Glossary of Health Insurance Terms

Broker
A licensed professional who helps businesses and individuals obtain a health plan.

Carrier
Another term for an insurer or insurance company.

Claim
A statement that includes the health care services you have received and what the services cost. A claim is provided by a doctor, hospital or other health care facility and is then sent to carrier for payment.

COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985)
Allows some workers to continue coverage from a former employer’s health insurance plan for a limited time.

Co-insurance
The percentage you need to pay on all remaining eligible medical expenses after the deductible amount has been paid. For example, if your plan has an 80%/20% coinsurance rate, the carrier will pay 80% of eligible medical expenses while you will pay the remaining 20%.

Co-payment
The specified dollar amount you’re responsible to pay at the time you receive a covered service. For example, if your plan has a $20 copayment for doctor's office visits, you'll pay $20 when you visit the doctor.

Cost-Sharing
The share of costs covered by your insurance that you pay out of your own pocket. This term generally includes deductibles, coinsurance, and co-payments, or similar charges, but it doesn’t include premiums, balance billing amounts for non-network providers, or the cost of non-covered services. Cost-sharing in Medicaid and CHIP also includes premiums.

Covered services
Health care services or supplies that are covered by the plan.

Deductible
A deductible is a dollar amount that must be paid before the carrier starts to pay for certain covered services. For example, if your plan has a $1,000 deductible, you'll pay the first $1,000 for certain services, and then the carrier will begin to pay for those services. Each carrier has specific rules around which services track to a deductible. Please consult the detailed benefit summary for clarification.

Dependent
Legal spouse or children by birth, adoption, or legal guardianship who are eligible for benefits under your insurance policy.

Diagnostic service
A service that is intended to diagnose, check the status of, or treat a disease or condition.

ER Copay
A flat amount that you must pay for a covered Emergency Room visit – usually at the time the service is delivered.

Effective Date
The date on which insurance benefits begin.

HIPAA
Health Insurance Portability and Accountability Act. This is a federal law that outlines the requirements which must be fulfilled in order to provide you with health insurance coverage. HIPAA also outlines strict guidelines to ensure the privacy and confidentiality of your personal health information, requiring that your personal health information be used for purposes of treatment, payment and health plan operations—and not for purposes unrelated to health care.

Medicare
A federal program of health care coverage for the elderly, disabled and persons with end-stage renal disease.
Medicare Part A: Compulsory insurance that provides specified in-hospital and related benefits.
Medicare Part B: Voluntary program to provide additional insurance to cover certain medical services and supplies not covered under Medicare Part A.
Medicare Supplement Policy: Provides coverage to fill in the gaps in Medicare coverage.
Medicare Part D: Voluntary program that provides prescription drug benefits.

Network
A group of health care providers like doctors, hospitals and other health care facilities that are contracted with a carrier to provide covered services to you.

Open Enrollment Period
The time when subscribers can select a new health plan from the options offered by the group (employer).
A designated period of time each year—usually a few months—during which insured individuals or employees can make changes in health insurance coverage.

Out-of-pocket maximum
A dollar amount determined by the carrier that places a limit on the amount of expenses you pay for specific services during a particular time period, typically a year. May only apply to certain services.

Preauthorization
A guarantee from the carrier that the services you need are medically necessary and approved for coverage.

Premium
The price of health plan membership.  The amount you pay to an insurer to receive insurance coverage under a contract. 

Preventive service
Any test, immunization or service geared to help screen for diseases and improve early detection when symptoms or diagnosis are not present.

Primary care provider (PCP)
A network provider who specializes in internal medicine, family practice or pediatrics, with whom you choose to work to manage your medical care.

Provider
A doctor or other medical professional, hospital, or another facility, that provides health care services to you.

Provider Network
A group of medical providers who have agreed to serve a health plan or a medical facility’s members or patients.

In-Network:  You are in-network when you select a provider that has contracted with your health plan.
Out-of-Network:  You are out-of-network when you choose a provider that is not contracted with your health plan.

Referral
When a medical provider recommends another provider to a patient.  The most common type of referral is from a primary care physician to a specialist.

Service Area
The geographic zone where a health plan offers benefits.  A health plan may have multiple service areas and may offer different health plan products in each service area.

Sole Proprietorship
A business where one individual owns and controls the entire company.

Subscriber
The person whose name the health insurance policy is in.

Tiers
Many carriers allow you to choose a tier structure. Your options may include:

• 2 tier (families and individuals)
• 3 tier (families, individuals, and 2-person)
• 4 tier (families, individuals, 2-person, parent plus child(ren))

Underwriting
The process by which an insurance company decides whether, and on what basis, to accept an application for insurance.