Glossary Of Terms
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Accident:
An event or occurrence which is unforeseen and unintended.
Accident Insurance: A form of health
insurance against loss by accidental bodily injury.
Actual Charge: The actual amount charged by a
physician for medical services rendered.
Age Limits: Stipulated minimum and maximum
ages below and above which the company will not accept applications or may not
renew policies.
Agent: An insurance company representative
licensed by the state, who solicits, negotiates or effects contracts of
insurance, and provides service to the policyholder for the insurer.
Allowable Costs: Charges which qualify as
covered expenses.
Application: A signed statement of facts made
by a person applying for health insurance and then used by the insurance company
to decide whether or not to issue a policy. The application becomes part of the
insurance contract when the policy is issued.
Association: A group. Often, associations can
offer individual health insurance plans specially designed for their members.
Attending Physician's Statement (APS): More
common referred to as "medical records", often acquired by an insurance company
to determine an applicant's state of health at the time of applying for
coverage.
Benefit:
Amount payable by the insurance company to a claimant, assignee, or beneficiary
when the insured suffers a loss.
Benefit Levels: The maximum amount a person
is entitled to receive for a particular service or services as spelled out in
the contract with a health plan or insurer.
Benefit Package: A description of what
services the insurer or health plan offers to those covered under the terms of a
health insurance contract.
Brand-name drug: Prescription drugs marketed
with a specific brand name by the company that manufactures it, usually the
company which develops and patents it. When patents run out, generic versions of
many popular drugs are marketed at lower cost by other companies. Check your
insurance plan to see if coverage differs between name-brand and their generic
twins.
Broker: Licensed insurance salesperson who
obtains quotes and plan from multiple sources information for clients.
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.
Comprehensive Major Medical Insurance: A
policy designed to give the protection offered by both a basic and a major
medical health insurance policy. It is characterized by a deductible, a
coinsurance feature, and high maximum benefits.
Consolidated Omnibus Budget Reconciliation Act (COBRA)
of 1986: Legislation providing a continuation of group health care
benefits under the group plan for a period of time when benefits would otherwise
terminate. Continuation rights apply to enrolled persons and their dependents.
Coverage may be continued for up to 18 months if the insured person terminates
employment or is no longer eligible. Coverage may be continued for up to 36
months in nearly all other cases, such as loss of dependent eligibility because
of death of the enrolled person, divorce, or attainment of the limiting age.
Co-payment: A cost-sharing arrangement in
which an insured pays a specified charge for a specified service, such as $25
for an office visit. The insured is usually responsible for payment at the time
the service is rendered. This charge may be in addition to certain coinsurance
and deductible payments.
Covered Expenses: Services for which the
health insurance makes either a full or partial payment.
Covered Person: An individual who meets
eligibility requirements and for whom premium payments are paid for specified
benefits of the contractual agreement.
Deductible: The amount of money you must
pay each year to cover your medical expenses before your insurance policy begins
to pay benefits.
Dependents: Spouse and/or unmarried children
(whether natural, adopted or step) of an insured.
Drug Formulary: A schedule of prescription
drugs approved for use which will be covered by the plan and dispensed through
participating pharmacies.
Effective
Date: The date your insurance is to
actually begin. You are not covered until the policies effective date.
Exclusions: Specific conditions or
circumstances listed in the policy for which the policy will not provide benefit
payments.
Exclusive Agent: An agent who is employed by
one and only one insurance company and who solicits business exclusively for
that company.
Field
Underwriting: Initial screening of
prospective buyers of health insurance, performed by sales personnel "in the
field." This may also include quoting of premium rates.
Generic
Drug: A drug which is exactly the same as a
brand name drug and which is allowed to be produced after the brand name drug's
patent has expired. It is also called a "generic equivalent." Generic drugs are
cheaper & most plans reward clients for choosing generics.
Health
History: A form used by underwriters to
assist in evaluating individuals and families to determine if they are
acceptable risks.
Health Insurance: Insurance against financial
losses resulting from sickness or accidental bodily injury. Protection that
provides payment of benefits for covered sickness or injury. Included under this
heading are various types of insurance such as accident insurance, disability
income insurance, medical expense insurance, and accidental death and
dismemberment insurance.
Health Insurance Portability and Accountability Act:
The Health Insurance Portability and Accountability Act of 1996, known as HIPAA,
includes important new - but limited - protections for millions of working
Americans and their families. HIPAA may: 1) Increase your ability to
get health coverage for yourself and your dependents if you start a new job;
2) Lower your chance of losing existing health care coverage, whether you
have that coverage through a job, or through individual health insurance; 3)
Help you maintain continuous health coverage for yourself and your dependents
when you change jobs; and 4) Help you buy health insurance coverage on
your own if you lose coverage under an employer's group health plan and have no
other health coverage available. Among its specific protections, HIPAA: 1)
Limits the use of pre-existing condition exclusions; 2) Prohibits group
health plans from discriminating by denying you coverage or charging you extra
for coverage based on your or your family member's past or present poor health;
3) Guarantees certain small employers, and certain individuals who lose
job-related coverage, the right to purchase health insurance; and 4)
Guarantees, in most cases, that employers or individuals who purchase health
insurance can renew the coverage regardless of any health conditions of
individuals covered under the insurance policy. In short, HIPAA may lower your
chance of losing existing coverage, ease your ability to switch health plans
and/or help you buy coverage on your own if you lose your employer's plan and
have no other coverage available.
Health Savings Account: Special plans in
which money can be deposited into a tax-deferred health savings account from
which you can withdraw money on a pre-tax basis for qualified medical care and
expenses.
Hospital Indemnity: Coverage that pays based
on daily, weekly, or monthly limits regardless of the amount of actual hospital
expenses.
Hospitalization Insurance: A form of
insurance that provides reimbursement within contractual limits for hospital and
specific related expenses arising from hospitalization caused by injury or
sickness.
Identification Card: A card given to each
person covered under the plan which identifies him or her as being eligible for
benefits.
Independent Agent: An independent businessperson who
usually represents two or more insurance companies in a sales and service
capacity and who is paid on a commission basis.
Individual Deductible: Amount that an insured
and each person of his or her family covered by the policy must pay before the
group or individual medical insurance policy begins to pay for medical expenses.
Individual Insurance: Policies which provide
protection to the policyholder and/or his/her family. Sometimes called Personal
Insurance as distinct from group and blanket insurance.
Insurability: Acceptability to the company of
an applicant for insurance.
Insurance Commissioner: The top insurance
regulatory official in a state.
Insured: A person or organization covered by
an insurance policy, including the "named insured" and any other parties for
whom protection is provided under the policy terms.
Insurer: The party to the insurance contract
who promises to pay losses or benefits. Also, any corporation engaged primarily
in the business of furnishing insurance to the public.
Lifetime
Maximum Benefit (or Maximum Lifetime Benefit):
The maximum amount a health plan will pay in benefits to an
insured individual during that individual's lifetime.
Limitations: A limit on the amount of
benefits paid out for a particular covered expense, as disclosed on the
Certificate of Insurance.
Major
Medical Insurance: A type of Health
Insurance that provides benefits up to a high limit for most types of medical
expenses incurred, subject to a large deductible. Such contracts may contain
limits on specific types of charges, like room and board, and a percentage
participation clause sometimes called a coinsurance clause. These policies
usually pay covered expenses whether an individual is in or out of the hospital.
Maximum Annual Benefit: The maximum amount
that the insurance company will pay toward a specific benefit in the calendar
year.
Maximum Dollar Limit: The maximum amount of
money that an insurance company (or self-insured company) will pay for claims
within a specific time period. Maximum dollar limits vary greatly. They may be
based on or specified in terms of types of illnesses or types of services.
Sometimes they are specified in terms of lifetime, sometimes for a year.
Network:
A group of doctors, hospitals and other health care providers contracted to
provide services to insurance company’s customers for less than their usual
fees. Provider networks can cover a large geographic market or a wide range of
health care services. Insured individuals typically pay less for using a network
provider.
Nonparticipating Provider: A provider who has
not signed a contract with a health plan.
Out-of-Network: Refers to services provided
by a physician or hospital that are not contracted with the insurance company
issuing coverage to the patient.
Out-of-Pocket Costs: The amounts the covered
person must pay out of his or her own pocket. This includes such things as
coinsurance, deductibles, etc.
Out-Of-Pocket Maximum: A predetermined
limited amount of money that an individual must pay out of their own pocket,
before an insurance company will pay 100 percent for an individual's health care
expenses for the rest of the calendar year.
Outpatient: An individual (patient) who
receives health care services (such as surgery) on an outpatient basis, meaning
they do not stay overnight in a hospital or inpatient facility. Many insurance
companies have identified a list of tests and procedures (including surgery)
that will not be covered (paid for) unless they are performed on an outpatient
basis. The term outpatient is also used synonymously with ambulatory to describe
health care facilities where procedures are performed.
Over-The-Counter Drugs (OTC): A drug that can
be purchased without a prescription.
Policy:
The printed legal document stating the terms of the insurance contract that is
issued to the policyholder by the company.
Policyholder: A person who pays a premium to
an insurance company in exchange for the insurance protection provided by a
policy of insurance.
Preexisting Condition: A physical condition
that existed prior to the effective date of a policy. In many Health policies
these are not covered until after a stated period of time has elapsed.
Preferred Provider Organization (PPO): A
network of health care providers that have agreed to provide medical services to
a health plan's members at discounted costs. PPO members typically make their
own decisions about their health care rather than going through a primary care
physician like HMO member. The cost to use physicians within the PPO network is
less than using a non-network provider.
Premium: The sum paid by a policyholder to
keep an insurance policy in force.
Prescription Medication: A drug which can be
dispensed only by prescription and which has been approved by the Food and Drug
Administration.
Preventive Care: Comprehensive care that
emphasizes prevention, early detection and early treatment of conditions through
routine physical exams, immunizations and health education.
Primary Care Physician: Some health insurance
plans require members to select and seek treatment from a primary physician who
either renders treatment or refers the member to an appropriate specialist
within the approved health care network.
Provider: Any individual or group of
individuals that provide a health care service such as physicians, hospitals,
etc.
Quote:
A price estimate given to the potential consumer as he/she decides to which
company a formal application will be submitted.
Rate:
The pricing factor upon which the insurance buyer's premium is based.
Reasonable and Customary Fees: The average
fee charged by a particular type of health care practitioner within a geographic
area. The term is often used by medical plans as the amount of money they will
approve for a specific test or procedure. If the fees are higher than the
approved amount, the individual receiving the service is responsible for paying
the difference. Sometimes, however, if an individual questions his or her
physician about the fee, the provider will reduce the charge to the amount that
the insurance company has defined as reasonable and customary.
Referral: Occurs when a physician or other
health plan provider receives permission to consult another physician or
hospital.
Rider: A document which amends the policy or
certificate. It may increase or decrease benefits, waive the condition of
coverage or in any other way amend the original contract.
Risk: The chance of loss, the degree of
probability of loss or the amount of possible loss to the insuring company. For
an individual, risk represents such probabilities as the likelihood of surgical
complications, medications' side effects, exposure to infection, or the chance
of suffering a medical problem because of a lifestyle or other choice. For
example, an individual increases his or her risk of getting cancer if he or she
chooses to smoke cigarettes.
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%.
Stop-loss is reached when an insured individual has paid the deductible and
reached the out-of-pocket maximum amount of co-insurance.
Surgical Insurance Benefits: A form of Health
Insurance against loss due to surgical expenses.
Ten Day
Free Look: A notice, placed prominently on
the face page of the policy, advising the insured of his or her right to examine
a health policy, and if dissatisfied return the policy within ten days for a
full refund of premium and no further obligation.
Underwriter: The company that assumes
responsibility for the risk issues insurance policies and receives premiums.
Underwriting: The process of selecting risks
for insurance and determining in what amounts and on what terms the insurance
company will accept the risk.
Uninsurable Risk: One not acceptable for
insurance due to excessive risk.
Usual, Customary and Reasonable (UCR) or Covered
Expenses: An amount customarily charged for or covered for similar
services and supplies which are medically necessary, recommended by a doctor, or
required for treatment.
Waiting
Period: The period of time when you are not
covered by insurance for a particular benefit. For example, all plans have a
waiting period before you can use the maternity benefit.
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