FAQ's 

Glossary

Health Insurance Glossary and Terms
    

Trying to figure out everything that is on your insurance policy can feel like trying to read a new language. Having an illness or non-work related injury is devastating enough, trying to figure out what is covered and what is not can be a whole other picnic. Especially when prices on health care are continually increasing. Even though managed care can really save some people serious money, you have to know what each term means and how it works in your specific plan. If you have a group plan from your employer you are generally paying much less than if on your own, but do you really know what that plan really "says" or what it offers and covers? You can actually get better coverage for less money with your own private plan once you better understand the medical lingo used. This is where I can tremendously aid you by taking complicated verbage and put it in terms that you can easily understand, so again feel free to contact me when a policy is difficult to read due to the industry's unique vocabulary.

The whole point of health insurance is to pay for the accumulating cost of exams, diagnostics, and treatments of any particular health issue you may have. There are several coverage options when it comes to what kind of health care plan you have or want. Try to pick a plan that best meets your specific needs and fits within your budget, this is the best way to save money; you do not pay for coverages you do not necessarily need. Also, don't ever feel inept if you do not understand what an agent or policy says. I want you to feel completely comfortable in contacting me at any time to address these questions and concerns or clarify an issue that is confusing. It is completely your right and acceptable to ask what things mean if you do not know. It is also much to your advantage to understand your specific coverage details in advance prior to receiving your bill; after the bill arrives is not a good time to have to decipher what you are paying for, and no one likes unexpected surprises. The more familiar with the types of plans available and learning their specific advantages and disadvantages will help you best determine what works for you.

TYPES OF POLICIES:

ý         Indemnity Policies (Traditional Fee-for-Service Insurance)

ý         Preferred Provider Organizations (PPOs)

ý         Health Maintenance Organizations (HMOs)

ý         Point of Service Plans (POSs) 

ý         Self-Insured Health Plans (Single Employer Self-Insured Plans)

HEALTH INSURANCE TERMS:

Assignment of Benefits: Your signed authorizations to give your doctor or hospital (medical provider) direct payment to them for your medical treatment. This means you do not see the money and don't have to pay at the time of service more than your co-pay.

Business Day: Every day that insurance companies are open for business, which excludes Saturday, Sunday, and state and federal holidays. These tend to be from Monday to Friday from 8-9 AM to 4-5 PM their local time.

Calendar Day: Every day of the calendar month, which includes Saturday, Sunday, and state and federal holidays. If something happens on a Saturday, Sunday, or holiday you will be able to call in a claim but it will not be recorded till the next business day.

Certificate of Coverage: The document you get that tells you that you are a member of the group and hold a policy.

Certificate of Creditable Coverage: A written statement from your previous insurance company and/or health plan stating the length of time you were covered with them.

Claim: A notification to your insurance company that payment is due under the policy provisions.

Co-Insurance: Refers to money that an individual is required to pay for services, after a deductible has been paid. In some health care plans, co-insurance is called "co-payment." Co-insurance is often specified by a percentage. For example, the employee pays 20 percent toward the charges for a service and the employer or insurance company pays 80 percent.

Co-payment:  A predetermined flat fee that an individual pays for health care services, in addition to what the insurance covers. For each office visit, regardless of the type or level of services provided during the visit.

Coverage: The actual details of protection provided by an insurance contract.

Covered Expenses: What the insurance company will consider paying for as defined in the contract. For example, under some plans generic prescriptions are covered expenses, while brand name prescriptions may be covered at a different reimbursement rate or not at all.

Deductible: The amount an individual must pay for health care expenses that an insured individual must pay before benefits are paid by the insurance plan. Most insurance plans are based on yearly deductible amounts.

Denial: An insurance company's decision to withhold a claim payment or demand a preauthorization. A denial may be made because the medical service is not covered, not medically necessary, or experimental or investigational.

Dependents: Spouse and/or unmarried children (whether natural, adopted or step) of an insured person.

Exclusions and/or Limitations: Conditions or circumstances spelled out in an insurance policy that limit or exclude coverage benefits. It is important to read all exclusion, limitation, and reduction clauses in your health insurance policy or certificate of coverage to determine which expenses are not covered.

Experimental and/or Investigational Medical Services: A drug, device, procedure, treatment plan, or other therapy, which is currently not within the accepted standards of medical care. These items are more than likely not covered.

Grace Period: A specified period immediately following the premium due date during which a payment can be made to continue a policy without interruption. This applies only to Life and Health policies. Check your policy to be sure that a grace period is offered and how many days, if any, are allowed.

Group Insurance: Coverage through an employer or other entity that offers to cover all individuals who are eligible in the group.

Health Maintenance Organizations (HMO's): HMOs provide medical treatment on a prepaid basis, which means that HMO members pay a fixed monthly fee, regardless of how much medical care is needed in a given month. In return for this fee, most HMOs provide a wide variety of medical services, from office visits to hospitalization and surgery. With a few exceptions, HMO members must receive their medical treatment from physicians and facilities within the HMO network. The size of this network varies depending on the individual HMO.

 When you join an HMO, you choose a primary care physician (PCP) who is your first contact for all medical care needs. The primary care physician provides your general medical care and must be consulted before you can see a specialist. Because of this control system, HMO costs tend to increase less rapidly than other insurance plans.

 Independent Medical Review: A process where expert medical professionals who have no relationship to your health insurance company or health plan review specific medical decisions made by the insurance company.

Lifetime Maximum Benefit: The maximum amount a health plan will pay in benefits to an insured individual during that individual's lifetime.  Usually in the millions.

Medically Necessary: A drug, device, procedure, treatment, or other therapy that is covered under your health insurance policy and that your doctor, hospital, or provider has determined essential for your medical well-being, specific illness, or underlying condition.

Open Enrollment: A specified period of time in which employees may change insurance plans and medical groups offered by their employer, without proof of insurability. Open enrollment usually occurs once a year and is determined by the employer.

Out-of-Pocket Maximum: The most money you can expect to pay for covered expenses. The maximum limit varies from plan to plan. Some companies count deductibles, co-insurance, or co-payments toward the limit, others don't. Once the maximum out-of-pocket has been met, many health plans pay 100% of certain covered expenses. Most plans have an out of pocket maximum for in-network health providers and a separate out of pocket maximum for out-of-network medical care providers. Some plans require BOTH your in-network and out-of-network out of pocket maximums to be met before your out of network coverage becomes active.

Point-of-Service Plan (POS) - Health plan which allows the enrollee to choose HMO, PPO or indemnity coverage at the point of service (time the services are received).

Policy: The written contract between an individual or group policyholder and an insurance company. The policy outlines the duties, obligations, and responsibilities of both the policyholder and the insurance company. A policy may include any application, endorsement, certificate, or any other document that can describe, limit, or exclude coverage benefits under the policy.

Pre-Existing Condition: Unfortunately, there's no clear-cut definition of this term; each insurance company has a different way of looking at it. Generally speaking, it's a medical condition that was first treated or has manifested itself prior to your enrollment in a plan. Some plans completely exclude pre-existing conditions from coverage; others may have a waiting period of six months to a year. You should check the plan carefully or talk to your insurance agent if you think you may have such a condition.

Preferred provider Organizations (PPO'S): You or your employer receives discounted rates if you use doctors from a pre-selected group, or in-network. If you use a physician outside the PPO plan, you must pay more for the medical care.

Premium: The money paid to an insurance company for coverage. Premiums are typically paid monthly, or semi-annually.

Small Employer Group: Generally means groups with 1-99 employees. The definition may vary between states. My company only handles insurance and quotes for companies with 4 or more employees.

Stop-loss: The dollar amount of claims filed for eligible expenses at which point you've paid 100 percent of your out-of-pocket and the insurance begins to pay at 100 percent. Stop-loss is reached when an insured individual has paid the deductible and reached the out-of-pocket maximum amount of co-insurance.