Glossary

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Accident-Only Policies: Policies that pay only in cases arising from an accident or injury.

Acute Care: Medical care for an episode of injury or an illness.

Agent: A person who represents an insurance company and solicits or sells the company’s insurance products. An agent may represent a single company or multiple companies.

Alabama Breast and Cervical Cancer Treatment Program: Program that provides free screening for breast and cervical cancer to eligible Alabama residents. Women diagnosed with breast or cervical cancer may be eligible for free coverage through Medicaid for treatment of their condition.

Affiliation Period: The time an HMO (Health Maintenance Organization) may require you to wait after you enroll and before your coverage begins. HMOs that require an affiliation period cannot exclude coverage of pre-existing conditions. Premiums cannot be charged during HMO affiliation periods. See also HMO.

Alabama Health Insurance Plan: A state-run health insurance program for people who are eligible under HIPAA (Health Insurance Portability and Accountability Act).

ALL Kids: A state-run health insurance program for children under the age of 19 whose families meet financial eligibility criteria. ALL Kids provides comprehensive benefits and has no pre-existing condition exclusions. Depending on your financial situation, ALL Kids may be free or may have very modest cost-sharing requirements.

Allied Health Care Providers: Specially trained health care professionals other than physicians. Allied health care providers include optometrists, chiropractors, podiatrists, and nurse practitioners.

Allowable Charges: The specific dollar amount of a medical bill that Medicare, Medicaid, or your health plan will pay.

Alternative Trade Adjustment Assistance (ATAA) Program: A benefit for workers at least 50 years old who have obtained different, full-time employment within 26 weeks of the termination of adversely affected employment. These workers may receive 50% of the wage differential (up to $10,000) during their 2 year eligibility period. To be eligible for ATAA benefits, workers cannot earn more than $50,000 per year in their new employment. Also, the firm where the workers worked must meet certain eligibility criteria.

Ambulatory Care: Medical care for an injury or an illness that can be provided on an outpatient basis.

Ancillary Services: Special services ordered by your physician, such as laboratory, radiology, durable medical equipment, and pharmacy services.

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Capitation: A payment method in which the provider agrees to provide all the care you may need in return for a fixed monthly payment by your health plan company.

Case Management: Coordination of your health care services and providers when you have a serious accident or injury or chronic illness. Case management allows your health plan to coordinate your treatment.

Certificate of Coverage: A document you receive from your health plan that explains what health care services your plan will pay for, what services you may have to pay for, and what rules you must follow to receive services.

Certificate of Creditable Coverage. A document provided by your health plan that lets you prove you had coverage under that plan. These certificates will usually be provided automatically to you when you leave a health plan. You can obtain certificates at other times as well. See also Creditable Coverage.

Chronic Illness: An illness that lasts a long time or an illness that will never be cured, such as diabetes and arthritis.

Claim: A request that you or your health care provider makes to the health plan to pay for a health care service provided to you. Most health plans require claims to be in writing. Health plans require claims to be on a specific standard form.

Closed Practice: A primary care physician who is not accepting new patients. Note: Even if your physician is on the HMO (Health Maintenance Organization) or PPO (Preferred Provider Organization) list, call to see if the practice is still open for accepting new HMO or PPO participants.

Co-insurance: The amount you are required to pay for medical care in a fee-for-service plan after you have met your deductible. The coinsurance rate is usually expressed as a percentage. For example, if the insurance company pays 80% of the claim, then you pay 20%.

Community Health Center: A clinic designated by the United States Public Health Service to provide health services in a neighborhood because of needs in that neighborhood. (Also known as a Federally Qualified Health Center.)

Consolidated Omnibus Budget Reconciliation Act (COBRA): A federal law in effect since 1986. COBRA permits you and your dependents to continue in your employer’s group health plan after your job ends. If your employer has 20 or more employees, you may be eligible for COBRA continuation coverage when you retire, quit, are fired, or work reduced hours. Continuation coverage also extends to surviving, divorced, or separated spouses; dependent children; and children who lose their dependent status under the rules of their parent’s plan. You may choose to continue in the group health plan for a limited time and pay the full premium, including the share your employer used to pay on your behalf. COBRA continuation coverage generally lasts 18 months, or 36 months for dependents in certain circumstances.

Consumer Choice Plans: Health care plans offered by carriers that do not include all of the state-mandated benefits. Consumer choice plans must provide members with a disclosure statement and a list describing the state-mandated benefits that are not covered.

Continuous Coverage: Under federal rules, health insurance coverage that is not interrupted by a break of 63 or more consecutive days. Employer waiting periods and HMO (Health Maintenance Organization) affiliation periods do not count as gaps in health insurance coverage for the purpose of determining whether coverage is continuous. See also Creditable Coverage and HIPAA Eligible.

Coordination of Benefits (COB): Rules and procedures that determine how health care claims are paid when you are covered by more than one health insurance plan. Together, the health plans cannot pay more than the charge for the services.

Co-payment: A dollar amount that you pay for a covered health care service. For example, your health plan may require that you pay $10 each time you go to the doctor.

Covered Expenses: Most insurance plans, whether they are fee for service, HMOs (Health Maintenance Organizations), or PPOs (Preferred Provider Organizations), do not pay for all services. Some may not pay for prescription drugs. Others may not pay for mental health care. Covered services are those medical procedures the insurer agrees to pay for. They are listed in the policy.

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Deductible: The amount of money you are required to pay for health care services before your health plan starts paying the bill. Not all plans require deductibles.

Disability Benefits: Insurance company coverage that pays for lost wages when you are unable to work because of an illness or injury.

Dread Disease Policies: Policies that pay only if you contract the illness specified in the policy. Also called specified disease policies.

Effective Date: The date on which coverage under an insurance policy begins.

Emergency Care: Health care services provided in a hospital emergency facility or comparable facility to evaluate and stabilize sudden and severe medical conditions.

Emergency Medical Services (EMS): Emergency care provided by ambulance personnel, such as EMTs (emergency medical technicians), paramedics, first responders, or other authorized individuals.

Eligible Employee: An employee who meets the eligibility requirements for coverage in a group plan. To be eligible to join a group plan, you usually must work full time for at least 30 hours a week. Some group plans may require employees to be a certain pay grade or job classification to be eligible for coverage.

Elimination Rider: An amendment in individual health insurance policy contracts that permanently excludes your coverage for a health condition, body part, or body system.

Enrollment Period: The period during which all employees and their dependents can sign up for coverage under an employer group health plan. Besides permitting workers to elect health benefits when first hired, many employers and group health insurers hold an annual enrollment period, during which all employees can enroll in or change health coverage. See also Group Health Plan and Special Enrollment Period.

ERISA Plan: Health plans created under the Employee Retirement and Income Security Act (ERISA) of 1974. These plans are self-funded; that is, claims are paid strictly from employer contributions and employee premiums. ERISA plans are administered by the U.S. Department of Labor. (Also known as a self-funded plan.)

Evidence of Insurability: Proof that you are in good health. Some insurers require you to provide information about your medical history and health status to determine whether they will insure you or whether they will exclude certain coverages.

Exclusions: Charges, services, or supplies that are not covered under an insurance policy.

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Family and Medical Leave Act (FMLA): A federal law that guarantees up to 12 weeks of job-protected leave for certain employees when they need to take time off because of a serious illness, to have or adopt a child, or to care for another family member. When you qualify for leave under the FMLA, you can continue coverage under your group health plan.

Family Practitioner: A physician who provides primary health care for individuals and families.

Federally Qualified Health Center: A clinic designated by the United States Public Health Service to provide health services in a neighborhood because of needs in that neighborhood.

Fee for Service: A health plan that allows you to go to any physician or provider you choose, but requires that you pay for the services and then file claims for reimbursement. (Also known as an indemnity plan.)

Flexible Spending Account (FSA): An account funded by the employee from pre-tax income and is used to pay for medical expenses. The entire annual amount of an FSA must be made available to the employee at the beginning of the year. However, unspent balances must be forfeited to the employer at the end of the year.

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Gatekeeper: A health care provider who determines whether you should see a specialist or receive other non-routine services. The goal of the gatekeeper is to guide the patient to appropriate services while avoiding unnecessary care.

Genetic Information: Includes information about family history or genetic test results indicating your risk of developing a health condition. Health plans cannot consider a condition identified by genetic information to be pre-existing (and therefore excluding coverage for it) unless that health condition has been previously diagnosed by a health professional.

Grievance Procedure: The required appeal process an HMO (Health Maintenance Organization) provides for you to protest a decision regarding medical necessity or claim payment. Insurance companies also may have grievance procedures.

Gross Income: The total of all income of a person during a period, which is subject to tax after considering allowable deductions and credits. Income can include, but is not limited to, the following: compensation for services, including commissions, fringe benefits, etc.; gross income derived from business; pensions; annuities; alimony; interest income from an estate or trust; dividends; rents, interest; royalties; and gains derived from dealings in property.

Gross Salary: Earnings of a person prior to the deduction of income tax.

Group Insurance: A health care plan that is purchased for a group of eligible people, usually by an employer for its employees. In Minnesota, there are two forms of group insurance: small group insurance (for groups of 2–50 individuals) and large group insurance (for groups of 51 or more individuals).

Guaranteed Renewable: Policies that may not be non-renewed or canceled, except in certain cases. An insurer may cancel a guaranteed renewable policy for failure to pay premiums, fraud, or intentional material misrepresentation. It also may cancel your policy if the company formally leaves the individual or group health market.

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Health Coverage Tax Credit (HCTC): A program that can help pay for nearly two thirds of eligible individuals’ health plan premiums. In general, in order to be eligible for the tax credit, you (a) must be receiving Trade Readjustment Allowance (TRA) benefits or (b) will receive TRA benefits once your unemployment benefits are exhausted or (c) are receiving benefits under the Alternative Trade Adjustment Assistance (ATAA) program or (d) are age 55 or older and receiving benefits from the Pension Benefit Guaranty Corporation (PBGC).

Health Insurance: Financial protection against all or part of the medical care costs to treat illness or injury. Health insurance may also include benefits for preventive health care to help you stay healthy.

Health Insurance Portability and Accountability Act (HIPAA) of 1996: A federal law that includes important health insurance provisions, including non-discrimination, guaranteed renewability, guaranteed issue, and limits to benefit exclusions because of pre-existing medical conditions.

Health Maintenance Organization (HMO): A prepaid health plan. You pay a monthly premium and the HMO covers your doctors’ visits, hospital stays, emergency care, surgery, checkups, lab tests, x-rays, and therapy. You must use the doctors and hospitals designated by the HMO.

Health Reimbursement Arrangement (HRA): An alternative to traditional insurance coverage. HRAs are usually paired with a high-deductible health insurance policy; the contribution is tax-deductible. HRA funds may be used to pay out-of-pocket costs (e.g., deductibles, coinsurance, and co-pays). The employer must fund the HRA and consequently may decide if benefits are portable or will roll over from year to year.

Health Savings Account (HSA): An alternative to traditional insurance coverage. HSAs must be paired with a high-deductible health insurance policy; the contribution is tax-deductible. HSA funds may be used to pay out-of-pocket costs (e.g., deductibles, coinsurance, and co-pays). The employer, the employee, or both may fund the plan. HSAs are owned by the employee and are fully portable, and remaining balances roll over from year to year.

Health Status: When used in this guide, refers to your medical condition (both physical and mental illnesses), claims experience, receipt of health care, medical history, genetic information, evidence of insurability (including conditions arising out of acts of domestic violence), and disability. See also Genetic Information.

High-Deductible Health Plan (HDHP): Sometimes referred to as a “catastrophic” health insurance plan, an HDHP is an inexpensive plan that features higher annual deductibles than other traditional insurance plans. Once the annual deductible is met, HDHPs generally cover health care expenses after that. Some HDHPs are eligible for health savings accounts (HSAs) or health reimbursement accounts (HRAs), which can be used to pay the expenses the HDHP does not cover.

High-Risk Pools: In some states, these pools provide a health insurance option for individuals whose poor health creates a barrier to obtaining employer-based coverage. Premiums in high-risk pools are relatively high, and there is often a waiting period before benefits are available. However, many states have non-discrimination laws that eliminate the need for these pools.

Hospice: A facility or program that provides care for a terminally ill patient.

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Indemnity Plan: A health plan that allows you to go to any physician or provider you choose but requires that you pay for the services and then file claims for reimbursement. (Also known as a fee-for-service plan.)

Individual Insurance: A health insurance policy purchased by an individual rather than a group plan purchased by an employer.

Inpatient: A person admitted to a health care facility to receive health care services.

Large Group Health Plan: A plan with more than 50 employees.

Late Enrollment: Enrollment in a health plan at a time other than the regular or a special enrollment period. If you are a late enrollee, you may be subject to a longer pre-existing condition exclusion period. See also Special Enrollment Period.

Lifetime Maximum: The total dollar amount a health care plan will pay over a policyholder’s lifetime.

Long-Term Care Benefits: Coverage that provides help for people when they are unable to care for themselves because of prolonged illness or disability. Benefits are triggered by specific findings of "cognitive impairment" or inability to perform certain actions known as "activities of daily living." Benefits can range from help with daily activities while recuperating at home to skilled nursing care provided in a nursing home.

Look Back: The maximum length of time, immediately prior to enrolling in a health plan, that can be examined for evidence of pre-existing conditions.

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Major Medical Policies: Health care policies that usually cover both hospital stays and physicians´ services in and out of the hospital.

Managed Health Care: A system that organizes physicians, hospitals, and other health care providers into networks with the goal of lowering costs while still providing appropriate medical services. Many managed care systems focus on Preventive care and case management to avoid treating more costly illnesses.

Mandated Offerings: Health care benefits that must be offered to the employer or organization sponsoring a group policy. The sponsor is not required to include the benefits in its group plan.

Maximum Out-of-Pocket Expense: The maximum amount someone covered under a health care plan must pay during a certain period of time for expenses covered by the plan. Until the maximum is reached, the person covered is required to pay a co-payment or a percentage of each claim.

Medically Necessary Care: Health care that results from illness or injury or is otherwise authorized by the health care plan. This term can be defined differently from one health care plan to another.

Medicaid (Title XIX): A health care program for people who meet certain income and other guidelines. Medicaid is paid for by federal and state funds.

Medical Underwriting: A pricing practice used by insurance companies to adjust premiums (usually upward) based on a group’s health status or medical claims experience.

Medical Savings Account (MSA): A tax-deferred account established to pay for medical expenses not covered by an insurance policy.

Medicare (Title XVIII): A federal health insurance program for people over age 65 and for certain people with disabilities.

Medicare Supplemental Insurance: A policy that covers certain medical expenses not fully covered by Medicare.

Multiple Employer Plans: Benefit plans that serve employees of more than one employer and are set up under terms of a collective bargaining agreement.

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Network: All physicians, specialists, hospitals, and other providers who have agreed to provide medical care to HMO (Health Maintenance Organization) members under terms of the contract with the HMO. Insurance contracts with PPO (Preferred Provider Organization) benefits also use networks.

Noncancellable Policy: A policy that guarantees you can receive insurance, as long as you pay the premium. (Also called a guaranteed renewable policy.)

Nondiscrimination: A requirement that group health plans not discriminate against you based on your health status. Your coverage under a group health plan cannot be denied or restricted, and you cannot be charged a higher premium because of your health status. Group health plans can restrict your coverage based on other factors (e.g., part-time employment) that are unrelated to health status. See also Group Health Plan, Health Status.

Non-Network Providers: Health care providers and treatment facilities not under contract with an HMO (Health Maintenance Organization) or those that do not have an insurance PPO (Preferred Provider Organization) contract. (Also called non-participating provider)

Nurse Practitioner (NP): A registered nurse specially educated and licensed to provide primary and/or specialty care.

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Open Access (OA) Plan: An HMO (Health Maintenance Organization) or POS (Point-of-Service) plan in which patients are allowed to self-refer to specialists for a higher co-pay.

Out-of-Pocket Costs: Health care expenses paid by you because they are not paid by an insurer or HMO (Health Maintenance Organization).

Out-of-Area: The area outside the counties or ZIP Codes in which an HMO (Health Maintenance Organization) provides regular and preventive coverage.

Out-of-Network Services: Health care services from providers not in an HMO or a PPO´s network. Except in certain situations, HMOs will only pay for care received within its network. If you’re in a PPO plan, you will have to pay more to receive services outside the PPO´s network.

Outpatient Services: Services usually provided in clinics, physician or provider offices, hospital-based outpatient departments, home health services, ambulatory surgical centers, hospices, and kidney dialysis centers.

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Participating Providers: Health care providers who are under contract with an insurer or HMO (Health Maintenance Organization).

Pension Benefit Guaranty Corporation (PBGC): A federal government corporation established by Title IV of the Employee Retirement Income Security Act (ERISA) of 1974 to encourage the continuation and maintenance of defined benefit pension plans and to provide timely and uninterrupted payment of pension benefits to participants and beneficiaries in plans covered by PBGC. It currently guarantees payment of basic pension benefits earned by American workers and retirees participating in private-sector defined benefit pension plans. PBGC receives no funds from general tax revenues. Operations are financed largely by insurance premiums paid by companies that sponsor pension plans and by PBGC’s investment returns.

Physician Assistant (PA): A specially trained individual who provides medical care usually provided by a physician.

Point-of-Service (POS) Plans: A plan that allows an HMO (Health Maintenance Organization) to contract with an insurance company to give enrollees the option of receiving services outside the HMO´s network. In Texas, HMOs must contract with an insurance company to offer POS plans.

Pre-Certification: A requirement that the health care plan must approve, in advance, certain medical procedures. Pre-certification means the procedure is approved as medically necessary, not approved for payment.

Pre-Existing Condition Exclusion Period: The time during which a health plan will not pay for covered care relating to a pre-existing condition. See also Pre-Existing Condition.

Pre-Existing Condition: A health problem that existed before the date your insurance became effective.

Preferred Provider Organization (PPO): A network of medical providers that contracts with an insurer to provide services at pre-negotiated fees. PPOs are associated with insurance companies.

Premium: The amount that you and/or your employer pay for health insurance, usually paid in installments.

Preventive care: Health care that focuses on healthy behavior and providing services that help prevent health problems. This includes health education, immunizations, early disease detection, health evaluations, and follow-up care.

Prior Authorization: Approval of a health care service or medication before it is provided in order for the health plan to cover the expense.

Primary Care Physician: Usually your first contact for health care. This is often a family physician or internist. However, some women use their gynecologist. A primary care doctor monitors your health and diagnoses, treats minor health problems, and refers you to specialists if another level of care is needed.

Provider: Any person (doctor, nurse, dentist) or institution (hospital or clinic) that provides medical care.

Provider Choice: The degree to which enrollees can choose which doctor or health care provider to see varies by plan type—HMOs (Home Maintenance Organizations), PPOs (Preferred Provider Organizations), POS (Point-of-Service) plans, and OA (Open Access) plans. HMOs have the least provider choice. They require participants to see professionals only within the plan’s relatively narrow network. PPOs tend to have broader networks of preferred providers and allow access to non-network providers, but at a higher cost.

Provider Network: All the doctors, specialists, hospitals, and other providers who agree to provide medical care to HMO (Home Maintenance Organization) or PPO (Preferred Provider Organization) members under terms of a contract with the HMO or insurance company

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Quality Assurance: Activities to ensure and improve the quality of medical care that is provided by reviewing the care and working to correct any problems.

Rate-Up: The extent to which premiums are increased, usually annually. Premium rate-ups are typically expressed as a percentage increase. For example, a premium that increases from $1,000 per year to $1,100 per year has a rate-up of 10%.

Referral: A direction from your doctor to receive care from a different provider or facility.

Respite Care: Providing patient care so the primary health caregiver can rest or take time off.

Rural Health Clinic: There are two types of rural health clinics: Independent and Provider Based. Services include any medical service typically furnished by a physician in an office or a home visit.

• Services provided by Independent Rural Health Clinics (IRHC) include those provided by physicians, nurse practitioners and/or physician assistants during the clinic's normal operation.
• Provider Based Rural Health Centers (PBRHC) are an integral part of a hospital, skilled nursing facilities or home health agency. Services may be provided by a physician, physician assistant, nursing practitioner, certified nurse midwife, and/or specialized nurse practitioner.

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Self-Funded Plans: Plans funded strictly from employer contributions and employee premiums. These plans are authorized by the federal Employee Retirement and Income Security Act (ERISA) of 1974 and are regulated by the U.S. Department of Labor. State regulation of these plans is limited. Although an insurance company may be hired to administer the plan, the insurance company assumes no risk. (Also known as ERISA plans.)

Self-Paying Patients: Individuals who pay out of pocket for the medical care they receive.

Service Area: The counties, or portions of counties, where an HMO or PPO provides coverage.

Skilled Nursing Care: Care needed after a serious illness. Such care is available 24 hours a day from skilled medical personnel, such as registered nurses or professional therapists. A doctor orders skilled nursing care as part of a treatment plan

Special Enrollment Period: A time, triggered by certain specific events, during which you and your dependents must be permitted to sign up for coverage under a group health plan. Employers and group health insurers must make such a period available to employees and their dependents when their family status changes or when their health insurance status changes. Special enrollment periods must last at least 30 days. Enrollment in a health plan during a special enrollment period is not considered late enrollment. See also Late Enrollment.

Specified Disease Policies: Policies that pay only if you contract the illness specified in the policy. (Also called dread disease policies.)

Specified Medical Limitations: A dollar limit placed on treatment of certain medical conditions or types of treatment.

Supplemental Security Income (SSI): A program providing cash benefits to certain very low income, disabled, and elderly individuals. When you qualify for SSI, you generally also qualify for Medicaid. In addition, Medicaid coverage often continues for a limited time if your income increases to the point that you no longer qualify for SSI.

State Continuation Coverage: A law in many states that is similar to COBRA in that it covers persons who work for employers with 2–19 employees. Alabama does not have a state continuation law. See also COBRA.

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Temporary Assistance for Needy Families (TANF): A program (also known as Family Assistance or FA) that provides cash benefits to low income families with children. When you qualify for TANF, you generally also qualify for Medicaid. In addition, Medicaid coverage often continues for a limited time or longer if you no longer qualify for TANF. See also Medicaid.

Tertiary Care: Highly specialized medical care that may require the use of specialized medical facilities.

Third-Party Payer: Anyone paying for the health care who is not the patient (first party) or the caregiver (second party).

Trade Adjustment Assistance (TAA) Program: A program authorized by the Trade Adjustment Assistance Reform Act of 2002. This program provides aid to workers who lose their job or whose hours of work and wages are reduced as a result of increased imports. The TAA Program offers six benefits and re-employment services to assist unemployed workers prepare for and obtain new suitable employment. In addition, TAA offers a significant tax credit that covers 65% of health insurance premiums for certain plans.

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Underinsured: People with inadequate health insurance that does not cover all necessary medical care.

Underwriting: The process insurance companies use to examine, accept, reject, and classify the risks associated with a person or group who is applying for coverage.

U.S. Department of Labor: A department of the federal government that regulates employer- provided health benefit plans. You may need to contact the Department of Labor if you are in a self-insured group health plan or if you have questions about COBRA or the Family and Medical Leave Act. See also COBRA and Family and Medical Leave Act.

Usual and Customary Charges: Typical amounts charged by providers for everything from a doctor’s office visit to heart surgery. Health benefit plans commonly will not pay full benefits if the fees billed by a physician or provider are higher than those charged by other physicians and providers in your area. Usual and customary charges may be based on (a) typical fees charged by physicians and providers in your area, (b) typical fees compiled by independent rating services, or (c) typical fees compiled by the insurance company or third-party administrator (TPA).

Utilization Review: The review process aimed at helping HMOs (Home Maintenance Organizations) and insurance companies reduce health care costs by avoiding unnecessary care. The review includes evaluating requests for medical treatment and determining, on a case-by-case basis, whether that treatment is necessary.

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Waiting Period: The time you may be required to work for an employer before you are eligible for health benefits. Not all employers require waiting periods. Waiting periods do not count as gaps in health insurance for purposes of determining whether coverage is continuous. If your employer requires a waiting period, your pre-existing condition exclusion period begins on the first day of the waiting period. See also Pre-Existing Condition Exclusion Period.

Worker’s Compensation: A state-mandated program requiring certain employers to pay benefits and furnish medical care to employees for on-the-job injuries and to pay benefits to dependents of employees killed in the course of employment.

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