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Deductible: the amount of eligible expense a covered person must pay each year out of pocket before the plan will make payment for eligible benefits.
Coinsurance: the portion of covered health care costs the covered person is financially responsible for, usually according to a fixed percentage. Coinsurance often is applied, according to a fixed percentage, after a deductible requirement is met.
Co-payment: amount the member pays at the time a service is rendered. Copayments do not apply toward deductible. Services are not subject to deductible.
Out of Pocket expenses: the portion of payments for covered health services required to be paid by the enrollee, coinsurance and deductibles. Typically co-payments do not accure to the out-of-pocket expense.
Preferred Provider Organization (PPO): a program that establishes contracts with providers of medical care. Providers under such contracts are referred to as preferred providers. Usually, the benefit contract provides significantly better benefits and lower member cost for services received from preferred providers, thus encouraging covered persons to use these providers, however members may see non-participating providers’ usually based on an indemnity basis.
Health Maintenance Organization (HMO): an entity that provides offers or arranges for coverage of designated health services needed by plan members for a fixed, prepaid premium.
Health Savings Account: a health insurance option having two parts. The first part is a high deductible health plan that covers large hospital bills. The second part of the Health Savings Account is an investment account or retirement account from which you can withdraw money tax-free for medical care. Otherwise the money accumulates with tax-free interest until retirement, when you can withdraw for any purpose and pay normal income taxes.
Indemnity: a plan of insurance that reimburses members, physicians, hospitals or other facilities based on billed charges in accordance with "reasonable and customary" expense guidelines.
Consolidated Omnibus Budget Reconciliation Act (COBRA): a federal law that requires employers to offer continued health insurance coverage to certain employees and their beneficiaries whose group health insurance coverage has been terminated.
Health Insurance Portability and Accountability Act (HIPPA): a federal law intended to improve the availability and continuity of health insurance coverage that, among other things, places limits on exclusions for pre-existing medical conditions; permits certain individuals to enroll for available group health care coverage when they lose other health care coverage or have a new dependent; prohibits discrimination in group enrollment based on health status; guarantees the availability of health coverage to small employers and the renewablity of health insurance coverage in the small and large group markets; and requires availability of non-group coverage for certain individuals whose group coverage is terminated.
Pre-existing condition: any medical condition that has been diagnosed or treated within a specified period immediately preceding the covered person’s effective date of coverage. May not be covered for some specified amount of time as defined in the certificate of coverage.
Coordination of benefits: a provision in a contract that applies when a person is covered under more than one group medical program.
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These are some of the most commonly used terms you encounter when you address healthcare coverage. We want to share them with you, if you understand the jargon, we know that you will better navigate your way through a healthcare proposal. For answers to other questions you might have........ please contact an associate at Greenway & Associates. An expanded list can be found under glossary, on the FAQS page on our website.
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