Questions to Ask Before Buying Health Insurance in California:

How important is it to you to keep the doctor you have now?  
By knowing the answer to this question will help you figure out whether having an HMO or PPO will best fit your california health insurance needs.
Before calling for quotes, ask your doctor which companies are in their network. If you are new to your area make sure there is a good choice of doctors to pick from. Decide how important it is to you to be able to move around from one specialist to another. Some plans can make you wait 2 to 3 weeks to see a specialist and limit who you can use.
 
 
Do you frequently get treated by alternative kinds of care, like acupuncture, homeopathy, massage therapy, etc?
Certain companies and plans do limit or may not cover these types of services. Be award of the limitations.
   
Using an agent doesn't cost me anything?

Health insurance agents are paid directly by the company. Buying direct or not doesn't save you any money.

Tips when shopping for individual insurance:
Shop carefully. Policies differ widely in coverage and cost. Compare different plans and companies.
Make sure the policy protects you from large medical costs.
Read and understand the policy. Make sure it provides the kind of coverage that's right for you.
Check to see that the policy states: the date that the policy will begin paying (some have a waiting period before coverage begins), and what is covered or excluded from coverage.
Make sure there is a "free look" clause. Most companies give you at least 10 days to look over your policy after you receive it. If you decide it is not for you, you can return it and have your premium refunded.
Beware of single disease insurance policies. There are some polices that offer protection for only one disease, such as cancer. If you already have health insurance, your regular plan probably already provides all the coverage you need. Check to see what protection you have before buying any more insurance.

A&H, A&S or Accident and Health Insurance and Accident and Sickness Insurance:
In the past, these terms were used to define health insurance in general.

Accelerated Benefits:
A type of benefit rider for life insurance plans which allows the policy holder to use their benefits to cover the costs of nursing home care.

Access:
The accessibility for health care for a particular patient. Access may vary according to the policy holder’s location, or the type of health care services that are offered in that particular location.

Accident and Health Insurance (A&H):
An antiquated term for health insurance.

Accident and Sickness Insurance (A&S):
Also an antiquated term for health insurance.

Accidental Death and Dismemberment:
A type of policy provision for a Disability Income health insurance policy. This provision will either pay a set amount or a weekly benefit if the policy holder loses their sight, suffers the loss of two limbs in an accident, or dies. If the policy holder loses sight in only one eye, or loses only one limb, the payment amount is less.

Accident Death Benefit:
An additional benefit which will normally have the same value as the face of the contract or a set amount, which is paid on the event of the death of the policy holder after an accident.

Accidental Death Insurance:
A type of insurance that will pay if the policy holder dies as the result of an accident. This type of policy is normally found as a component of an accidental death and dismemberment policy.

Accrete:
A term used by Medicare which is defined as adding additional members to an existing health plan.

Actively-at-work:
A stipulation for insurance policies that require employees to be actively at work on the day the policy begins. If the employee is not at work, coverage will not begin until the employee returns to their place of employment.

Activities of Daily Living (ADL)
The normal daily routine for an individual that is accomplished without assistance from another. This commonly includes simple tasks, such as eating, dressing, bathing and mobility.

Activities of Daily Living Standards:
A method of determining if an individual is capable of living independently and performing activities of daily living (ADL) on their own, without the aid of another individual. These standards may determine eligibility for long term care insurance.

Actual Charge:
The actual dollar amount that a physician will charge for their services.

Acute Care:
A type of medical care requiring the efforts of skilled workers, either medical or nursing professional, to restore an individual to a healthy condition.

Additional Drug Benefit List:
This can also be referred to as a drug maintenance list and consists of the prescribed medications that are required by a patient for long term care. This list can be reviewed at the discretion of a health insurance company.

Additional Monthly Benefit:
Benefit riders that can be added-on to certain policies, such as disability income policies, that will provide benefits above and beyond during the first year of an individual’s claim. Is normally used in the interim while waiting for Social Security Benefits to take effect.

Adjusted Average Per Capita Cost (AAPCC):
An average cost, normally estimated, for Medicare benefits. This cost is determined by several factors, such as location, age, sex, disability, stage renal disease or institutional status. This cost estimate is then used to figure out how much cost contractors with Medicare should be paid.

Adjusted Community Rating (ACR):
This can also be referred to as factor rating. It is a rating based on different factors for a specific group.

Admissions/1000:
The amount of admissions in a hospital for each 1,000 members that are participating in a certain health plan.

Admits:
This refers to how many people, both in-patient and out-patient, have been admitted to a hospital on any given day.

Adult Day Care:
A type of group program that is used to provide adults who are facing some sort of impairment with health care, as well as social interaction. These facilities are normally located outside the adult’s home.

Aftercare:
Services offered to individual patients to assist them after hospitalization and rehabilitation.

Age Change:
Insurance policies set a date, usually six months after a policy holder’s birthdate, where a the policy holder’s age changes for insurance purposes. Rate structures are determined by these age changes and may be different based on a company’s preferences.

Age/Sex Factor:
This is a method of comparing different age and sex risks for medical costs from one group to another. If the age/sex factor is greater than 1.0, this figure indicates a higher risk. An age/sex factor risk less than 1.0 means that the group has a lower average risk. This is normally used in underwriting.

Age/Sex Rates:
Different rates are calculated for groups in age and sex categories. This type of rate is normally higher in preference than single or family ratings. This can also be referred to as a table rate.

Aggregate Indemnity:
The largest amount of money that a policy holder can claim for a disability for any duration of the disability, or for the entire policy.

Allied Health Personnel:
This term is also referred to as paramedical personnel. An allied health personnel performs tasks normally associated with physicians, dentists, podiatrists, nurses, optometrists or chiropractors.

Allocated Benefits:
A set amount of authorized payments with a specified maximum amount for each payment. For example, a hospital policy for an MRI would have a set amount of scheduled benefits.

Allowable Charge:
The amount of a health care charge that Medicare Type B will cover. Typically the lesser amount of a complete charge, the prevailing charge and the customary charge.

Allowable Costs:
Expenses that are covered charges by a policy.

Alternative Delivery Systems:
This may include PPO, HMO and IPA plans. These plans are different from customary fee-for-service plans.

Alzheimer’s Disease:
An irreversible disease of the brain that is progressive in nature. It causes a acute loss of memory, which can necessitate dependence on others for simple care.

Ambulatory Care:
A type of care or procedure which does not require a patient to check in to the hospital. Comparable to outpatient care.

Ambulatory Setting:
Clinics or institutions that provide outpatient health care. Can include surgical centers and health clinics.

Ancillary:
Fees above and beyond room and board associated with hospitalization. May include x-rays, lab work, anesthesia and other procedures. May also refer to actual fee charges. This term can also include prescriptions which go beyond an insurance plan’s Maximum Allowable Cost (MAC.)

Ancillary Benefits:
Benefits that include payment for ancillary procedures.

Approved Charge:
A term used to define the maximum amount that Medicare will pay for a specific service.

Approved Health Care Facility or Program:
A type of program or a facility that a health care plan has approved for services in a contract.

Assignment:
An assignment is an authorization that allows Medicare to make benefit payments to a provider. This type of payment will only include participating Medicare providers.

Assignment of Benefits:
When a policy holder assigns payment of benefits to a hospital or health care provider, it is referred to as an assignment of benefits.

Average Cost Per Claim:
The absolute total cost for medical services and/or administrative services that will be divided among “units of exposure” which may include number of admissions, or outpatient claims.

Average Length of Stay (ALOS):
The number of admissions and discharges divided by the total amount of patient days. This figure is calculated over a set period of time and provides insurance companies with an estimate of the average number of days that each person spent in the hospital. Average Wholesale Price (AWP):
According to the Medicare Catasrophic Coverage Act, pharmacies are required to restrict charges for prescription medications to the lowest actual charge, the sum of the AWP for certain prescription plans with an administrative allowance included or the 90th percentile of pharmacy charges. (Effective 1992.)

Base Capitation:
The complete amount of coverage which includes the cost of care per person. This does not include mental health or substance abuse services, nor does it include pharmacy or administrative charges.

Basic Hospital Expense Insurance:
A type of coverage that covers hospital room and board and other hospital expenses for a certain number of days of confinement.

Bed Days/1000:
The amount of inpatient days per every 1000 policy holders of a health plan.

Benefit Levels:
The maximum amount each policy holder is entitled to collect for certain services. This is usually delineated in a health plan policy contract.

Benefit Package:
The description of the kinds of benefits that a policy holder can expect for a certain health plan.

Benefit Period:
A benefit period is used to define when a Medicare beneficiary can claim Part A benefits. This period is typically 90 days and begins the first day of admission, continuing until the patient has not been an inpatient for a period of 60 consecutive days.

Billed Claims:
The total amount of claims that are submitted by a health care provider which include services for a specific individual covered by a health plan.

Birthday Rule:
A method of calculation to determine which parent’s medical coverage is primary for a dependant child. Normally, the parent whose birthday falls earlier in the year will be considered primary.

Insurance:
A type of health coverage that covers all of a class of policy holders that are not identified individually in a contract.

Blue Cross:
Blue Cross Plans are designed to provide nonprofit hospital expense plans and coverage for hospitalization. There may be some restrictions of the type of accommodations a patient may have under this type of plan.

Blue Plan:
A term used for companies that provide Blue Cross or Blue Shield service contracts. These companies are allowed to display the Blue Cross or Blue Shield insignia.

Blue Shield:
This type of plan is a prepayment plan for surgical and medical expenses. Offered by non-profit organizations.

Board Certified:
A health care professional who has passed tests to certify them as a specialist.

Board Eligible:
A health care professional who is eligible to take specialty examinations.

Business Overhead Expense:
A type of policy known as a disability income policy which will indemnify a business for overhead expenses that occur when the owner of the business becomes completely disabled.

COB:
Coordination of Benefits.

Calendar Year:
This refers to the period between January 1 and December 31 of the same year. Deductibles are commonly calculated on a calendar year scale, as well as surgical and medical plans.

Capitation (CAP):
A rate, usually monthly, that is paid to a specific health care provider. In exchange, this provider agrees to provide care services for patients covered by this plan.

Carrier:
The Department of Health and Human Services contracts with commercial insurers to process Medicare Part B claims payments. These companies are referred to as carriers.

Carrier Replacement:
A carrier replacement occurs when a current carrier is replaced by a new carrier.

Carryover Provision:
A provision in medical policies which allows a policy holder who has not submitted any claims in a one year period to apply expenses incurred during the last three months of that year towards the next year’s deductible.

Case Management:
An assessment of a policy holder’s needs over the long term – ie:
care recommendations, as well as follow-ups.

Case Manager:
A skilled professional who is in charge of case management and coordinates services for policy holders.

Case Mix:
The amount of cases that have different needs and/or require different resources from hospitals.

Catastrophe Policy:
An antiquated term for Major Medical.

Certificate of Authority (COA):
This certificate is issued by the state and provides licensing for Health Maintenance Organizations (HMO).

Certificate of Need (CON):
This is a certificate issued by a government body. This certificate states that a facility has the ability to meet requirements for prospective patients. This may include adding on to current facilities, providing different types of health care or purchasing new equipment.

Cestui Que Vie:
A term that is defined as a policy holder, or the person that has taken out a policy for trust, estate, gift or an insurance policy.

Chemical Dependency Services:
The type of care that is required to treat or diagnose chemical dependency.

Chemical Equivalents:
Often referred to as “generics.” Medications that have the same amounts of the same ingredients as other medications.

Christian Science Organization:
An organization that is certified by the First Church of Christian Scientists. This type of facility may also be Medicare certified and may include hospitals or long term care facilities.

Civilian Health and Medical Programs of the Uniformed Services (CHAMPUS):
This program provides supplementation for family members of military personnel, whether they are living, on active duty, retired or deceased.

Closed Access:
This term means that a policy holder must have only one primary care physician. This physician is the only one that will be allowed to provide referrals to the policy holder to other physicians or care specialists in the network. May also be referred to as Closed Panel or Gatekeeper Model.

Cognitive Impairment:
An inability of the brain to function correctly, for example, processing information, perceive, reason or think correctly. This usually results in an inability to function on one’s own.

Coinsurance Clause:
A type of clause or provision that states that the policy holder must share in losses that are covered by their policy for an agreed upon amount. For example, a co-insurance rate of 10% means that the policy holder would need to provide 10% payment for a procedure and the insurance company would provide 90%.

Commercial Policy:
An antiquated term that refers to the sale of health insurance to individuals, as opposed to industrial workers. This term is currently used to define insurance policies that are not guaranteed for renewal.

Community Rating:
A type of rating system that calculates the charge for insurance policies based on current medical costs for a particular community or area. This system does not take into account individual needs.

Competitive Medical Plan (CMP):
This type of plan involves the federal government allowing a particular organization to draft a Medicare risk contract.

Composite Rate:
A single rate for all members belonging to a certain group, that does not take into account their status as members of a family or a single person.

Comprehensive Major Medical:
This type of insurance features a low deductible, high amount of maximum benefits as well as co-insurance. This insurance plan is a combination of major medical coverage and basic coverage and has grown in popularity to replace other policies, such as hospital and surgical policies.

Concurrent Review:
A technique that is used in case management which will allow an insurance company to oversee the hospital stay of their policy holders and be notified in advance of any changes in the policy holder’s care.

Conditional Binding Receipt:
This is also referred to as a binding receipt. This means that if a new applicant for an insurance policy includes their premium with their application, the start date of their coverage begins on the date the application was filled out, or the date of their medical examination, if they are approved.

Conditionally Renewable:
A type of contract between an individual and an insurance company that allows them to renew their policy on a certain date or age, but allows the company the right to deny renewal under conditions that are stated within the contract.

Confining:
This refers to a sickness or condition that forces a patient to be confined indoors, either in their own home or at hospital. There are certain policies that will only provide coverage if the policy holder is confined.

Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1986:
The legislation provided a continuation of group health care benefits for a certain amount of time, instead of immediately terminating as they had in the past. This allows insurance coverage to continue for up to 18 months after the insured leaves their place of employment. Otherwise, coverage is extended up to 36 months in other cases.

Continuation:
This lets employees that have been terminated continue holding their health insurance policies as long as they fulfill certain conditions.

Continuing Care Retirement Communities:
(CCRC’s):
This is a type of community, usually residential, that allows residents access to health care.

Contract Year:
The period of time between the effective date of a new policy to the expiration date.

Coordination of Benefits (COB):
A type of provision in a group health policy which allows members with more than one insurance policy to determine who the primary carrier is. This prevents claim overpayment.

Copay:
This is an agreement worked out between a policy holder and an insurance company where the policy holder agrees to pay a set amount for certain procedures, services or medications covered by a prescription plan. This amount is usually a set dollar amount, as opposed to co-insurance which is usually figured on a percentage rate.

Copay Provision:
This is a provision which states exactly how much an insurance company will pay under a copay situation and what the policy holder is expected to pay.

Corridor Deductible:
A type of Major Medical deductible which allows a deductible or “corridor,” following complete payment of basic medical expenses that fall under a certain amount. If fees exceed this amount, payment may be calculated on basis of participation or by co-insurance. The amount that the policy holder provides is counted as the deductible.

Cosmetic Procedures:
Non-medically necessary surgery or procedures that are performed to improve the appearance by not the health of a policy holder.

Cost Contract:
A type of agreement that takes place between a health care financing administrator and a provider to provide services for covered individuals. This is normally based on fixed, reasonable costs.

Cost of Living Benefit:
A type of disability benefit that is option and allows the monthly disability benefit payment to increase each year, after a period of 12 months has elapsed.

Cost Sharing:
This refers to policy holders providing some payments for their own medical care, such as deductibles, co-payments or co-insurance payments.

Covered Expenses:
Medical services or procedures that are covered by an insurance company and allow reimbursement for policy holders.

Covered Person:
A policy holder that is protected by a health insurance plan and provides payment for premiums for these benefits.

Credentialing:
A system of criteria for providers to determine if they can meet eligibility requirements.

Credit Health Insurance:
A contract that is for group disability income insurance, where a creditor is shielded in the event that a debtor becomes disabled. The disability policy will be responsible for monthly payments to the creditor.

Credit Insurance:
Debtor insurance for policy holders that allows creditors to be paid off on a balance that is due on a loan in the event that the policy holder becomes disabled.

Custodial Care:
This includes basic care, such as dressing, eating, bathing or taking prescriptions. It is not necessary that the provider be a physician or health care professional, but they must be working under a doctor’s orders.

Date of Service:
The date that health care services were provided.

Death Spiral:
A type of destructive cycle that happens in an indemnity plan after increased HMO infiltration. This commonly results from young employees selecting HMO plans while indemnity plan rates go up. Employers and HMO pricing exacerbate death spirals.

Deductible Carryover Credit:
This allows expenses that are incurred during the last three months of a calendar year to be credited towards the next year’s deductible.

Deferred Compensation Administrator:
A type of company that provides a services and agrees to accept deferred compensation. Types of services can be salary surveys, planning for retirement or self-insured plans.

Delete:
A process where a Medicare policy holder is removed from active coverage.

Dental Insurance:
A type of Group Health Contract that reimburses health care professionals for dental procedures that are specified in advance.

Department of Health and Human Services:
A United States federal agency that governs social services and Medicare programs.

Dependent Coverage:
A policy that includes coverage for the main policy holder as well as their dependents or spouse that are not employed full-time. Children may refer to adopted, foster or step-children and age requirements usually apply.

Designated Mental Health Provider:
A provider that is selected by a health plan to handle mental health or substance abuse services for their policy holders.

Detoxification:
A period of withdrawal from alcohol or drugs. This is normally overseen by a health care professional.

Diagnosis:
The method which is used to pinpoint a certain disease or condition.

Diagnosis Related Groups (DRGs):
A type of classification for certain inpatient services. It can be used to figure out how much financing is needed to reimburse health care providers for their services.

Disability Benefits Law:
A type of state law that compels employers to provide disability benefits for their eligible employees for certain non-occupational injuries. This is different from Workers Compensation which is intended to provide coverage for injuries suffered while on the job. The following states have this law in place:
Hawaii, California, New Jersey, New York and Rhode Island.

Disability Buy-Sell:
A type of disability income policy which is used to provide funding for a disability buy-sell agreement whereby the business interest of a particular disabled stockholder follows an elimination period. This type of policy may provide monthly payments or a lump sum payment.

Disability Income Insurance:
A type of insurance plan that provides payments periodically that will replace income that is lost, whether actively or presumptively, after the policy holder is disabled or unable to work after an injury or sickness.

Disability Insurance Training Council, Inc.:
The International Association of Health Underwriter’s educational division. This division encourages local health associations to provide agent educational projects and seminars for Health Underwriting areas, as well as providing seminars annually for executives in a home office environment in sociological social insurance and trends that may affect health insurance plans in the future.

Discharge Planning:
Figuring out what a policy holder will require after they are discharged from the hospital.

Dismemberment:
This loss of a part of the human body, such as an arm or a leg that is the result of an accident.

Dismemberment Benefit:
Benefits that cover certain types of dismemberment.

Dread (or Specified) Disease Policy:
A type of coverage which normally has a high maximum limit for diseases that are specified within the contract. This diseases may include poliomyelitis, multiple sclerosis, diphtheria, spinal meningitis or tetanus. Cancer may or may not be covered, depending on the company and may be available as a rider.

Drug Formulary:
A list of prescription drugs that are permitted for use and are covered by a prescription plan and sold by a participating pharmacy.

Drug Price Review (DPR):
A type of procedure that is used to discern drug price maximums. This is important when calculating wholesale prices for prescriptions using the American Druggist Blue Book.

Drug Utilization Review (DUR):
A type of review that is used to find out which drugs can be used in certain types of drug therapy.

Dual Choice:
A federal requirement that states employers who have more than 25 employees that live within a service area of a federally qualified HMO, and who are providing at least minimum wage to these employees, must offer their employees the choice of an HMO plan as well as an indemnity plan, if they are offering health insurance coverage.

Duplicate Coverage Inquiry (DCI):
A type of request that is intended to discern if more than one coverage type exists. This is used for coordination of benefits provisions if a policy holder has more than one insurance policy and/or health insurance provider.

Duplication of Benefits:
When identical or overlapping coverage occurs between two or more insurance companies, this is referred to as duplication of benefits.

Elective Benefits:
A complete payment for benefits. Certain companies allow policy holders to elect to receive a lump sum as opposed to periodic payments for certain injuries.

Eligibility Date:
The date where a policy holder is eligible to receive benefits.

Eligibility Period:
(1)The duration of time in which potential members of a program, such as Group Life or Health, can enroll without having to provide insurability evidence. (2) The amount of time in which reimbursable expenses can be incurred under a Major Medical policy.

Eligibility Requirements:
Standards that are required for coverage eligibility that are delineated in a contract.

Eligible Dependent:
A dependent of a policy holder that is eligible for coverage under the policy holder’s insurance plan.

Eligible Employee:
An employee of a company that currently has a group contract, who fits the requirements to become a member of the group policy.

Eligible Expenses:
The types of expenses that a health insurance policy will cover.

Eligible Person:
A person that is eligible for a health plan and meets contract requirements. Similar to eligible employee.

Elimination Period:
A term that is normally used loosely. It may apply to a probationary period or a waiting period in health insurance policies.

Emergency:
A sudden event that results in injury or disease and necessitates treatment within a 24 hour period.

Emergency Accident Benefit:
A type of group medical benefit that will provide coverage and/or reimbursement for treatment that resulted from an accident.

Employee Benefit Program:
A type of insurance coverage or benefit that is offered by a company to eligible employees, These benefits may include medical expenses, retirement, death or disability.

Employee Certificate of Insurance:
Evidence that an employee is taking part in a group insurance plan. This may include a summary of benefits under the plan. Normally a certificate is provided in lieu of an actual copy of the policy.

Employee Contribution:
The amount that an employee must cover for their health costs in a group insurance plan.

Employer Contribution:
The amount that an employer must cover for employee’s health costs in a group insurance plan.

Encounter:
Similar to a “visit.” This term refers to each individual “encounter” or visit with a medical professional. Encounters Per Member Per Year:
The complete amount of encounters for each member during the course of one year. Enrollee:
A person that has a health plan but does not have an eligible dependent.

Enrolling Unit:
A type of organization or employer that contracts with a company for insurance plans.

Enrollment:
The total amount of enrollees in a specific health plan. It can also refer to the process of obtaining enrollment in a plan.

Entire Contract Clause:
A type of provision in an insurance contract which states the complete agreement by and between the policy holder and the insurance company. This may include the actual application, insuring agreement, exclusions, conditions, and/or endorsements.

Evidence of Insurability:
A statement which is needed for an insurance policy underwriter to determine eligibility.

Examination:
This refers to a medical examination for a person interested in obtaining life or health insurance.

Examined Business:
This refers to an applicant who has undergone examination and completed the application, but who has not provided payment for the policy premiums.

Examiner:
A physician selected by the insurance company’s medical director to perform eligibility examinations for potential policy holders.

Exclusive Provider Organization (EPO):
This is similar to a preferred provider organization where members of a policy must select specific preferred providers and do not have a variety of providers from which to choose.

Expected Claims:
Actuarial estimates for how many claims can be expected per person or group in one contract year.

Expected Morbidity:
A morbidity table provides information on how long a sickness or injury is expected to occur for a specific group under a specific amount of time.

Expense:
The amount of money a policy holder must pay to share in a company’s costs, such as operating costs, inspection reports, underwriting, medical examination fees, commissions, advertising, premium taxes, salaries and more. These type of costs determine how much premium rates will be.

Experimental or Unproven Procedures:
Any type of service, procedure, therapy or device that an insurance plan has deemed to be (1) not scientifically proven effective or (2) not accepted by the health care community as being effective.

Explanation of Benefits (EOB):
A statement which is sent out to policy holders delineating health plan listing services, amounts that are covered by the insuring company and expenses to be borne by the policy holder.

Explanation of Medicare Benefits:
A type of statement that is sent to Medicare patients to provide more information on how a claim is to be paid.

Extended Care Facility:
Nursing homes or facilities that provide around-the-clock care for patients, under state or local laws. There are three types of care:
custodial, intermediate and skilled.

Extended Coverage:
This is a provision normally found in Group policies that covers the policy holder for maternity expense benefits for an employee terminated while pregnant.

Extension of Benefits:
A condition in an insurance policy which will provide continuing coverage for a disabled employee or dependent until either the employee returns to work or the dependent leaves the hospital.


FASB:
This stands for the Financial Accounting Standards Board.

Family Dependent:
A person that is eligible for coverage as a policy holders dependent because they:
(1) are the policy holder’s spouse or (2) a single dependent child of the policy holder or the policy holder’s spouse or (3) a resident that is living within the policy holder’s house.

Family Expense Policy:
A type of policy that provides coverage for all members of a covered family for medical care.

Federal Qualification:
The HCFA approves HMO’s after performing evaluations of the HMO’s documents, contracts, facilities, systems and their method of doing business.

Fee-For-Service Equivalency:
The difference between amount that a provider will receive for reimbursement. This includes capitation or a flat fee each month compared to fee-for-service reimbursement.

Fee Maximum:
The maximum total amount that a provider can charge for certain services as provided in a contract.

Fee Schedule:
A list that provides the maximum fees for services to providers.

Field Underwriting:
The beginning screening of potential purchases of health insurance which is performed by the insurance company’s sales force, “in the field.” This can also include premium rate quotes.

Financial Accounting Standards Board (FASB):
A group that sets the standards for accepted accounting principles. A non-governmental agency.

Fiscal Intermediary:
A commercial insurance company that the Department of Health and Human Services contracts with to process and administer Medicare Part A claims.

501( c ) (9) Trust:
A type of voluntary beneficiary association for employees.

Flat Maternity Benefit:
A benefit that is stipulated in a hospital reimbursement policy for maternity confinement, despite actual costs of the confinement.

Flexible Benefit Plan:
This type of plan allows employees to customize their benefits in order to better meet their individual needs.

401 Trust:
This is an account governed by IRS Codes which can be used for tax-free funding for retirement benefits. An employer’s 401 (h) contribution may not exceed 25% of the total contributions to all retiree benefits, including pension benefits. However, liabilities for employers are normally large, and as such, a 401 (h) can only provide incidental funding.

Franchise Insurance:
A type of plan that provides coverage for groups of individual policy holders who have uniform provisions in their policies, but differ in the types of benefits. Separate contracts are issued to these policy holders, with separate underwriting for each one. This normally occurs when a group is too small to be accepted for normal group coverage and solicitation for this type of plan normally takes place in an employee’s work place. It can be referred to as Wholesale Insurance for Life insurance policies. Not to be confused with Total Group Insurance.

Fraternal Insurance:
A type of insurance that is offered to members of a lodge or fraternal order. This type of insurance is normally written on a legal reserve or assessment basis.

Free-Standing Emergency Medical Service Center:
This can also be referred to as an emery-center or urgi-center and is defined as a type of facility that provides outpatient services only.

Frequency:
The amount of procedures provided during a set period of time.

Funding Level:
The amount of money that is necessary to purchase a specific medical care program. This can be calculated by premium rates for the program or by an assessment for expected claim loss and/or related fees for self-funded programs.

Funding Methods:
The accepted way for an employer to pay for health coverage.

Future Increase Option:
A type of option that allows a policy holder to increase their disability income benefits at certain times which are set down in the policy, without needing to provide evidence for insurability.

Gatekeeper Model:
The initial contact or primary care physician in an HMO or PPO plan. This is also referred to as a closed access or closed panel.

General Agent (GA):
A person hired by a life or health insurance company to oversee business in a certain area or territory. This person is responsible for creating their own agency and service staff and is normally paid on a commission basis, with additional expense allowances provided by the insurance company.

General Agents and Managers Conference:
Affiliated members of he National Association of Life Underwriters, including agents and managers.

General LTC Rider:
A type of rider that is attached to a life insurance policy but also acts as a “stand alone” on an independent basis of the policy. The benefits paid out under a general LTC rider do not count towards life insurance benefits.

Generic Drug:
A prescription drug which is the chemical equivalent of a more expensive prescription drug. Also referred to as a generic equivalent. Generic drugs can be produced after the patent for the original drug expires.

Grievance Procedure:
A type of procedure where complaint from a member of a health plan or a provider of benefits can be expressed and resolved.

Group:
A type of insurance plan for a group of individuals that are insured under a single contract. This term is commonly used for employees of a particular employer.

Group Certificate:
A document that is given to each member of a group policy or plan. It delineates benefits that are provided under a contract for the group.

Group Contract:
When an employer contracts with an insurance agency for a group of employees or persons it is referred to as a group contract. The contract will cover their employees for life or health insurance.

Group Credit Insurance:
Insurance that is provided on debtors for life or health insurance for the purpose of their creditors to ensure repayment of debt.

Group Disability Insurance:
A type of insurance for a group of people that covers policy holders in the event of loss of compensation due to sickness or injury.

Group Health Insurance:
A health insurance policy that is provided for a group, usually employees of a common employer.

Group Model HMO:
A group of medical professionals that will receive agreed upon compensation for services provided to policy holders of a particular insurance plan.

Guaranteed Standard Issue (GSI):
A term used in underwriting to define a fact that a group insurance policy was issued without any type of reference to medical underwriting. This means that all the members of the group are covered, regardless of their medical histories.

Home Health Agency:
A type of certified facility that is approved by a health plan under a contract to provide services.

Home Health Care:
Care received at home, which may include part-time nursing services, speech or physical therapy, or part-time aides that provide routine care.

Home Health Services:
Services provided by a certified home health agency that is licensed to provide care in a policy holder’s home. This is normally covered by Part A Medicare.

Health Benefits Package:
The coverage for a group or an individual offered by a health plan.

Health Care Financing Administration (HCFA):
The Department of Health and Human Services has a department which takes care of administrating Medicare and Medicaid programs. This body establishes standards for providers of medical care and requires compliance if the provider wishes to be certified.

Health History:
A type of form utilized by underwriters to evaluate groups or individuals for acceptable risks.

Health Plan:
A type of plan that provides coverage for health services. Typical plans include HMOs, PPOs and POSs.

Health Insurance (HI):
A type of insurance policy that covers against loss from sickness or injury. Usually provides either lump or periodic payments if a loss occurs as the result of a sickness, disease or injury and medical expenses. This term replaces antiquated terms such as Accident Insurance, Sickness Insurance, Medical Expense Insurance, Accidental Death Insurance and Dismemberment Insurance.

Health Insurance Association of America (HIAA):
An association that is supported by life and health insurance companies that promotes research, public relations, education and a legislative base to promote voluntary private health insurance.

Health Insurance Institute (HII):
The arm of the Health Insurance Association of America that is responsible for public relations. This arm provides a flow of information to the public to health insurers and vice versa.

Health Maintenance Organization (HMO):
A type of prepaid medical plan for members which provides health care services with specific providers who have contracted with the health plan. Members of this type of plan must use providers that have contracted with the plan. This is commonly used as an alternative to employee benefit plans and emphasizes preventative care. If an employer has more than 25 employees, they are required to provide an HMO alternative if the cost of the alternative does not exceed the employer’s current benefit plan.

Health Service Agreement (HSA):
A type of agreement between a health plan and an employer which delineates the services, benefits, procedures and standards of the plan itself.

Health Services:
A health contracts covered services.

Hospice:
A type of organization which is dedicated to providing symptom management, pain relief and support services for terminally ill patients and their family members. This type of care is supported by Type A Medicare.

Hospital Affiliation:
One or more hospitals that have contracted with an insurance plan to provide medical services.

Hospital Alliances:
A sharing arrangement between hospitals for services, which reduces health costs. This also allows hospitals to compete with chains and other alliances.

Hospital Benefits:
A type of benefit that covers room and board for a hospital stay, as well as other miscellaneous charges.

Hospital Income Insurance:
A type of plan that provides the policy holder with a set payment while they are hospitalized. This benefit can be used at the discretion of the policy holder. This benefit is separate from other costs incurred as part of a hospital stay.

Hospital Indemnity:
A type of coverage that provides either weekly, monthly or daily payments, above and beyond actual expenses occurred with a hospital visit.

Hospital Insurance (HI):
This can be referred to as Part A of a Medicare plan. This type of insurance allows policy holders coverage for inpatient care, hospice or nursing home care and is subject to a specific deductible and copayments.

Hospitalization Expense Policy:
A type of policy that provides coverage for daily expenses incurred during a hospital visit, such as room and board, x-rays and other miscellaneous expenses. This can also cover charges for emergency room treatment and may include surgery payments as well.

Hospitalization Insurance:
A type of policy which provides the policy holder with reimbursement for hospital expenses resulting from illness or injury, within certain contractual limits.

House Confinement:
A stipulation in certain health insurance policies which requires that a policy holder be confined to their home for benefit eligibility. This type of coverage is usually coupled with a policy that provides a benefit for loss of income.

Hunter Disability Tables:
A type of table used by underwriters which reveals that probability of total and permanent disability.

Identification Card:
A card that is provided to policy holders which they can use to prove plan coverage.

Identification of Benefits:
A type of provision in certain health plans that will provide coverage for costs resulting from a disabled person either getting in touch with or receiving care from a relative. These funds are reimbursed and are normally subjective to a maximum amount.

In-Area Services:
A type of authorized services that are within an “authorized” service area.

Individual Contract:
A type of insurance contract that provides coverage for a single individual and may cover their dependents.

Individual Practice Association (IPA) Model HMO:
An individual practice that has contracted with an insurance plan to provide services for plan members. This practice than contracts with physicians either individually or as a group.

Inflation Factor:
A type of loading for a premium that allots for increases in medical costs or loss payments in the future that are the result of inflation.

In-Force Business:
A type of health or life insurance where premiums are currently being paid, or have been fully paid. This term may also be defined as the total face amount for a Life insurer’s business portfolio. For health insurance plans, it means that complete value of the premium for an insurer’s portfolio of business.

Initial Eligibility Period:
A period of time which allows prospective members of a health plan to apply for coverage without needing to supply evidence of insurability.

Inside Limits:
A limit which is place on expenses for hospital benefits and modifies the overall maximum limits for benefits in a policy. When this type of limit is applied to room and board, it not only limits the amount that will be covered, but the amount of days that will be covered.

Insurance in Force:
A type of annual premium for a current insurance contract.

Integrated LTC Rider:
A type of long term care rider which may be added to certain insurance policies, such as life insurance. This means that LTC benefits which are paid out lessen the benefits from a life insurance policy. This type of benefit is also subject to the amount of life insurance benefits that are available.

Intentional Injury:
A self inflicted injury, or injury that results upon a person with their intent. This type of injury is not covered in accident insurance benefits and is normally not covered by other types of insurance.

Intermediate Care:
A type of care that is commonly associated with nursing care provided at a skilled nursing facility. This care is received at the hands of a registered nurse under the supervision of a physician. This type of care is one step below skilled nursing care.

Intermediate Care Facility:
A state licensed facility that provides persons with nursing care who may not necessarily require a level of care from a hospital or facility.

Intermediate Report:
A continuing disability condition claim report.

International Association of Health Underwriters:
A Health Insurance association for agents and other insurance personnel.

Invalidity:
Illness.

Large Claim Pooling:
In order to restrain premium fluctuations for smaller groups, a system known as large claim pooling is employed. If a claim is over a stated amount, it is then charged to a “pool” which is made up of several small groups. If a group is small, the pool is smaller, and as such, larger groups have larger pools.

Leading Producers Round Table (LPRT) An agent organization for those who qualify for annual membership or lifetime membership. This is achieved by producing high levels of Health Insurance premium volume in a single year. The sponsor for the LPRT is the International Association of Health Underwriters.

Legend Drug:
A type of prescription drug which carries a label stating, “caution:
federal law prohibits dispensing without a prescription.”

Length of Stay (LOS):
The amount of days that a policy holder remains in a medical facility or hospital.

Line Slip:
A type of document which provides a statement of risk to a policy holder. This is normally used at Lloyd’s. Brokers circulate this document and it is subscribed to by underwriters who indicate how much risk they are willing to assume.

Living Benefits Rider:
A type of rider for benefits which is commonly used in Life Insurance to provide long term care for terminally ill policy holders. The benefits used for the LTC care are taken from the life insurance benefits that are available.

Living Need Benefits:
A benefit that is a combination of LTC and life insurance which permits the benefits from a life insurance policy to generate LTC benefits. A percentage of a death benefit (up to a certain amount) can be used for nursing care or medical expenses in advance, which reduces the life insurance policy’s face amount.

Long Term Care (LTC):
A type of care for patients suffering from chronic diseases or disabilities. This term is used to define a large range of health and/or social services which are administered or supervised by medical professionals.

Long Term Care Facility:
A facility which is licensed by the state to provide skilled nursing care, intermediate care or custodial care.

Long Term Disability Insurance:
A type of policy for a group or an individual which provides long term coverage, usually up to the age of 65 for illnesses or life-long coverage for accidents.

Loss-of-Income Benefits:
A type of benefit which provides payment to a policy holder if that are unable to work for financial gain due to a disability which results from an accident or sickness. This benefit may be figured on real or presumptive income.

Loss of Income Insurance:
A type of insurance which provides payments for loss of income.

Maintenance of Effort (MOE):
A Medicare requirement for a catastrophic coverage act. This affects employers who have plans that duplicate 50% or higher for new catastrophic benefits. MOE requires companies to “maintain their effort” to provide eligible employees, dependents or retirees with additional benefits. This may also include a refund equal to the duplicated benefit’s value.

Major Hospitalization Policy:
This is also referred to as Major Medical Insurance, but in this case it applies to expenses that are incurred only when a policy holder is hospitalized.

Major Medical Insurance:
This type of insurance usually has a high deductible, and a high limit for medical expenses. There may be limits on certain aspects of the plan, such as room and board, and there may be co-insurance stipulations. This type of insurance will normally pay expenses which are covered for inpatient or outpatient care.

Managed Care:
A type of health care system that strives to provide quality health care that is cost effective by monitoring services and recommending services or service costs.

Managed Health Care Plan:
A type of plan which involves managing, delivery and financing for health care services. This normally will involve a group of providers that share in risks for the plan, such as financial risks, but also have an incentive to deliver services cost effectively while maintaining quality.

Mandated Benefits:
Federal or state required benefits.

Mandated Providers:
Federal or state laws for medical care providers for services which must be included.

Manual Rates:
Rates that are averaged on the basis of date for claims for a large number of groups. After the rate is averaged, other factors for a group are figured in to find the specific cost. These factors include industry type and benefit standard changes.

Market Assistance Plan (MAP):
The Department of Insurance promulgates this type of plan to make it easier for buyers to get insurance plans when they are narrow in availability.

Maximum Allowable Costs (MAC) List:
A prescription list which calculates reimbursement on the costs of generic products.

Maximum Disability Policy:
A type of Disability Income Insurance that is noncancellable and limits liability for an insurer for any one claim, but not the cumulative amount of all claims. For example, limits are placed on a single claim, but not on the amount of separate claims.

Maximum Out-of-Pocket Costs:
The maximum amount for deductibles, co-payments or co-insurance that a policy holder is required to pay.

Medicaid:
A state administered and federally funded medical benefits program. This is also referred to as Title XIX Benefits and allows payment for certain medical services for those who qualify.

Medical Examination:
A medical examination for a potential policy holder that is requested by an insurance company. A physician must administer the exam and the physician acts in the capacity of the insured’s agent.

Medical Examiner:
A term that is used to describe a physician who provides medical examinations for current or prospective policy holders at the behest of an insurance company.

Medical Expense Insurance:
An insurance plan for benefits on medical, hospital and surgical expenses. Normally used to define coverage using the names Hospital-Surgical Expense Insurance and/or Medical Care Insurance.

Medical Information Bureau (MIB):
A data pool that stores health histories from persons who have applied for medical insurance or life insurance from companies that subscribe to the service. The vast majority of insurance companies subscribe to the MIB in order to have complete underwriting information.

Medical Loss Ratio:
The total premium divided by the total amount of health benefits.

Medical Supplies:
Essential items for a patient’s treatment either for illness or injury.

Medically Necessary:
Treatments or services which are deemed necessary during a patient’s treatment. This also includes treatments which, if omitted, would affect a patient’s condition adversely.

Medicare:
A Federal Government Plan from the United States which provides coverage for specific medical and hospital expenses for people that qualify for the plan. This normally means people over the age of 65. Plan A (compulsory social insurance) consists of Hospital Benefits and Plan B (voluntary, government subsidized and operated insurance) refers to medical expenses.

Medicare Beneficiary:
A person designated by the Social Security Administration as being eligible for Medicare benefits.

Medicare Supplement Insurance:
A type of insurance that is sold to Medicare patients which is intended to fill in gaps left in Medicare coverage. These benefits may not duplicate Medicare covered services, but may pay all or part of the deductibles and copayments for Medicare.

Member:
A member of a health plan, also known as an enrollee or dependent.

Member Certificate:
A certificate of coverage. Member Month:
The amount of member participants each month.

Members Per Year:
The number of member months divided by 12.

Mental Health Services and Supplies:
Services or items that are necessary for the treatment of mental illnesses, as well as substance abuse and/or alcoholism.

Minimum Premium:
A type of cost plus arrangement where an employer pays an insurance company a portion of a premium, which is used for administration costs. The rest of the amount is then put into a “bank account” which in turn is used to pay claims by the Insurer.

Miscellaneous Expenses:
A term which refers to x-rays, lab fees and/or drugs. Basic hospitalization plans normally place a limit on covered miscellaneous expenses.

Modified Arbitration Procedure:
An informal method for dispute solving that is used by Lloyd’s of London. This is used for disputes between members and agents and when the disputed sum is less than $10,000.

Modified Community Rating:
A way to figure out rates for specific medical services that uses data from a specific geographical area.

Modified Fee-for-Service:
When reimbursement is paid out based on actual fees that are subject to procedure minimums.

Morbidity:
A relative prevalence of disease.

Morbidity Rate:
A ratio of well persons to prevalence of sickness for a specific group of people over a specific period of time. It can also include new cases during the specific time or the complete amount of cases for a specific disease or disorder.

Morbidity Table:
A table that provides information on the prevalence of sickness for a specific age group. Very similar to a mortality table.

Multi-Disciplinary:
A type of treatment which requires care from a number of different specialists.

Multiple Employer Trust (MET):
A trust for several small employers that are involved in the same industry. This type of trust is used to purchase group health insurance, or self funded plans for a lesser amount than a singular business would have to pay. Multiple Employer Welfare Arrangements:
A type of fund or trust that provides benefits for health care to individuals.

Multiple Option Plan:
A type of insurance plan which allows employees to choose between PPO, HMO or major medical plans.

National Drug Code (NDC):
A system that is used to identify drugs.

National Fraternal Congress of America:
A fraternal benefit society federation.

National Health Insurance:
A type of socialized health insurance benefit which covers all or most citizens in a country, which is established by a federal law, supported by taxation of citizens and administered by the federal government.

Newspaper Policy:
Newspapers typically sell a type of policy for limited health insurance that helps them build or retain circulation. Noncancellable (Non-Can):
A contract between an insured person and a health insurance company that ensures that an individual may retain their policy as long as they pay their premiums. This contract prevents insurers from making changes to policies, provisions, or benefits. NAIC has recommended that this term not be used for forms that are not renewable to age 50 at least, or for at least 5 years if the insured person is over the age of 44. This is not the same as Guaranteed Renewable policies. Premiums for noncancellable policies must remain at the same rate as when the policy was issued.

Non-Disabling Injury:
An injury to a policy holder which does not allow them to qualify for partial or total disability benefits. However, some policies may include smaller benefits which will pay anywhere from 25 to 50% of a disability payment for one month.

Nonduplication of Benefits:
Can also be known as COB (coordination of benefits) when used in reference to group policies. For individual policies, this term means that benefits will not be paid on amounts that are reimbursed by other policies.

Non-Occupational Policy:
A type of policy or a provision that does not include accidents that occur while the insured is on the job and covered by workers compensation.

Nonparticipating Provider:
(1) A medical care provider who has not contracted with a health plan. (2) A non Medicare certified health care provider.

Nonparticipating Provider Indemnity Benefits:
A type of coverage which provides reimbursement for services that are provided by a nonparticipating provider.

Nonprofit Insurers:
A type of insurer which is organized under state law that exempts them from some of the taxes that are normally imposed on regular insurance companies. An example of this type of insurer would be “Blue Cross” or “Blue Shield” plans that are found in many states. These companies agree to provide Medical Expense Reimbursement insurance on a service basis.

Nurse Fees:
A provision normally found in a medical expense reimbursement policy which covers expenses for nurse fees for nurses not employed by a hospital.

Nursing Home:
A facility that is licensed to provide nursing care to chronically ill patients, or patients who are not able to perform daily living tasks. This is also known as a long term care facility.

Occupational Disease:
A disease which results from long term or continued exposure to certain conditions that are inherent to a particular occupation or nature of employment.

Office Visit:
Services that are provided in the office of a physician.

Open Access:
May also be referred to as an Open Panel. This allows members to visit other providers that are participating in a network without necessitating a referral.

Open Debit:
A territory for life or health insurance which does not have an agent.

Open Enrollment Period:
A period for persons who wish to sign up for an alternate plan. Usually does not require proof of insurability.

Optionally Renewable:
A stipulation which allows insurers to have the unrestricted right to cancel a policy on an anniversary date, or on a premium due date. However, they are not allowed to do this in between these dates.

Outcomes Measurement:
A way to monitor the treatment that a patient is receiving and how they respond to such treatment.

Out-of-Area (OOA):
Treatment that is provided to a policy holder which is not inside the normal area.

Out-of-Pocket Costs:
The amount that a policy holder can expect to pay out of their own pocket. For example, deductibles, coinsurance or co-payments.

Out-of-Pocket Limit:
The absolute most that a policy holder must pay before 100% coverage from the insurance company takes affect up to a policy’s limit.

Outpatient:
A non-bed patient, or a patient that receives treatment at a hospital without being admitted.

Overage Insurance:
A type of health insurance issued to people over the age of 65.

Overhead Expense Insurance:
An insurance policy for coverage for rent, employee salaries or utilities for business owners that may become disabled. Normally, this amount covers actual expenses and is not a fixed amount.

Over-the-Counter Drugs (OTC):
A non-prescription medication that can be purchased “over the counter.”

Qualified Medicare Beneficiary (QMB):
A person whose income falls below federal poverty guidelines. If this is the case, the state must provide Medicare Part B premiums as well as deductibles and/or co-payments.

Qualifying Event:
An event such as termination of employment, death or divorce, which trigger’s protection for the insured under COBRA, and requires continuation for benefits under a group insurance plan for former employees or their dependents if they would otherwise be without health coverage.

Quality Assurance:
A review that ascertains quality of services and may recommend corrective actions if deficiencies are discovered.

Quarantine Benefit:
If health authorities order the quarantine of an insured person, a benefit is paid for loss of time resulting from this quarantine.

RHU:
Registered Health Underwriter.

Railroad Retirement:
Railroad workers are eligible for a system that provides benefits, such as Medicare eligibility, or retirement.

Railroad Travel Policy:
A type of insurance policy that is sold in vending machines or by ticket agents at railway stations.

Rating Process:
A process used to figure out rates for group premiums that uses group risk as a factor. Ratings include age, type of industry, sex and administrative costs.

Reasonable and Customary Charges:
A Medicare Carrier approved charge for medical services. These charges are usually defines as charges that are most commonly made by providers for services in specific areas.

Recidivism:
A term which is defined by the amount of times for the same reason that a policy holder reverts to inpatient status as a hospital.

Recipient:
A person designated by Medicare as being eligible to receive benefits.

Recurring Clause:
A provision found in health insurance policies which states how many times a policy holder can have a recurrence of a condition during a specific amount of time. This is used to determine whether the condition is a continuation of a previous period of confinement or disability.

Referral:
A referral takes place when a physician or provider gets permission to consult with another hospital, provider or physician.

Referral Provider:
A person or provider that has received an authorized referral from another provider or physician.

Registered Nurse (RN):
A professional nurse who has completed a four year degree in nursing. An RN can provide all levels of nursing care, even administration of medicine.

Rehabilitation Clause:
Normally found in disability income policies, this clause is used to assist a disabled person in obtaining rehabilitation.

Relative Value Schedule:
A schedule used to compare the values of one surgical procedure with another surgical procedure to determine the surgical fee which needs to be paid.

Residual Disability:
A type of disability that is normally defined as a partial disability. This occurs when a policy holder returns to work following a period of total disability.

Residual Income:
A type of clause for a policy holder to receive benefits when a disability affects some but not all of their abilities and/or normal duties. To illustrate this point, when someone becomes disabled and can only earn 2/3 of their normal income, a residual income clause would provide the missing 1/3.

Resource Based Relative Value Scale (RBRVS):
A type of system for classification that discerns how physicians will be repaid for providing Medicare benefit services.

Respite Care:
A respite or break that is given to family members of a patient. This is normally used in conjunction with Hospice care. In this case, a patient would be confined to a nursing home facility for a brief period of time, allowing relatives a short break.

Restoration of Benefits:
A type of provision which allows the restoration of lifetime maximum benefit amounts after a claim is paid. This is usually done in small increments and does not normally exceed $1,000 to $3,000 per year.

Retention:
A segment of premiums which are used by insurance companies to cover administrative costs.

Retrospective Rate Derivation (RETRO):
A rating system used to determine when an employer gains responsibility for a specific portion of a group’s health care costs. However, if these costs are less than estimated, the insurance company must refund the overpayment to the employer.

Return of Premium:
A type of rider or provision that allows a benefit equal to the sum of all premiums that have been paid, minus claims, if these claims do not go over a certain percentage of the premium paid over a specified period.

Revenue:
See premium.

Risk Analysis:
An analysis that provides an insurance company with an estimate for the kinds of benefits they can offer and how much they should charge a group for these benefits.

SNF:
Skilled Nursing Facility:


Schedule (Surgical):
A method used to contain costs that allows patients and insurance companies to discern if a procedure is medically necessary, and to find out if there is a less costly alternative. Some insurance companies require a second surgical opinion before allowing coverage for these procedures and will select the second option.

Secondary Care:
This normally refers to specialists who do not have “first contact” with a patient.

Secondary Coverage:
This is also referred to as coordination of benefits. Secondary coverage pays for services and charges that the primary policy does not cover.

Section 125 Plan:
A flexible benefit plan. The IRS allows employee contributions with pre-tax dollars.

Self-Funded Plan:
A self-funded plan is a plan where claims are paid directly by the employer, as opposed to the insurance company paying for claims. Please see also Administrative Services Only.

Self-Inflicted Injury:
A injury which occurs as the result of a person inflicting it upon themselves.

Service Area:
An area where a health plan is allowed by state agencies or a certification of authority to provide health care services.

Service Benefits:
A plan for medical expenses which is expressed in days rather than monetary values.

Service Plans:
A type of insurance plan that uses benefits as actual services rendered instead of monetary benefits. See also Blue Cross and Blue Shield.

Short-Term Disability Income Policy:
This type of policy pays over the short-term, which is usually defined as less than 2 years, unlike a long-term disability income policy.

Short-Term Disability Insurance:
A policy for groups or individuals which will provide disability coverage for a period of 13 or 26 weeks, or up to 2 years.

Sickness:
An illness, disease or pregnancy. However, this definition does not include mental illness.

Sickness Insurance:
A health insurance policy that provides coverage for diseases or illnesses, but not accidental injury.

Single Carrier Replacement:
If a single carrier provides replacement for several other carriers, it is referred to as single carrier replacement.

Skilled Nursing Care:
This type of care is provided by or under supervision of a skilled medical professional and may include minor surgery, medication administration and/or medical diagnosis.

Skilled Nursing Facility (SNF):
A type of facility that is used to treat Medicare eligible patients. This treatment may include physical, occupational or speech therapies and/or round the clock nursing care.

Small Group Pooling:
A method to determine accurate group rates by combining several small group businesses into one pool.

Social Health Maintenance Organization (SHMO):
A Health and Human Services Department project to provide acute and long term care with transportation and/or adult day care services.

Social Security Tax:
An earnings tax for workers and employers which supports benefits provided by the Social Security System.

Specified Disease Policy:
See Dread Disease Policy.

Split Dollar Coverage:
A Disability Income Insurance arrangement where both the employee and the employer provide a payment for a portion of a premium. In this type of insurance, the employer provides sick pay and/or disability leave as a benefit and the employee pays for coverage above and beyond what the employer offers.

Staff Model HMO:
An arrangement with an HMO and physicians where the physicians are hired by the HMO, all premiums paid go to the HMO and the physicians are paid a salary for their services.

Standard Class Rate (SCR):
A rate calculated by taking the base rate per participant and multiplying it by a factor for group demographic information.

Stop-Loss Insurance:
A reinsurance plan that can be taken out by a self-funded employer plan or a health plan to cover losses that come over a specific amount. This type of plan can include specific or individual basis or a total basis over the course of a specific amount of time.

Subscriber:
(1) A person or employer that pays insurance premiums. (2) A person who is eligible for a health plan membership by virtue of their employment.

Subscriber Contract:
A contract that delineates specific benefits covered by an insurance plan.

Summary Plan Description:
A summarization of plan benefits commonly used for self-funded plan employees.

Superbill:
A form which provides a list of the complete amount of services that were performed by a physician for a patient. However, a superbill is not to be used as a replacement for an AMA form.

Supplemental Medical Insurance (SMI):
This can be referred to as Medicare Part B, which is a voluntary program providing coverage for physicians’ services and/or outpatient services. If a person elects for Part B coverage, they must pay a premium.

Supplement Services:
Service coverage that can be purchased above and beyond a health plan’s basic coverage.

Surgical Insurance Benefits:
A type of insurance plans which covers loss resulting from surgical expenses.

Surgical Schedule:
See Schedule.

Surgi-Center:
An outpatient surgical facility that is separate from a hospital.

Swap Maternity:
A “swap” is defined as coverage that begins immediately at the beginning of the policy but does not continue after the end of the policy. Swap Maternity means that maternity coverage begins immediately, but will not continue for pregnancies that are in process if the coverage is terminated.

Switch Maternity:
A Group Health Maternity provision for female employee if their husbands are listed as dependents.

Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA):
A act that defined primary and secondary coverage for Medicare responsibilities as well as provisions for health plans that have contracted with the HCFA (Heath Care Financing Administration.)

Temporary Disability Benefits (TDB):
A law which provides benefits for employees that have suffered non-occupational disabilities in certain states. See also Disability Benefits Law.

Temporary Partial Disability:
A disability or impairment which allows an employee (who is expected to recover) to continue working in a reduced capacity.

Temporary Total Disability:
A disability or impairment which does not allow an employee (who is expected to recover) to continue working, even in a reduced capacity.

Ten Day Free Look:
A no-obligation period in which a new policy holder is allowed to survey their health plan and services. If they are not happy with the plan, they have ten days to return the policy.

Tertiary Care:
This type of care is provided by neurosurgeons, intensive care units or thoracic surgeons.

Terminally Ill:
Terminally ill refers to a patient that is expected to die within six months as the result of a sickness or illness. This is often used for hospice care requirements.

Therapeutic Alternatives:
Drugs which can provide the same effect to a patient, but have a different chemical make-up from other drugs.

Third Party Administrator (TPA):
An administrative service provider organization for employers or associations that have group insurance policies. The TPA acts as a liason for employer with an insurer and may also be responsible for certifying eligibility, processing claims and/or supplying state required reports. Self-funded plans are currently utilizing TPA’s in greater numbers.

Third Party Payor:
An organization like Medicare, Blue Cross or Blue Shield, Medicaid or a commercial insurance company that provides payment for coverage in a health plan.

Ticket Policy:
See Transportation Ticket Policy:


Time Limit on Certain Defenses:
A state law required provision for individual accident and sickness health plans that must be included in an Individual Health Policy. This provision sets a limit for the amount of years of coverage that a defense against a claim can be used by an insurance company to state that the insured had the physical condition before the coverage was issued and did not declare it at that time.

Title XIX Benefits:
See Medicaid.

Total Disability:
A disability that results either from injury or sickness which prevents a policy holder for working for remuneration or profit. The wording of specific policies will define this term.

Transportation Ticket Policy:
This term takes its name from its origin as being issued on an extra stub for a travel ticket. This policy is an accident death and dismemberment policy that is provided by a common carrier ticket and may be limited to certain risks of the trip as well as the duration of the trip.

Travel Accident Insurance:
A coverage plan that provides benefits for accidents that occur only when a policy holder is traveling.

Treatment Facility:
A residential or non-residential facility that has received authorization to treat substance abuse or mental illness.

Trend Factor:
A factor used for rate increases due to increase cost for new medical technology or a cost increase from medical providers.

Triage:
A system to rank sick or injured people by the severity of their condition. This allows medical and nursing staff to work more efficiently for their patients. For example, if one patient is bleeding to death and another patient has a cold, the patient who is bleeding to death would be treated first.

Triple Option:
A plan that allows employees to select an HMO, PPO or indemnity plan, based on their own choice. This choice is usually tempered by how much they are willing to pay for their coverage.

Unallocated Benefit:
A type of benefit that provides a reimbursement for expenses, up to a maximum amount, but does not have a schedule of benefits.

Unemployment Compensation Disability Insurance (UCD):
Coverage for accidents and/or sickness that occur off-the-job. However, this does not cover Workers Compensation Insurance eligible disabilities. See also Disability Benefits Law.

Uniform Billing Code of 1992 (UB-92):
This code came into effect on October 1, 1993. This federal directive states the manner in which a hospital has to provide their patients with itemized bills for services provided.

Uniform Premium:
A method of calculating rates that does not take into account age, sex or occupation.

Urgi-Center:
A facility that provides emergency medical care but is not located in a hospital.

Usual, Customary and Reasonable (UCR):
See Reasonable and Customary.

Utilization:
The term is used to define how often a group uses their health plan.

Utilization and Review Committee:
A committee staffed by medical personnel that monitor services and supplies that are provided to Medicare patients.

Utilization Management:
A process which uses a review coordinator to determine if certain health care services are useful and/or necessary.

Utilization Review:
A mechanism that is used to control costs by determining if health care is appropriate, necessary and of quality. This is monitored by employers and insurers.

VEBA:
Voluntary Employee Beneficiary Association.

Vision Care Coverage:
A plan normally offered for a group basis only that provides coverage for eye examinations, and may cover all or most expenses for eyeglasses or contacts.

Voluntary Employee Beneficiary Association (VEBA):
A trust that was established by IRS Code 501 ( c) (9) that allows prefunding for health care.

Waiting Period:
A period of time that falls in-between the start of a disability and the implementation of disability insurance benefits. This is also known as an elimination period.