specific conditions or circumstances that are not covered under the benefit agreement. It is very important to consult the certificate to understand which services are not covered benefits.

Explanation of Benefits (EOB) – A form sent to the covered person after a claim for payment has been processed by the health plan. The form explains the action taken on the claim. This explanation usually indicates the amount paid, the benefits available, reasons for denying payment or the claims appeal process.

Encounter Fee – A charge for each visit to a physician’s office.

HIPAA- Health Insurance Portability and Accountability Act of 1996. The law has several parts:

The first part addresses health insurance portability and is designed to protect health insurance coverage for workers and their families when they change or lose their jobs.

Another part of the law is designed to reduce the administrative costs of providing and paying for healthcare through standardization.

The law also includes requirements to protect the privacy of individuals' protected health information. Health plans, providers and other organizations with access to protected health information are covered by the requirements of HIPAA.

In-Network Provider - Any health care provider (physician, hospital, etc.) that belongs to a certain network. Staying in-network gives members the advantage of significant discounts, helping to stretch their account dollars further.

Lifetime Maximum – The maximum amount of benefits that will be paid for covered charges on behalf of any covered person over the time that person is insured. Benefits paid under more than one policy or certificate issued through the employer may be added together to determine when a covered person has reached the Lifetime Maximum. The Lifetime Maximum is shown in the certificate on the Schedule of Benefits.

Out-of-Network Provider - Any health care provider that does not belong to a PPO network. Members can use their benefits for out-of-network expenses, but miss out on in-network discounts.

Out-of-Pocket Maximum – The total amount a covered person must pay before his or her benefits are paid at 100%. It does not include charges applied to the deductible. The Out-of-Pocket Maximum is reached by a covered person’s payment of his share of the In-Network or Out-of-Network Coinsurance percentage. The Out-of-Pocket Maximum is shown in the certificate on the Schedule of Benefits.

Point-of-Service (POS) plan - A health plan allowing the member to choose to receive a service from a participating or non-participating provider, with different benefits levels associated with the use of participating providers.

Preferred Provider Organization (PPO) plan - A specific type of health plan with a national network of physicians. Plan members can visit physicians both in and out of the network, and can visit specialists without a referral. Members don't need to choose a primary care physician for coverage. An annual deductible is required, and an out-of-pocket maximum applies.

Pre-Existing Condition – A sickness or injury for which a covered person has, during the six months just prior to his effective date:

• received medical care or advice for symptoms or a diagnosed condition;

• had drugs or medicines prescribed, whether taken or not; or

• had diagnostic tests ordered, whether performed or not.

Such condition will be deemed to be pre-existing if any of the above has occurred whether or not a final diagnosis has been made prior to the effective date of the person’s coverage.

Precertification – A utilization management program that requires the covered person or the health care provider to notify the insurer prior to a hospitalization or surgical procedure. The notification allows the insurer to authorize payment, as well as to recommend alternate courses of action.

Preventive care - Medical and dental services aimed at early detection and intervention.

Primary Care Physician (PCP) - A physician, usually a family or general practitioner, internist or pediatrician, who provides a broad range of routine medical services and refers patients to specialists, hospitals and other providers as necessary. Under some benefits plans, a referral by the primary care physician is required to obtain services from other providers. Each covered family member chooses his or her own PCP from the network's physicians.

Schedule of Benefits – A list of maximum amounts payable for certain conditions.

Specialists - Providers whose practices are limited to treating a specific disease (e.g., oncologists), specific parts of the body (e.g., ear, nose and throat), a specific age group (e.g., pediatrician), or specific procedures (e.g., oral surgery).

Usual, Customary or Reasonable (UCR) - The amount reimbursed to providers based on the prevailing fees in a specific area.