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Glossary
With so much terminology, navigating through the insurance world can be tricky for anyone. To help you know exactly what you're getting when you buy insurance, InsuredAtLast.com has created this glossary of the most common health insurance terms.
B
Brand Name Prescription Drug
A patent protected drug marketed and supplied by a single manufacturer. Generally, much more expensive than generic prescription drugs.
C
COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985)
Not an insurance plan, but a law passed requiring employers, under certain qualifying events, to offer temporary group health coverage to employees after they leave their jobs. COBRA participants must pay the entire premium themselves.
Coinsurance
The percentage that the insured person must pay at the time of service, for that particular service. It does not apply towards the co-payment or deductible.
Co-payment (Co-pay)
The specific dollar amount that the insured person must pay at the time of service, for that particular service. The co-payment does not apply towards the deductible or coinsurance.
D
Deductible
The amount that the insured person must pay before the health insurance company will begin to pay. Typically a fixed amount. It must be paid each year and may increase yearly.
Dependents
Any person who relies on the insured as the primary source of income. Usually a minor child or spouse.
E
Evidence of Insurability
Proof of a person's age, occupation, current and past health conditions, etc. that affect if a person is eligible for a health insurance plan
F
Fee For Service (FFS) Plan
Also known as a traditional Indemnity plan, it is coverage in which health care providers receive a fee for each service provided. Allows the insured to see any health care provider without authorization and offers reimbursement for any covered medical expense.
Flexible Spending Account (FSA)
A savings account administered by an employer which allows employees to set aside pretax income to pay for medical expenses. Funds deposited into an FSA must be used before the end of the year or they are lost.
G
Generic Prescription Drug
A copy of a brand name drug developed after the original's patent has expired. Generics use the same active ingredients as their brand name counterparts and have the same benefits and side effects. Generally, much cheaper than brand name drugs.
Group Insurance Plan
Health insurance coverage offered by an employer to employees. Usually does not require evidence of insurability.
H
Health Maintenance Organization (HMO)
A managed care organization which provides comprehensive healthcare to enrollees from a network of physicians, hospital and clinics. Emphasizes preventative treatment. Members must prepay for the service through a periodic fee (often deducted from each paycheck). Members generally access the medical network through a Primary Care Physician, who manages the member's general health needs and provides referrals to specialists within the network.
Health Savings Account (HSA)
A savings or investment account used primarily for the payment of medical expenses. To be eligible, an individual may not be claimed as a dependent, is not entitled to Medicare benefits, and must enroll in a High Deductible Health Plan (HDHP). Funds in the HSA are used at the individual's discretion, while unused funds remain in the account and accrue yearly interest, tax-free.
High Deductible Health Plan (HDHP)
A health insurance plan with a deductible of at least $1,100 for individuals and $2,200 for families. An individual must have an HDHP in order to be eligible for a Health Savings Account (HSA). Typically has a lower premium than plans with lower deductibles.
I
Indemnity Plan
In-Network Provider
A health care provider who has contracted with the health insurance company to provide specific medical services at discounted prices. Typically, if an insured person visits an in-network provider, they are responsible for paying less than if they visited an out-of-network provider. PPO, POS, and HMO plans generally use provider networks.
Individual Health Insurance
Health insurance coverage purchased by an individual from an insurance agent, rather than through an employer. May require a medical examination or other evidence of insurability.
M
Medicaid
A health program for low-income individuals and families sponsored by federal and state governments. Eligibility requirements vary from state to state.
Medicare
A government sponsored program that administers health care to people over 65, some disabled people under 65, and people with end-stage renal disease. It is the largest health insurance program in the US.
O
Out-of-Network Provider
A health care provider who is not contracted with the insured's specific health insurance plan. The insured may incur large out-of-pocket expenses with these providers. PPO, POS, and HMO plans generally use provider networks.
P
Point of Service (POS) Plan
A managed healthcare plan offering features of both the Health Maintenance Organization (HMO) and the Preferred Provider Organization (PPO). Like the HMO, members must choose a Primary Care Physician (PCP) and receive coverage for preventative care. Like a PPO, members also receive some coverage when visiting an out-of-network provider.
Preferred Provider Organization (PPO)
A managed care organization which offers coverage to both in-network and out-of-network providers, though services by an out-of-network provider is typically covered at a lower percentage than an in-network provider. The insured is not required to choose a Primary Care Physician (PCP) and may decide themselves to see a specialist at any time.
Premium
The monthly rate charged by an insurance company for active coverage.
Primary Care Physician (PCP)
A family practice doctor, internist, pediatrician, and/or OB/GYN who addresses the majority of the insured's healthcare needs, from treating minor illnesses to managing chronic diseases. They often act as a "gatekeeper" in health plans, authorizing specialist referrals. Members of Health Maintenance Organizations (HMO) and Point of Service (POS) plans must select a Primary Care Physician.
Provider
A doctor, health care practitioner, pharmacy, hospital, or health care facility.
U
Usual, Customary, and Reasonable (UCR) Charges
The amount covered based on the provider's normal fee, the geographic area of the provider, and the circumstances of the service. Fee For Service (FFS) plans are often based on UCR charges.