Coinsurance . . . Copayment . . . EOB . . . What does
it all mean? |
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At  ,
we understand how confusing it can be to decipher all the
insurance terms and acronyms that come with purchasing a Health
Savings Account plan. Therefore, we’re providing
you with the definitions of the most commonly used insurance
terms and acronyms.
When
reading the definitions, please keep in mind that this glossary
is provided as a general guide. These definitions are
for illustrative purposes only and are not meant to be exhaustive.
Definitions and plan options may vary by state and plan.
If you obtain coverage, please refer to your contract for
a complete listing and exact definition of terms, as your
contract language will prevail.
A
Ancillary
Services - services, other than those provided
by a physician or hospital, which are related to a patient’s
care, such as laboratory work, x-rays and anesthesia.
C
Calendar
Year - the period beginning January 1 of any year
through December 31 of the same year.
Case
Management
- a process whereby a covered person with specific health
care needs is identified and a plan which efficiently utilizes
health care resources is designed and implemented to achieve
the optimum patient outcome in the most cost-effective manner.
Certificate
of Coverage - a document given to an insured that
describes the benefits, limitations and exclusions of coverage
provided by an insurance company.
Claim
- Information a medical provider or insured submits to an
insurance company to request payment for medical services
provided to the insured.
Coinsurance
- The portion of covered health care costs for which the covered
person has a financial responsibility, usually a fixed percentage.
Coinsurance usually applies after the insured meets
his/her deductible.
Consolidated
Omnibus Budget Reconciliation Act (COBRA)
- a federal law that, among other things, requires
employers to offer continued health insurance coverage to
certain employees and their beneficiaries whose group health
insurance has been terminated if they undergo a triggering
event.
Contract
Year - the period of time from the effective date
of the contract to the expiration date of the contract.
Coordination
of Benefits (COB) - a provision in the contract
that applies when a person is covered under more than one
medical plan. It requires that payment of benefits be coordinated
by all plans to eliminate overinsurance or duplication of
benefits.
Copayment
- a cost-sharing arrangement in which an insured pays a specified
charge for a specified service, such as $25 for an office
visit. The insured is usually responsible for payment at the
time the service is rendered. This charge may be in
addition to certain coinsurance and deductible payments.
Covered
Person - an individual
who meets eligibility requirements and for whom premium payments
are paid for specified benefits of the contractual agreement.
Covered
expenses - services for which the health
insurance makes either a full or partial payment.
D
Deductible
- the amount of eligible expenses a covered person must pay
each year from his/her own pocket before the plan will make
payment for eligible benefits.
Deductible
Carry Over Credit - charges applied to the deductible
for services during the last 3 months of a calendar year which
may be used to satisfy the following year’s deductible.
Dependent
- a covered person who relies on another person for support
or obtains health coverage through a spouse, parent or grandparent
who is the covered person under a plan.
E
Effective
Date
- the date insurance coverage begins.
Eligible
Dependent
-
a dependent of a covered person (spouse, child, or other dependent)
who meets all requirements specified in the contract to qualify
for coverage and for who premium payment is made.
Eligible
Expenses - the lower of the reasonable and customary
charges or the agreed upon health services fee for health
services and supplies covered under a health plan.
Emergency:
the sudden, and at the time, unexpected onset of a health
condition that requires immediate medical attention where
failure to provide medical attention would result in serious
impairment to bodily functions or serious dysfunction of a
bodily organ or part, or would place the person’s health
in serious jeopardy.
Explanation
of Benefits (EOB)
- the statement sent to an insured by their health insurance
company listing services provided, amount billed, eligible
expenses and payment made by the health insurance company.
F
Formulary
-
a list of particular prescription drugs for which an insurer
provides additional coverage or a lower copay.
H
Health
Savings Account - special plans in which
money can be deposited into a tax-deferred health savings
account from which you can withdraw money on a pre-tax basis
for qualified medical care and expenses.
I
Insured
- a person who has obtained health insurance coverage
under a health insurance plan.
L
Lifetime
limit - the total maximum the policy will
pay. Most plans have at least $1 million, and many have
$2- to $5 million in lifetime coverage.
M
Managed
Care
- a health care system under which physicians, hospitals,
and other health care professionals are organized into a group
or “network” in order to manage the cost, quality
and access to health care. Managed care organizations
include Preferred Provider Organizations (PPOs) and Health
Maintenance Organizations (HMOs).
N
Network
- doctors, hospitals, and other medical
providers that are contracted to provide services for a particular
plan. PPO members have less out-of-pocket expense when
they use network providers.
O
Out-of-Pocket
Maximum - the total payments that must be paid
by a covered person (i.e., deductibles and coinsurance) as
defined by the contract. Once this limit is reached,
covered health services are paid at 100% for health services
received during the rest of that calendar year.
Outpatient
medical care: non-surgical
services provided in a provider’s office, the outpatient
department of a hospital or other facility, or the member’s
home.
P
Participating
Provider - a medical
provider who has been contracted to render medical services
or supplies to insureds at a pre-negotiated fee. Providers
include hospitals, physicians, and other medical facilities.
Physician:
A doctor of medicine or osteopathy who is licensed to practice
medicine under the laws of the state or jurisdiction where
the services are provided.
Pre-existing
condition - a health problem that existed
before your coverage went into effect. Many plans won't
cover preexisting conditions.
Preferred
Provider Organization (PPO)
- a health care delivery arrangement which offers insureds
access to participating providers at reduced costs. PPOs
provide insureds incentives, such as lower deductibles and
copayments, to use providers in the network. Network
providers agree to negotiated fees in exchange for their preferred
provider status.
Premium
- the amount you pay (usually monthly) for your insurance.
Preventive
care:
comprehensive care that emphasizes prevention, early detection
and early treatment of conditions through routine physical
exams, immunizations and health education.
Provider
- a physician, hospital, health professional and
other entity or institutional health care provider that provides
a health care service.
Primary
Care Physician (PCP) - a physician that is responsible
for providing, prescribing, authorizing and coordinating all
medical care and treatment. Note: PPOs typically allow
you to go to any doctor in the network, and do not require
that you consult with a PCP.
Prescription
drugs:
prescription
drugs include:
- Brand
name prescription drug: the initial version of a medication
developed by a pharmaceutical manufacturer or a version
marketed under a pharmaceutical manufacturer's own registered
trade name or trademark.
- Legend
drug: a medicinal substance, dispensed for outpatient
use, which under the Federal Food, Drug & Cosmetic Act
is required to bear on its original packing label, “Caution:
Federal law prohibits dispensing without a prescription.”
- Formulary:
a list of pharmaceutical products developed in consultation
with physicians and pharmacists and approved for their quality
and cost effectiveness.
- Generic
prescription drug: drugs determined by the FDA to be
bio-equivalent to brand name drugs and that are not manufactured
or marketed under a registered trade name or trademark.
R
Reasonable
and Customary (R &C)
- a term used to refer to the commonly charged or prevailing
fees for health services within a geographic area. A
fee is generally considered to be reasonable if it falls within
the parameters of the average or commonly charged fee for
the particular service within that specific community. Note:
charges within a PPO network are not normally limited to reasonable
and customary fees.
U
Underwriting
- the act of reviewing and evaluating prospective insureds
for risk assessment and appropriate premium.
Usual
and customary charge - the amount a plan
will pay for a particular procedure, usually based on a prevailing
average.
W
Well-child
visit:
a physician visit that includes the following components:
an age-appropriate physical exam, history, anticipatory guidance
and education (e.g., examining family functioning and dynamics,
injury prevention counseling, discussing dietary issues, reviewing
age-appropriate behaviors, etc.), and assessment of growth
and development. For older children, a well-child visit
also includes safety and health education counseling.
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