Insurance Glossary

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  • ADMITTING PRIVILEGES

    A doctor’s right to admit patients to a particular hospital.

  • ADVOCACY

    Any action that help a person or group to get something the person or group needs or wants.

  • AGENT

    Licensed salesperson who represents one or more health insurance companies and presents their products to consumers. 

  • ASSOCIATION

    A group. Often, associations can offer individual health insurance plans specially designed for their members.

  • BENEFIT

    Amount to be paid by the insurance company to a claimant, assignee, or beneficiary when the insured suffers a loss. 

  • 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 plans from multiple sources in order to pass on information to clients.

  • CAPITATION

    Capitation represents a set amount that you or your employer pay to a health maintenance organization (HMO), regardless of how much you use - or don't use - the services offered by the health maintenance providers. Carrier: The insurance company or HMO offering a health plan. 

  • CASE MANAGEMENT

    Case management is a system used by employers and insurance companies to ensure that individuals receive appropriate, reasonable health care services.

  • CERTIFICATE OF INSURANCE

    A printed list of the benefits and coverage provisions forming the contract between the carrier and the customer. Discloses what it covered, what is not, and dollar limits. 

  • CLAIM

    A request from an individual (or his or her provider) to an individual's insurance company for the insurance company to pay for services obtained from a health care professional.

  • CO-INSURANCE

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

  • CO-PAYMENT

    Co-payment is a predetermined flat fee that an individual pays for health care services, in addition to what the insurance covers. For example, some HMOs require a $10 "co-payment" for each office visit, regardless of the type or level of services provided during the visit. Co-payments are not usually specified by percentages.

  • COBRA

    Federal legislation that lets you, if you work for an insured employer group of 20 or more employees, continue to purchase health insurance for up to 18 months if you lose your job or your coverage is otherwise terminated. For more information, visit the Department of Labor.

  • CREDIT FOR PRIOR COVERAGE

    This is something that may or may not apply when you switch employers or insurance plans. A pre-existing condition waiting period met under while you were under an employer's qualifying coverage can be honored by your new plan, if any interruption in the coverage between the two plans meets state guidelines. 

  • DEDUCTIBLE

    The amount an individual must pay for health care expenses before insurance or a self-insured company covers the costs. Often, insurance plans are based on yearly deductible amounts.

  • DENIAL OF CLAIM

    Refusal by an insurance company to honor a request by an individual (or his or her provider) to pay for health care services obtained from a health care professional. 

  • DEPENDENT WORKER

    A worker in a family in which someone else has greater income.

  • DEPENDENTS

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

  • EFFECTIVE DATE

    The date your insurance is to begin. You are not covered until the policies effective date.

  • EMPLOYEE ASSISTANCE PROGRAMS (EAPS)

    Mental health counseling services that are sometimes offered by an insurance company or employer. Typically, individuals or employers do not have to directly pay for services provided through an employee assistance program. 

  • EXCLUSIONS

    Medical services not covered by an individual's insurance policy.

  • EXPLANATION OF BENEFITS

    The insurance company's written explanation to a claim, showing what they paid and what the client must pay. Sometimes accompanied by a benefits check. 

  • FLEXIBLE SPENDING ACCOUNT (FSA)

    The insurance company's written explanation to a claim, showing what they paid and what the client must pay. Sometimes accompanied by a benefits check.

  • GENERIC DRUG

    A "twin" to a "brand name drug" once the brand name company's patent has run out and other drug companies are allowed to sell a comparable version of the original. Generic drugs are cheaper, and most prescription and health plans reward clients for choosing generics. 

  • GROUP INSURANCE

    Coverage through an employer or other entity that covers all members of the group.

  • HEALTH CARE DECISION COUNSELING

    Services that help individuals weigh the benefits, risks and costs of medical tests and treatments. Unlike case management, health care decision counseling is non-judgmental. The goal of health care decision counseling is to help individuals make more informed choices about their health and medical care needs, and to help them make decisions that are right for the individual's unique set of circumstances.

  • HEALTH MAINTENANCE ORGANIZATIONS (HMOS)

    Health Maintenance Organizations represent "pre-paid" or "capitated" insurance plans in which individuals or their employers pay a fixed monthly fee for services, instead of a separate charge for each visit or service. The monthly fees remain the same, regardless of types or levels of services provided, Services are provided by physicians who are employed by, or under contract with, the HMO. HMOs vary in design. Depending on the type of the HMO, services may be provided in a central facility, or in a physician's own office (as with IPAs.)

  • HEALTH SAVINGS ACCOUNT (HSA)

    is a tax-advantaged medical savings account available to taxpayers who are enrolled in a High Deductible Health Plan (HDHP). The funds contributed to the account are not subject to federal income tax at the time of deposit. Unlike a Flexible spending account (FSA), funds roll over and accumulate year over year if not spent. HSAs are owned by the individual, which differentiates them from the company-owned Health Reimbursement Arrangement (HRA) that is an alternate tax-deductible source of funds paired with HDHPs. Funds may be used to pay for qualified medical expenses at any time without federal tax liability. Withdrawals for non-medical expenses are treated very similarly to those in an IRA account in that they may provide tax advantages if taken after retirement age, and they incur penalties if taken earlier.

  • HIGH DEDUCTIBLE HEALTH PLAN (HDHP)

    A 1996 Federal law that allows individuals to qualify immediately for comparable health insurance coverage when they change employment or relationships. It also creates the authority to mandate the use of standards for the electronic exchange of health care data; to specify what medical and administrative code sets should be used within those standards; to require the use of national identification systems for health care patients, providers, payers (or plans), and employers (or sponsors); and to specify the types of measures required to protect the security and privacy of personally identifiable health care. Full name is "The Health Insurance Portability and Accountability Act of 1996."

  • IN-NETWORK

    Providers or health care facilities which are part of a health plan's network of providers with which it has negotiated a discount. Insured individuals usually pay less when using an in-network provider, because those networks provide services at lower cost to the insurance companies with which they have contracts.

  • INDEMNITY HEALTH PLAN

    Indemnity health insurance plans are also known as "fee-for-service." These are the plans that primarily existed before the rise of HMOs, IPAs, and PPOs. With indemnity plans, the individual pays a pre-determined percentage of the cost of health care services, and the insurance company (or self-insured employer) pays the other percentage. For example, an individual might pay 20 percent for services and the insurance company pays 80 percent. The fees for services are defined by the providers and vary from physician to physician. Indemnity health plans offer individuals the freedom to choose their health care professionals. 

  • INDEPENDENT PRACTICE ASSOCIATIONS

    IPAs are similar to HMOs, except that individuals receive care in a physician's office, rather than in an HMO facility.

  • INDIVIDUAL HEALTH INSURANCE

    Health insurance coverage for an individual, not a group. The premium is usually higher for an individual health insurance plan than for a group policy, depending on your qualifications for a group plan.

  • 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 benefits paid out for a covered expense, as specified on the Certificate of Insurance.

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