COBRA

The Consolidated Omnibus Budget Reconciliation Act of 1985, commonly known as COBRA, requires group health plans with 20 or more employees to offer continued health coverage for you and your dependents for 18 months after you leave your job. Longer du rations of continuance are available under certain circumstances. If you opt to continue coverage, you must pay the entire premium, plus a two percent administration charge.

Coinsurance

The amount you are required to pay for medical care in a fee-for-service plan or preferred provider organization (PPO) after you have met your deductible. The coinsurance rate is usually expressed as a percentage of billed charges. For example, if the insurance company pays 80 percent of the claim, you pay 20 percent.

Copayment

A cost sharing arrangement in which a person pays a specific charge for a specific medical service -- say $10 for an office visit or $5 for a prescription. Generally these benefits are your responsibility for the service.  A calendar year deductible generally would not apply with Copayments.

Deductible

The amount of money you must pay upfront each year to cover your medical care expenses before your insurance policy starts paying.

Exclusions

Specific conditions or circumstances for which the policy will not provide benefits. Specific conditions or circumstances for which the policy will not provide benefits.

Fee-for-Service

A payment system for health care where the provider is paid for each service rendered.

First Dollar Coverage’s

Refers to not having to meet a calendar year deductible prior to receive reimbursement or payment for a medical service.  Example of this would be an Office visit Copayment, or a prescription card with a fixed copayment.    Being “covered” and being “paid for” are different terms.

Health Maintenance Organization (HMO)

Prepaid health plans in which you pay a monthly premium and the HMO covers your doctors' visits, hospital stays, emergency care, surgery, preventive care, checkups, lab tests, X-rays, and therapy. You must choose a primary care physician who coordinates all of your care and makes referrals to any specialists you might need. In an HMO, you must use the doctors, hospitals and clinics that participate in your plan’ s network.

Lifetime Limit

A cap on the benefits paid under a policy. Many policies have a lifetime limit of $1 million, which means that the insurer agrees to cover up to $1 million in covered services over the life of the policy.

Managed Care

An organized way to manage costs, use, and quality of the health care system. The major types of managed care plans are health maintenance organizations (HMOs), point-of-service (POS) plans and preferred provider organizations (PPOs).

Medicaid

A joint federal-state health insurance program that is run by the states and covers certain low-income people (especially children and pregnant women), and disabled people.

Medicare

The federally sponsored health insurance program of hospital and medical insurance primarily for people age 65 and over.

Medical Savings Accounts (MSAs)

These health insurance plans provide incentives for individuals to replace high premium, low-deductible policies with affordable, high deductible catastrophic coverage. Premiums for this coverage are lower and the savings may be used to fund a tax-preferred medical savings account from which you can pay on a pre-tax basis for qualified medical care and expenses, including annual deductibles and copayments.

Out of-Pocket Maximum

The most money you will be required to pay in a year for deductibles and coinsurance. It is a stated dollar amount set by the insurance company, in addition to regular premiums.

Point-of-Service (POS) Plan

A type of managed care plan combining features of health maintenance organizations (HMOs) and preferred provider organizations (PPOs), in which individuals decide whether to go to a network provider and pay a flat dollar copayment (say $10 for a doctor’s visit), or to an out-of-network provider and pay a deductible and/or a coinsurance charge.

Portability

The ability for an individual to transfer from one health insurer to another health insurer with regard to pre-existing conditions or other risk factors.

Pre-authorization

A cost containment feature of many group medical policies whereby the insured must contact the insurer prior to a hospitalization or surgery and receive authorization for the service.

Pre-existing Condition

A health problem that existed before the date your insurance became effective. Many insurance plans will not cover preexisting conditions. Some will cover them only after a waiting period.

Preferred Provider Organization (PPO)

A network of health care providers with which a health insurer has negotiated contracts for its insured population to receive health services at discounted costs. Health care decisions generally remain with the patient as he or she selects providers and determines his or her own need for services. Patients have financial incentives to select providers within the PPO network.

Premium

The amount you or your employer pays in exchange for insurance coverage.

Primary Care Physician

Under a health maintenance organization (HMO) or point-of-service (POS) plan, usually your first contact for health care. This is often a family physician, internist, or pediatrician. A primary care physician monitors your health, treats most health problems, and refers you to specialists if necessary.

Provider

Any person (doctor or nurse) or institution (hospital, clinic, or laboratory) that provides medical care.

Third-Party Payer

Any payer of health care services other than you. This can be an insurance company, an HMO, a PPO, or the federal government.

Usual and Customary Charge

The amount a health plan will recognize for payment for a particular medical procedure. It is typically based on what is considered “reasonable” for that procedure in your service area.

Utilization Review