Health Insurance Glossary

2 Tier

• A rate structure that sets monthly premiums based on (a) Single person coverage and (b) Family coverage.
• A Single employee will enroll as Single. An Employee with Spouse, Employee with Children or Family (employee, spouse and children) will enroll as a Family. The 2 tier rate is ideal for Single and Family employees due to the 2 tier structureís price break for family rates. If the company is set up as 2 tier and hires an Employee with Spouse or Employee with Children, they will have to pay the Family rate due to the 2 tier system.
• Medical Insurance Companies that offer 2 tier are: Atlantis Health Plan, Empire Blue Cross HMO only, GHI and HIP.
• The Single rate will remain the same within 2, 3 and 4 tier rate structures. All other rates will be affected by changing the rate structure.

3 Tier

• A rate structure that sets monthly premiums based on (a) Single person coverage, (b) Two-Party coverage (employee and spouse OR employee and child) and (c) Family coverage.
• A Single employee will enroll as Single. An Employee with Spouse or Employee with Children will enroll as two-party. A Family (employee, spouse and children) will enroll as a Family.
• Medical Insurance Companies that offer 3 Tier are: Empire Blue Cross and HIP.
• The Single rate will remain the same within 2, 3 and 4 tier rate structures. All other rates will be affected by changing the rate structure.

4 Tier

• A rate structure that sets monthly premiums based on (a) Single person coverage, (b) Employee and Spouse coverage, (c) Employee with Children coverage and (d) Family coverage.
• A Single employee will enroll as Single. An Employee with Spouse will enroll as Employee and Spouse. An Employee with Children will enroll as Employee and Children. A Family (employee, spouse and children) will enroll as a Family.
• Medical Insurance Companies that offer 4 Tier are: Aetna, Atlantis Health Plan, Cigna HealthCare, Empire Blue Cross, GHI, Guardian HealthNet, HIP, Horizon HealthCare, Oxford Health Plans, United Health Care, and Vytra Health Plans.
• The Single rate will remain the same within 2, 3 and 4 tier rate structures. All other rates will be affected by changing the rate structure.

Age and Gender Rated (Age and Gender Based Rates)

The premium is based on the overall age and gender of the groupsí employees. A census of Age, Gender, Home Zip Code and Marital Status (Employee, Employee/Spouse, Employee/Childrenand Full Family) should be gathered from the client.

Allowed Charge

The amount the health insurance plan will reimburse you for covered services rendered by non-participating Providers.

Ambulatory Care

This is medical care on an out-patient basis, such as hospital outpatient clinics and ER Departments, physician’s office and home health care are examples.

Annual Maximum Limit

The limit an insurance plan sets on a given service rendered. This may be a certain number of visits or a dollar amount.

Assisted Living Facility (ALF)

A homelike facility with staff that assists residents, including: help with dressing, bathing, feeding, and housekeeping. Assisted Living Facilities usually give a less skilled level of care than you would get in Skilled Nursing Facilities (SNF).

Broker of Record

A broker who has been designated or appointed in writing by a client to provide certain insurance and service.

Calendar Year

January 1 through December 31 of the same year. Many deductible amount provisions are on a calendar year basis under major medical plans. Also, benefits under basic hospital surgical and medical plans are usually stated as so much for each calendar year.

Claim

This is information a medical provider or insured (employee) submits to an insurance company to request payment for medical services provided to the insured (employee).

Coordination of Benefits (COB)

• COB designates the order in which the multiple health plans are to pay benefits. Under a COB provision, one plan is determined to be primary and its benefits are applied to the claim first.
• The unpaid balance is usually paid by the secondary plan and tertiary plan, if applicable, to the limit of their responsibility. Benefits are thus “coordinated” among the health plans.

The Consolidated Omnibus Budget Reduction Act of 1985 (COBRA)

COBRA gives employees of companies that employee 20 or more people the right to continue group medical insurance coverage at their own expense, when the employee’s plan ends. COBRA lasts either 18 - 36 months or before the employee finds another job with group medical coverage. Cobra will not cover you after the 18 - 36 month period.COBRA lasts 18 months:

• Employee leaves the company
• Employees Spouse through Divorce or Legal Separation
• Employee hours are reduced below the minimum necessary to qualify
• Employee attains Medicare Age

COBRA lasts 36 months:

• To carry the Spouse or Children of a covered Employee who passes away
• Dependants who are terminated due to Age and Student Status

COBRA continuation coverage ends:

• When the Employee voluntarily termination
• gWhen your premium isn’t paid within 30 days of the monthly due date
• When a covered person becomes covered under another plan
• When the employer discontinues offering group health to employees
• When the COBRA continuation maximum period has ended

New York State continuation:

• NYS Continuation is (Cobra) for employers who have less than 20 employees - same rules as above apply.

Co-Insurance

• The arrangement by which the insurer (health provider) and insured (employee) share the percentage of covered losses after the deductible is met.
• This is the percentage the health plan will pay for. Example: 70% of $10,000 means that the health provider will pay for 70% of the bill up to $10,000.
• After the bill reaches the dollar amount, (in example it’s $10,000) the plan will cover you 100%.

Community Rated (Business Location Rated)

The premium is based on the average geographic area or industry and does not consider variables such as claims experience, age, sex, or health status of the covered employees.

Contract Year

This is the period of time from the effective date of the contract to the expiration date of the contract.

Cost Sharing

A situation where covered persons pay a portion of the health costs such as deductibles, coinsurance, or co-payment amounts.

Deductible

• The dollar amount that the client has to pay out of pocket (usually out of network) before the co-insurance kicks in.
• Example: If you have a $1,000 Deductible Out-Network, you will have to pay the first $1,000 out of pocket before your co-insurance kicks in.

Deductible Carry-over Credit

During the last three months of a calendar year, charges incurred for health services can be used to satisfy the deductible for the following calendar year. These credits may be applied whether or not the prior calendar year’s deductible had been met.

Dependant

In reference to Small Group in New York State: A dependant is the spouse (legal by marriage) or child (natural born or legally adopted) of the employee who is eligible for health care under the employeeís plan. Under a Large Group policy (over 50 members) a Domestic Partner might be considered as a dependant.

Drug Formulary

• A listing of prescribed drugs covered by an insurance plan.
• Generic ‚ covered under the 1st tier drug card for co-payment.
• Brand / Formulary ‚ covered under the 2nd tier drug card for co-payment.
• Non-Formulary ‚ covered under the 3rd tier drug card for co-payment ‚ this is a prescription that is not part of the health insurance company’s formulary listing.

Durable Medical Equipment (DME)

• A special equipment prescribed by physicians for home use that provides therapeutic benefits or helps patients perform tasks they would otherwise not be able to accomplish such as the ordinary daily activities and improves a patient’s quality of life.
• DME is defined for Medicare/Medicaid purposes as equipment that: can withstand repeated use, serves a recognized medical purpose , generally is not useful to an individual without an illness or injury, is appropriate for home use , is prescribed by a physician as medically necessary.
• DME items are as follows: wheelchairs, hospital beds, chair lifts, scooters, diabetic supplies, canes, crutches, walkers, commode chairs, home oxygen system & traction equipment. Please see your health insurance handbook for further details and restrictions on how your plan covers DME.

Enrollment Period

The amount of time an employee has to sign up for a contributory health plan.

Explanation of Benefits (EOB)

A form sent to the employee after a claim for payment has been processed by the health plan. The form explains the action taken on that claim. This explanation usually includes the amount paid, the benefits available, reasons for denying payment, or the claims appeal process. This is not a bill.

Exclusive Provider Organization (EPO)

An organization similar to an HMO, that provides health care services through a network of doctors, hospitals and other health care providers, EXCEPT that members are NOT required to select a PCP (primary care physician) and do NOT need a referral for a specialist.

Extended Care Facility

A facility such as a nursing home which is licensed to provide 24-hour nursing care service in accordance with state and local laws. Three levels of care may be provided–skilled, intermediate, custodial, or any combination.

Fee Schedule

A list of maximum fees for providers who are on a fee-for-service basis.

Flexible Spending Account (FSA)

These are accounts offered and administered by employers that provide a way for employees to set aside money out of their paycheck. This money is pretax dollars. This money pays for the employee’s share of insurance premiums or medical expenses not covered by the employer’s health plan. The employer may also make contributions to a FSA. Usually, benefits or cash must be used within the given benefit year or the employee loses the money. FSA’s can also be provided to cover childcare expenses, but those accounts must be established separately from medical FSA’s.

Full Time Student

This refers to an eligible dependant child student (typically age 19 or older) who meets the criteria of “full-time” under the medical insurance policy. This usually includes minimum credit hour requirements (such as 12 credit hours in a semester) and a letter from the registration/bursars office affirming full time student status. The maximum age limit is typically 23, but a Rider (see definition for Rider below) can be purchased to extended benefits to age 25.

Generic Push (GP)

If the doctor prescribes you a Brand Names prescription and your prescription card states Generic Push, the prescription can either be filled as Brand Name or as Generic. If it is filled as Brand, you pay the Brand co-pay and the difference between the Generic price and Brand price. If it is filled as a Generic and you pay the generic co-pay.

Grandfather Plan

When rules change, current participants remain unaffected and the new rules only apply to new participants.

Health Savings Account (HSA)

Operating similarly to IRAs, HSA’s are tax-advantaged savings accounts for health care services. A person must enroll in a qualified High-Deductible Health Plan (HDHP) before they can establish an HSA.

High Deductible Health Plan (HDHP)

A person must be enrolled in a qualified High-Deductible Health Plan (HDHP) before they can establish a Health Savings Account (HSA). Not all high-deductible health plans qualify for purposes of establishing HSA eligibility. A qualified HDHP benefit design must conform to various federally-mandated requirements, such as a minimum $1000 deductible and a lack of first-dollar benefit provisions.

Health Insurance Portability and Accountability Act (HIPAA)

• HIPAA is a federal act in the continuation of healthcare benefits for individuals and members of small group health plans and establishes equality between the benefits extended to these individuals and those benefits offered to employees in large group plans.
• The act also contains provisions designed to ensure that prospective or current employees in a group health plan are not discriminated against based on health status.

Health Insurance Maintenance Organization (HMO)

• A form of managed care where an individual contracts with the plan sponsor for services through the organization in return for a monthly premium.
• The organization, in return, contracts with certain providers to perform health care services.

Home Health Care

Services given at home to the aged, disabled, sick, or recuperative individuals not needing institutional care. The most common types of home care are visiting nurse services and speech, physical, occupational, and rehabilitation therapy. These services are provided by home health agencies, hospitals, or other community organizations.

Hospice Care

This is care for the terminally ill and their families either in the home or a non-hospital setting, that emphasizes alleviating pain rather than a medical cure.

Hospital Care

This is reimbursement for both inpatient and outpatient medical care expenses incurred in a hospital. Inpatient Benefits include; Charges for room and board, charges for necessary services and supplies sometimes referred to as ‘hospital extras,’ ‘other hospital extras,’ ‘miscellaneous charges,’ and ‘ancillary charges. Outpatient Benefits include; surgical procedures, rehabilitation therapy, and physical therapy.

In-network

Refers to the use of providers who participate in the health plan’s provider network. Many benefit plans encourage enrollees to use participating (in-network) providers to reduce the enrollee’s out-of-pocket expense.

In-patient Benefits

• Charges for room and board.
• Charges for necessary services and supplies, referred to as hospital extras, other hospital charges or ancillary services.
• Typical maximum periods of hospital stay that benefits are payable, are 31, 70, 120 or 365 days.

Lifetime Maximum Benefit

The maximum health insurance benefit that an insurance company will assume for an insured over his or her lifetime, from all causes.

Managed Care

A medical delivery system that manages healthcare and costs through a network of physicians, hospitals and health care providers.

Mandatory Mail Order (MMO)

A maintenance prescription that must be mailed to the participating pharmacy to receive prescriptions. Usually the MMO is at a reduced cost.

Medicaid

A jointly funded federal and state program that provides hospital and medical coverage to the low-income population and certain aged and disabled individuals.

Medical Savings Account (MSA)

This is a savings accounts designated for out-of-pocket medical expenses. In an MSA, employers and individuals are allowed to contribute to a savings account on a pre-tax basis and carry over the unused funds at the end of the year. One major difference between a FSA’s and MSA’s is the ability under an MSA to carry over the unused funds for use in a future year, instead of losing unused funds at the end of the year. Most MSA’s allow unused balances and earnings to accumulate. Unlike FSAs, most MSA’s are combined with a high deductible or catastrophic health insurance plan.

Medicare

A federal government hospital and medical insurance plan primarily for elderly and disabled persons.

Medicare Part A

This is part of Medicare providing benefits for hospitalization, extended care and nursing home care to Medicare beneficiaries with no premium payment for qualified individuals.

Medicare Part B

This is part of Medicare providing medical surgical benefits for Medicare beneficiaries for a modest premium.

Medicare Part C

The part of Medicare that expands the list of different types of entities allowed to offer health plans to Medicare beneficiaries. Also known as Medicare+Choice.

Medicare Supplement

A private medical insurance plan that supplements Medicare coverage. Also known as a Medigap policy.

Mandatory Generic (MG)

If the doctor prescribes you a Brand Name prescription and your prescription card states Mandatory Generic, the prescription will automatically be filled as Generic.

Network

A group of doctors, hospitals and other providers contracted to provide services to insured employees. Provider networks can cover large geographic markets and/or a wide range of health care services.

Occupational Therapy

Is a treatment to restore a physically disabled person’s ability to perform activities such as walking, eating, drinking, dressing, toileting, and bathing (activities of daily living).

Occupational Therapist (OT)

• An Occupational Therapist (OT) is needed if a patient has suffered an injury or illness which has affected perceptual motor skills or the ability to perform activities of daily living, such as dressing, eating, bathing, grooming, writing, driving, or cooking.
• The occupational therapy program can consist of evaluation, activities of daily living training, adaptive equipment recommendations, therapeutic exercises or perceptual motor training, all geared toward helping the patient attain his or her maximum potential in perceptual motor and daily activity skills.
• In making treatment recommendations, the OT addresses (1) fatigue management, (2) upper body strength, movement, and coordination, (3) adaptations to the home and work environment, including both structural changes and specialized equipment for particular activities, and (4) compensatory strategies for impairments in thinking, sensation, or vision.

Out-of-network

The use of health care providers who have not contracted with the health plan to provide services. Depending on your contract, out of network services may not be covered.

Out of Pocket Maximum

An important feature that limits your annual responsibility for your health insurance policy, co-pay and deductible

Primary Care Physician (PCP)

A PCP is a family physician - family practitioner, general practitioner, internist or pediatrician - who is responsible for delivering or coordinating care.

Physical Therapy

A treatment involving physical movement to relieve pain, restore function and prevent disability following disease, injury, or loss of limb.

Point of Service (POS)

• A form of managed care health insurance plan where the insured chooses a preferred provider from a list of physicians who have a contractual relationship with the sponsor to provide services to the member or refer them to other physicians who are a part of the plan.
• Physician is Required on application.

Preferred Provider Organization (PPO)

• A form of managed care plan where the individual had a broad range of providers to choose from, but with negotiated rates for services.
• Physician is NOT required on application.

Pre-existing Condition (PRE-X)

• A pre-existing condition is any disease, symptom or condition that was present on the first day of coverage and for which medical advice or treatment was recommended or received during the six-month period prior to the enrollment date.
• Health condition that exists prior to the effective date of the medical insurance coverage.
• In effect, insurance carriers CANNOT exclude Newborns, Pregnancy (even late entrants) and Adopted Children or Children place under Adoption under 18 years.
• Insurance Carriers CAN exclude people who have never had health coverage, people who previously had health coverage, but in less time than the plan’s pre-existing exclusion period, people who are late entrants (people who did not enroll when they could have) and people who have been without coverage for 63 days.
• However, these exclusions are usually limited in duration for regular entrants may only endure an exclusion period of 12 months following enrollment. Applicable to those who received treatment for a condition 6 months before enrollment.

  (Example: You were treated for melanoma on January 1, 1999: You can enroll up to July 1, 1999 and still be eligible but you must wait until July 2000 for benefits to begin). Late entrants must endure a longer exclusionary period of 18 months, but maintain the same eligibility requirements for regular entrants.

Preventative Care

Health care which emphasizes preventive measures and health screenings such as routine physicals, well-baby care, immunizations, diagnostic lab and x-ray tests, pap smears, mammograms and other early detection testing. The purpose of offering coverage for preventive care is to diagnose a problem early, when it is less costly to treat, rather than late in the stage of a disease when it is much more expensive, or too late to treat.

Prior Authorization

This means that before any hospitalization, the insurance company has to be contacted of the “course of treatment” expected. If this requirement exists and prior authorization is not obtained, your claim payment may be decreased. The doctor and/or hospital is responsible for this process.

Re-credentialing

• This involves the carriers requesting your Current Tax Information in order to Qualify for Group or Self-Employed Coverage.
• Non-compliance will result in termination for your Group.
• Reinstatement requests are to be made within 30 days of your Groups termination.
• Reinstatement will be based on your past payment history with the Health Insurance company.

Referral

Most plans require the insured (employee) to obtain a “referral” from a Primary Care Provider (PCP) before seeing any specialist. Depending on the PCP, this can be done with a telephone call or a visit to the PCP. The purpose of referrals is to avoid unnecessary specialist visits and cost.

Renewal

The process of which the Health Insurance plan continues for another year at different rates and / or plan design. Each renewal will take effect one year from the time of enrollment. Example: If your Group plan was established on April 1st 2004, your renewal will be on April 1st 2005.

Riders

Extended coverage on a contract that can increase or decrease the coverage. Some riders that can be added or taken away include: Dental coverage, Vision coverage, Private Duty Nursing, Hospital Deductibles, Skilled Nursing Facility, Mental Health Alcohol/Substance Abuse, Dependant Age and Removing Pre-Existing Conditions.

Service Area

The geographic area in which a health plan is prepared to deliver health care through a contracted network of participating providers.

Skilled Nursing Facility (SNF)

A licensed establishment (hospital) that engages in providing continuous skilled nursing care and related services for patients who require medical care, nursing care or rehabilitation service

Speech Therapy

A treatment of the correction of a speech impairment which resulted from birth, disease, injury, or prior medical treatment

State Mandated Benefits

Benefits for a variety of medical conditions that a given state requires of insurance policies sold in that state.

Usual Customary Rate (UCR)

Usual Customary charges mean those charges that are the lesser of:

• The charge normally made by the provider for the medical care service.
• The charge most other providers make for similar medical services in the same geographical area.

Other Definitions:

• What the doctor has a right to charge based on geographics and their specialization.
• The fees most doctors charge for a certain procedure. these charges are determined based on a review of provider charges in a geographical area at a certain time.
• The higher the UCR, the lower the patient pays out of pocket.
• The lower the UCR, the higher the patient pays out of pocket.
• 70% - standard / everyone stays in network

Underwriting

This is the procedure an insurance company uses in determining if a risk is acceptable. All New York group insurance applicants require state documentation, applications and a business check for the first month’s premium payable to the health insurance carrier. This underwriting process usually takes between 7 - 14 business days in awaiting group approvals.

Voluntary Mail Order (VMO)

A maintenance prescription that you can voluntarily mail to a participating pharmacy to receive prescriptions at a reduced cost. Since this is voluntary, you may also fill your prescriptions at a pharmacy according to the cost of your prescription card.

Waiting Period

• A period of time an individual must wait to become eligible for insurance coverage.
• If your Date of Hire is March 1st, but your employer has a 30 day waiting period on their medical insurance plan, you will be eligible for insurance beginning April 1st. You have to wait the waiting period out before enrolling in the plan.

Well-baby Care

Preventative health services, for young children within an age range specified by the health policy that includes immunizations.

Workers Compensation

A state-mandated insurance plan that provides benefits for health insurance costs and lost wages to qualified employees and their dependents if an employee suffers a work-related injury or disease.