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The following is a list of Health Insurance terms to help you understand your medical coverage and make the best buying decision. Note: The following should not be construed as legal definitions for federal or state statutory or regulatory terms. The brief explanation are in plain language to help you understand the health insurance plans. Cafeteria Plan Also known as a Section 125 Plan, this is a plan sponsored by a company for its’ employees. This allows an employee to pay for certain items on a pre-tax basis. Included are medical premiums paid by the employee, qualified medical expenses, dependent day care, term life insurance, disability insurance, supplemental medical plans (ie cancer and accident plans). This could potentially save hundreds or thousands of dollars for an employee. COBRA or Continuation Coverage COBRA Continuation Coverage is medical coverage that is offered in order to satisfy the requirements of the Consolidated Omnibus Budget Reconciliation Act or 1985. COBRA requires employers to permit employees and their family members to continue their group medical coverage at their own expense, but at group rates, if they lose coverage because of a loss of employment, reduction in hours, divorce, death of the supporting spouse, or other designated events. Employees and/or their dependents have the opportunity to purchase and maintain the same group medical coverage for a period of time (generally 18, 29 or 36 months) under certain conditions. All companies who have had on average more than 20 full-time employees over the last calendar year must comply with COBRA. After exhausting their COBRA coverage, that person(s) are eligible for a HIPAA individual health plan. Co-Insurance The amount you are required to pay for medical care after you satisfy the annual deductible, if any. It is usually expressed as a percentage of billed charges. For example, if the insurance company pays 80% of the claim, you pay 20%. Co-pay A specific charge you pay for a specific medical service. For example, you may pay only $15 for a doctor office visit or $20 for a prescription drug and the insurance company pays for the remaining charges. Deductible The amount each covered person pays for covered expenses first, before the insurance plan begins to pay benefits. Deductibles can apply to all services or limited types of services. Not all plans require or include a deductible. Exclusion(s) A specific condition(s) or circumstances(s) for which the policy will not provide or cover. Fee-for-Service A method of charging for each visit or service. This method is arranged between a physician and the insurance company. Formulary Prescription This is a “brand name” drug on a preferred list and no generic substitute is available. The preferred list can vary by insurance company. Generic Prescription Prescription drug that is typically lower in cost and is a substitute for a “brand name” prescription. Group Medical Plan Medical insurance plan issued to a company or association for the benefit of qualifying members or employees. Minimum of 2 active full time employees are required to qualify for a group plan. HIPAA HIPAA (Health Insurance Portability and Accountability Act) plan. HMO (Health Maintenance Organization) Network of doctors , hospitals, labs and other medical providers designated to provided medical services. To receive benefits, you must first see your Primary Care Physician. If your PCP believes you need to see a specialist you will receive a referral. If you see a specialist without a referral, the insurance company will deny the claim and you will be responsible for those claims. Your choice of providers is restricted to those in the HMO network. Individual Medical Plan Medical plan that covers a single person or family. Lifetime Maximum Maximum amount of benefits available to a member during their lifetime. All benefits furnished are subject to this maximum unless stated as unlimited. List Bill Medical Plan Multiple individual medical plans within a company or association. One bill is submitted to the company by the insurance company on behalf of all persons participating with the policy. Major Medical Plan In most cases, this is a Health Plan that covers hospital and surgical expenses only. No co-pays or emergency room coverage, unless added on as options. Medicaid State programs of public assistance to individuals regardless of age whose income and resources are insufficient to pay for health care. Medicare Medical coverage and services provided by Social Security. This is offered to Medicare Supplement Plan A health insurance plan to supplement medical cost after Medicare coverage. Guarantee issue plans are available to those who apply within the appropriate time periods. MSA (Medical Savings Account) This is a tax-advantaged personal savings account used in conjunction with a high deductible health policy. Individuals can contribute money to this account on a pre-tax basis to set aside money for qualified medical care and expenses. This includes annual deductibles, co-insurance, co-pays and numerous other medical related expenses typically not covered by health insurance (ie. dental expenses, eye exams, eyeglasses, chiropractor expenses, etc…). Available to self employed business owners and small businesses with 50 or fewer employees. Network This is a designated list of doctors, hospitals and medical providers available to insured members. To be put in the Network, these doctors, hospitals and medical providers agree to a set fee schedule for medical procedures. Non-Formulary Prescription This is typically an expensive medication is not on a preferred list. Because of the high cost, the insurance company is requiring the patient to participate more in the cost (ie higher co-pay). Out-of-Pocket Maximum The most money a covered person will pay during a calendar year before the insurance company begins paying 100% of the covered expenses for the remainder of the year. Only covered expenses count toward the maximum. For example, any charges above the limited fee schedule for out of network doctor’s services do not count. Participation Requirement This relates to group medical plans. A minimum percentage of eligible employees are required to enroll in the medical plan. This percentage varies, typically 75% of eligible employees needs to enroll in the group medical plan. An employee with medical coverage with a spouse would not be considered in the eligible percentage. PPO (Preferred Provider Organization) A PPO plan has agreements with doctors, hospitals and other medical providers that have agreed to accept typically discounted fees from the insurance companies for their services. PPO covered members have open access to all doctors and specialist including those outside of the PPO network. If you seek services from a non-network provider you will have more out-of-pocket than if a PPO network provider was utilized. Pre-Existing Condition A health problem that existed or was treated before the date your insurance policy became effective. Most health insurance policies have a pre-existing condition clause that describes the conditions of coverage for ongoing treatment of all pre-existing condition(s). POS (Point of Service Plan) A type of managed care plan. Benefits vary depending on whether the insured receives in-network or out-of-network care. A POS plan contracts with certain practitioners who offer services at a reduced rate. These providers are referred to as a network. The insured picks... Primary Care Physician (PCP) Under a HMO (Health Maintenance Organization) or POS (Point of Service Plan) a PCP is usually the first contact for health care. This is often a family physician , internist, or pediatrician. PCP’s make referrals to specialists if necessary. Provider Any person (ie. doctor or nurse) or institution (ie. hospital, clinic, lab, etc…) that provides medical care. Section 125 Plan Also known as a Cafeteria Plan, this is a plan sponsored by a company for its’ employees. Short-Term Medical Plan These type of plans offer coverage for a minimum of 30 days up to 3 years. The application process is very simple and most individuals qualify. Coverage can start as soon as one day after mailing the application. These plans are often used for coverage until another medical plan begins. Well Baby Care Preventative health services, including immunizations, provided by the member’s medical group to children up to an age specified by the insurance company. This benefit is typically provided in HMO’s and POS plans. The level of benefit will vary for PPO’s if specified as a benefit. Copyright 2002-2003 St. Louis Benefits Group. All rights reserved. | ||||||||||||||||
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