BENEFITS & HR GLOSSARY
Actuary – a mathematician in the insurance field. Responsible for calculating premiums, developing plans and defining underwriting risk.
Agent – a licensed individual who represents several different insurance companies and sells their products.
Benefit – reimbursement for covered medical expenses as specified by the plan.
Brand name drug – prescription drug that is marketed with a specific brand name by a company that manufactures it. May cost individuals a higher co-pay than a generic prescription.
Broker – a licensed insurance professional who obtains multiple quotes and plan information in the interest of the client.
Carrier – Insurance company or HMO insuring the health plan.
Certificate booklet – The plan agreement. A printed description of the benefits and coverage provisions intended to explain the contractual arrangement between the carrier and the insured group or individual. May also be referred to as a policy booklet.
Claim – a formal request made by the insured person for the benefit provided by a policy.
COBRA (Consolidated Omnibus Budget Reconciliation Act) – Federal legislation that requires group health plans members the opportunity to purchase the continued coverage in the event of their termination of their employment.
Co-insurance – the percentage of the covered expenses a insured individual shares with the carrier.
Co-pay/co-payment – The amount the insured individual must pay toward the cost of a particular benefit. For example, a plan may require a $30 co-payment for a doctor visit.
Credit for prior coverage – any pre-existing waiting periods met under an employer’s prior coverage will be credited to the current plan, if any interruption of coverage between the new and prior meets state guidelines.
Deductible – the dollar amount the insured individual may pay for the covered expenses during a calendar year before the plans starts paying co-insurance benefits.
Dependents – usually the spouse and unmarried children of an employee.
Effective date – the date requested by the employer for the insurance coverage to begin.
Exclusions – expenses which are not covered under an insurance plan.
Explanation of benefits – a carriers written response to a claim for benefits.
Generic drug – the chemical equivalent to a brand name drug. These drugs cost less and the savings are passed onto the individual member
Group insurance – an insurance contract made between an employer or other entity that covers the individual in the group.
HIPPA - Health Insurance Portability Accountability Act of 1996 – this law relates to the underwriting, pre-existing limitations, guaranteed renewal, COBRA and certification requirements of someone in the event of lose of coverage.
Identification Card – ID card – card given to the insured individuals which advises medical professionals that a patient is covered by a particular health insurance plan.
In-network – describes a provider or health cary facility which is part of a health plans network. Lifetime maximum benefit – the maximum amount a health plan will pay in benefits to an insured individual.
Limitations – a restriction in the amount of benefits paid out for a particular covered expense.
Long Term disability (LTD) – insurance which pays employees a percentage of monthly earnings in the event of a disability.
Managed care – the coordination of health care in the attempt to produce high quality health care for the lowest possible cost. Examples are the use of a primary care physician as a gatekeeper to HMO plans.
Multiple employer trust (MET) – an arrangement created to obtain health insurance and other benefits for a particular employer group. Small employers can pool their contribution to receive the advantages of a large group.
Network – a group of doctors, hospitals, and other facilities contracted to provide services to insured individuals for less than their usual fees.
Out of Network – describes a provider or health care facility which is not part of a health plans network.
Out of pocket maximum – the total of an insured copayments and co-insurance payments.
Plan Administrator – overseeing the details and routines activities of installing and running a health plan, such as answering questions, enrolling new individuals for coverage, billing and collecting premiums.
Point of Service (POS) – health plans that allow enrollees to choose HMO, PPOI or indemnity coverage, at the point of service (time when services are received).
Pre-Certification / pre-authorization – Pre-admission review and approval of appropriations and medical necessity of hospitalization, medical treatment or prescription drugs.
Pre-Existing Condition – an illness, injury or condition for which the insured individual receives medical advice, treatment, services or supplies had diagnostic test done or recommended, had medicines prescribed or recommended, or had symptoms of typically within 6 or 12 months prior to coverage beginning.
Preferred Provider Organization (PPO) – a network or panel of physicians, hospitals that agree to discount its normal fees in exchange for a higher volume of patients.
Premiums – payments to an insurance company providing coverage.
Provider – any person or entity providing health care services including hospital, physicians, home health agencies and nursing homes. Usually licensed by the state.
Referral – within many managed care systems transfer to specialty physician or specialty care by a primary care physician.
Rider – a modification to a certificate of insurance policy regarding clauses and provision of the policy.
Risk – uncertainty of financial loss.
Small Employer Group – groups with 1-99 employees. This definition can vary between states.
State Mandated Benefits – state laws requiring that commercial health insurance plans include3 specific benefits.
Stop Loss – the dollar amount of claims filed for eligible expenses at which the insurance begins to pay 100% per insured individuals. The stop loss is reached when an insured individual has paid his deductible and reach their out of pocket maximum.
Underwriter – entity that assumes the responsibility of the risk, issues insurance policies and receives premiums.
Waiver of Coverage – a section on the enrollment form which states that an employee was offered insurance but opted to waive coverage.