accidental death and dismemberment (AD&D) rider
A supplement to many life insurance policies that provides an additional
cash benefit to the insured or his/her beneficiaries if an accident causes
either the death of the insured or causes the insured to lose any two limbs
or the sight in both eyes.
annual out-of-pocket maximum
A dollar amount set by the plan which puts a cap on the amount of
money the insured must pay out of his or her own pocket for covered expenses
over the course of a calendar year.
The person or business that applies for an insurance policy.
The person or party the owner a life insurance policy names to receive
the policy benefit in the event of the insured's death.
Prescription medications that are manufactured by the developer of
the medication in question.
A commissioned sales agent who is under contract to and sells the
insurance products of more than one insurance company.
An amount that the insured person must pay before insurance payments
for covered services begin.
A utilization management technique that addresses the medical necessity
of care as well as alternative treatments or solutions, especially when the
patient is likely to require very expensive treatment.
certificate of insurance
A document that describes the type and length of coverage provided
by a group insurance policy that is given to each insured by the group policyholder.
Not all plans cover chiropractors -- practitioners who manipulate
the spine and other structures within the body to relieve pain and tension
resulting from posture, stress or strain. Some plans offer chiropractic care
as an optional benefit.
A request for payment under the terms of an insurance policy.
An insurance company employee who is responsible for carrying out
the claim examination process. Also known as claim approver, claim analyst,
or claim specialist.
A specified percentage of the cost of treatment the insured is required
to pay for all covered medical expenses remaining after the policy's deductible
has been met.
The amount of money, usually a percentage of the premiums, that is
paid to an insurance agent for selling an insurance policy.
comprehensive major medical policy
A health insurance policy that covers both major medical coverages
(i.e., hospitalization and surgeries) and basic medical expense coverages.
(1) A fee that many insurance plans require an insured to pay for
certain medical services (such as a physician's office visit). (2) An amount
that the insured must pay toward the cost of each prescription under a prescription
A flat amount of covered medical expenses that an insured must incur
before the insurer will make any benefit payments under a medical expense policy.
dental -- benefits
Some health plans offer dental care as an optional benefit or rider
that you or your employees may decide to add at an additional cost.
A person for whom the insured has some legal obligation to. For most
plans, it is the insured's spouse and/or children. Some plans also allow non-traditional
spousal relationships (significant other, life-partner, etc.) to be considered
a dependent with some additional certifying paperwork.
Domestic partners are commonly defined as "two adults who share
an emotional, physical and financial relationship similar to that of a married
couple but who either choose not to marry or cannot legally marry. They share
a mutual obligation of support for the basic necessities of life." Additionally,
some carriers may require that domestic partners own property together to qualify.
Dual choice allows the employer to offer his employees not one, but
two health plans. Instead of picking the least expensive plan for all employees,
Dual Choice lets employees choose the type of plan that best meets their needs
or budgets. Usually, this is a choice of an HMO and PPO, or HMO and POS. The
employer will typically pay a portion of the premium in these plans, and the
employee will pay the balance. Here are a few approaches:
- An employer may pay for the lower cost plan and employees may buy up to
the more expensive plan.
- An employer may pay a set amount per month for every employee.
- An employer may charge all employees the same amount and pay the balance,
regardless of the plan each employee selects.
The specified date of when the health insurance policy is to begin.
Most plans cover emergency care in a hospital emergency room if it
is an extremely urgent medical emergency, even if the hospital you are taken
to is not in the plan's network. It is possible, however, that after your condition
has been stabilized, you would be transferred to a participating plan hospital.
A visit to a hospital for treatment of an accidental injury or for
emergency medical care. To qualify as an emergency, the symptoms must be sudden,
severe and require immediate medical attention. Some states judge emergencies
by the "prudent layperson" law, meaning that the health plan must
cover a trip to the emergency room "if a prudent layperson, acting reasonably,
would have believed that an emergency medical condition existed." Keep
in mind that some plans won't cover a trip to the emergency room if the symptoms
appeared more than 24 hours earlier.
The amount of premium the employer requires the employee to pay towards
his or her health insurance.
enrollment or eligibility period
The time during which a new group member may first enroll for group
exclusions and limitations
Conditions, situations and services not covered by the health plan.
fee schedule payment structure
A fee structure used by insurers under which the insurance company
places caps or limits on the dollar amounts that it will reimburse providers
covered medical procedures and services, both in and out-of-network if applicable.
Also known as a limited fee schedule.
Also called an indemnity plan. A health insurance plan that allows
the insured to use any medical provider that he or she chooses. As such, there
are no networks to utilize.
flex-term medical coverage
See "short-term medical coverage."
Formulary drugs generally have a lower copay. A formulary drug is
one that has been thoroughly reviewed by a team of expert pharmacists and physicians;
these drugs have been identified as safe, effective and beneficial to members
for treating medical conditions. When deciding between drugs which are equally
safe and effective, the formulary team also considers the relative costs of
medications. These savings are then passed on to you through lower premiums.
fully insured plan
A group insurance plan for which an insurance company bears the responsibility
of making all claim payments.
fully self-insured plan
A group insurance plan under which the employer takes complete responsibility
for all claim payments and related expenses rather than purchasing coverage
from an insurance company.
A term used to describe the primary care physician's role in a managed
care plan; this role is to authorize all services delivered to the insured
by other physicians or health care providers. Thus, whenever you wish to see
a physician other than your primary care physician, you must first obtain his
or her permission (via a referral).
When a new drug is put on the market, the pharmaceutical company patents
it under a brand name. The company has the exclusive right to sell the drug
under this name, but once its patent expires, other companies can sell the
same drug under its chemical, or generic, name. Generic drugs are typically
cheaper than brand-name drugs, but the Food and Drug Administration requires
generic drug manufacturers to show that a generic drug "delivers the same
amount of active ingredient in the same time frame as the original product."
group term life
A life-insurance plan that provides employees with additional coverage
at economical group rates.
guaranteed renewable policy
A health insurance policy that the insurer is required to renew --
as long as premiums are paid -- at least until the insured attains the age
limit specified in the policy, or the policy is cancelled by the insured. The
insurer may increase the premium rate for any class of guaranteed renewable
health care provider
A doctor, hospital, laboratory, nurse or anyone else who delivers
medical or health-related care.
A type of insurance that provides protection against the risk of financial
loss resulting from the insured person's sickness, accidental injury or disability.
health insurance portability and accountability act of 1996 (HIPAA)
Under this federal law (known as HIPAA), group health plans cannot
deny coverage based solely on an individual's health status. This law also gives
employees who change or lose their jobs better access to health coverage, guarantees
renewability and availability to certain employees and limits exclusions for
pre-existing conditions. For example, under this law, group health plans must
credit any employee the amount of time that they spent on any health plan prior
to the new plan, which is known as "prior credible coverage." A pre-existing
condition will be covered without a waiting period when an employee joins a
new group plan if the employee has been insured for the previous 12 months
with credible health insurance, with no lapse in coverage of 63 days or more.
This means that if an employee has been insured for 12 months or more, the
employee will be able to go from one job to another and his or her pre-existing
coverage will remain intact -- without additional waiting periods. However,
if an employee has a pre-existing condition and was not covered previously
for 12 months before joining a new plan, the longest the employee will have
to wait for their pre-existing coverage to be covered is 12 months.
health maintenance organization (HMO)
A health care financing and delivery system that provides comprehensive
health care for subscribing members in a particular geographic area using managed
care techniques. Most HMOs require that you only utilize physicians within
their network, often going so far as to require you to choose a primary care
physician who directs most courses of your treatment.
home health care
Skilled medical care and other health care services that you receive
in your home for the treatment of an illness or injury. Some insurance plans
don't provide this kind of coverage, or provide it only for a limited amount
Also called a fee-for-service plan. A health insurance plan that allows
the insured to use any medical provider that he or she chooses. As such, there
are no networks to utilize.
individual practice association (IPA)
A type of open-panel HMO that contracts with an association of physicians
who agree to provide services for HMO members.
Medical procedures which require the patient to spend at least one
night at the hospital. Most plans limit the amount of time an inpatient may
stay at the hospital following surgery.
A person authorized by an insurance company to represent the company
in its dealings with applicants for insurance.
The person whose life or health is insured under an insurance policy.
Also referred to as a "member."
Sorry, we have no glossary items beginning with the letter “J”.
Sorry, we have no glossary items beginning with the letter “K”.
This option is offered by some plans to provide a set amount of life
insurance for the insured's spouse, domestic partner or children.
The maximum amount of money a plan will pay towards healthcare services
over the course of the insured's lifetime.
major medical insurance plan
A type of traditional medical expense coverage that provides substantial
benefits for hospital surgical expenses and physicians' fees.
A method of integrating the financing and delivery of health care
within a system that seeks to manage the cost, accessibility and quality of
Many individual plans and some small-group plans for groups of fewer
than 15 employees don't cover the costs associated with pregnancy and birth.
However, federal law requires that group plans cover maternity if a group has
15 employees or more.
The person whose life or health is insured under an insurance policy.
Also referred to as the "insured."
mental health - inpatient
Inpatient mental health care is generally reserved for severe mental
health problems, such a schizophrenia and severe depression. State laws vary
widely on the degree to which insurance companies must cover mental illness.
Most plans do provide some coverage, though there may be limitations such as
the severity or nature of the illness and the duration of care.
mental health - outpatient
Outpatient mental health benefits are generally divided into two categories,
severe and non-severe health care. State laws vary widely on the degree to
which insurance companies must cover mental illness. Most plans do provide
some coverage, though there may be limitations such as the severity or nature
of the illness and the duration of care.
msa -- benefits
The newest choice in health insurance for the self-employed, Medical
Savings Accounts (MSAs) allow you to build up a tax-free savings account to
pay for routine medical expenses.
You build the account with tax-free dollars, and they remain tax-free while
your MSA is active. Your MSA is used in conjunction with a high-deductible
With the high-deductible insurance plan, the cost of an MSA can be kept competitively
low. Tax-free dollars and an affordable price save you money.
A group of doctors, hospitals and other health-care providers contracting
with a health plan, usually to provide care at special rates and to handle
paperwork with the health plan.
Non-formulary drugs often require a higher copayment. Non-formulary
drugs are those that have not yet been reviewed or have been denied formulary
status, typically because they offer no extra benefit over the drugs already
on a plan's formulary list.
non-severe mental health
Non-severe mental health problems are generally psychologically-based,
such as phobias, manias and mild-to-moderate depression. In most cases, these
problems can be treated without a stay at a treatment facility.
Any time you visit a doctor at his or her office for medical care.
Health care services received outside the HMO, POS or PPO network.
Any medical care costs not covered by insurance, which must be paid
by the insured.
Surgery that does not involve an overnight stay in a hospital.
Not all plans cover physical therapy -- a program of special exercises
that can help an injury heal without restricting movement or limiting function.
An HMO plan that also incorporates an indemnity plan option allowing
members to obtain medical care from providers outside of the HMO network at
a reduced benefit and at greater out-of-pocket expense.
A written document that contains the terms of the contractual agreement
between an insurance company and the owner of policy.
The period of time that the policy is to remain in force.
The person or business that owns an insurance policy.
Group insurance coverage that can be continued by an insured employee
who leaves the covered group.
A component of utilization review under which the utilization review
organization determines whether an insured's proposed non-emergency hospital
stay or some other type of care is most appropriate and what the length of
an approved hospital stay may be.
(1) According to most individual health insurance policies, an injury
that occurred or a sickness that first appeared or manifested itself before
the policy was issued and that was not disclosed on the application for insurance.
(2) According to most group health insurance policies, a condition for which
an individual received medical care during the three months immediately prior
to the effective date of his coverage.
pre-existing conditions provision
A health insurance policy provision stating that benefits will not
be paid for any illness and/or condition that existed prior to one becoming
an insured under the particular health plan in question, until the insured
has been covered under the policy for a specified period.
preferred provider organization (PPO)
An organization where providers are under contract to an insurance
company or health plan to provide care at a discounted or negotiated rate.
Typically, you can see any doctor in the PPO network without requiring special
approval, and you usually do not need to choose a primary care physician. Most
PPOs will also allow you to seek care outside of the PPO network; however,
the benefits are usually reduced and the insured has a greater out-of-pocket
A specified amount of money that the insurer receives in exchange
for its promise to provide health insurance to an individual or a group.
prescription drug coverage (Rx)
A type of specified expense coverage that provides benefits for the
purchase of drugs and medicines prescribed by a physician and not available
over-the-counter. Often a plan will provide a prescription drug card that allows
the insured to obtain medications by simply paying a copay at a participating
primary care physician (PCP)
A general or family practitioner who serves as the insured's personal
physician and first contact with a managed care system. The PCP will usually
direct the course of your treatment and/or refer you to other doctors and/or
specialists in the network.
The length of time that a new group member must wait before becoming
eligible to enroll in a group insurance plan.
The preliminary amount of premium the insured and/or group will pay
per month before underwriting factors are considered.
The specified date of when the health insurance coverage will renew
for another period, typically one year.
routine annual exam
A yearly medical "checkup," during which your doctor will
perform simple medical care such as checking your height, weight, vision and
blood pressure, as well as screening for problems like colon cancer, cervical
cancer, prostate cancer and high cholesterol.
rx drug: formulary/non-formulary
Some plans divide all drugs into two categories: formulary or non-formulary.
If you have drug coverage, your prescription (RX) copayment may be different
for formulary and non-formulary drugs.
severe mental health
As defined by the American Psychiatric Association in their Diagnostic
and Statistical Manual (DSM), severe mental illness includes the following
disorders: schizophrenia, schizoaffective disorder, bipolar disorder (manic-depressive
illness), major depressive disorders, panic disorder, obsessive-compulsive
disorder, pervasive developmental disorder or autism, anorexia nervosa and
bulimia nervosa. Such problems generally require at least occasional inpatient
This type of coverage pays a percentage of your salary if you become
temporarily disabled, meaning that you are not able to work for a short period
of time due to sickness or injury (excluding on-the-job injuries, which are
covered by workers compensation). The per-week amount is usually 50, 60 or
66 2/3 percent of your weekly salary, and lasts for a period of time specified
by the plan.
short-term medical coverage
Similar to flex-term medical coverage. Short-term medical coverage
is a major medical plan designed to protect you in the event of an illness
or injury during "gaps" in your traditional medical coverage -- when
you are between jobs or plans, a recent graduate, on strike, etc. Short-term
plans are not meant to cover routine exams and preventive care; if you are
looking for a choice of plan types and the ability to renew your plan beyond
one year, a traditional medical plan, while typically more expensive, may be
a better fit for your health insurance needs.
A level of care for patients who need intensive, 24-hour nursing supervision.
This can take place in the home or in skilled nursing facilities, which offer
services such as rehabilitation and specialized nutrition.
A health insurance plan that is specifically designed for employers
with a number of employees under a specified amount.
standard industrial classification (SIC)
The Standard Industrial Classification (SIC) system is a series of
number codes that attempts to classify all business establishments by the types
of products or services they make available. Establishments engaged in the
same activity, whatever their size or type of ownership, are assigned the same
SIC code. These definitions are important for standardization. Insurance companies
use SIC codes to determine specific rates for various industries. HealthInsurance.com
uses these codes to ensure that you receive the best possible rate for your
standard risk rate
The risk category that is composed of proposed insureds who have a
likelihood of loss that is not significantly greater than average.
A major medical policy provision under which the insurer will pay
100 percent of the insured's eligible medical expenses after the insured has
incurred a specified amount of out-of-pocket expenses in deductible and coinsurance
This kind of coverage provides extra financial security for you and
your family in the event of accidental death or dismemberment.
term life insurance
A type of life insurance that provides a death benefit if the insured
dies during a specific period.
Insurance company employees who are responsible for identifying and
classifying the degree of risk represented by a proposed insured.
The process of identifying and classifying the degree of risk represented
by a proposed insured.
Urgent care is appropriate when a medical urgency arises which necessitates
immediate care, but has not reached the level of extreme emergency. Most managed
care plans require you to seek urgent care at a participating urgent care facility
usual, customary and reasonable fee
The maximum dollar amount of a covered expense that is considered
eligible for reimbursement under a major medical policy.
vision care coverage
A type of specified expense coverage that provides benefits for expenses
the insured incurs in obtaining eye examinations and corrective lenses.
well baby care
The goals of well baby care are 1) to immunize; 2) to provide parents
with reassurance and counseling on safety, nutrition and behavioral problems;
and 3) to identify and treat physical and developmental problems.
Sorry, we have no glossary items beginning with the letter “X”.
Sorry, we have no glossary items beginning with the letter “Y”.
Sorry, we have no glossary items beginning with the letter “Z”.
Reprinted with permission from Kelsey National Corporation.