Glossary of Health Insurance Terms

Short for Consolidated Omnibus Budget Reconciliation Act. COBRA health-insurance laws are designed to protect employees and their dependents by allowing them to continue their group health-insurance plan even after the employee leaves his employer or ceases to work full-time. COBRA requires that companies with 20 or more full-time employees offer this COBRA continuation coverage at no more than 102% of the regular total group rate to employees for up to 36 months following a “qualifying event” for a “qualified beneficiary.

 

Coinsurance

Refers to the portion of covered charges that are the responsibility of the member. You are responsible for paying your coinsurance in addition to any applicable deductible and copay amounts.

Fees payable by members in the health plan, for certain covered services such as office visits, emergency room visits, and prescription drugs. Copays are payable at the time you receive the services, or (in the case of the emergency room copay) when billed by the provider.

A specific dollar amount that is payable by a member for covered benefits each calendar year, before benefits that are subject to the deductible are available under the Plan.

A fund into which employees contribute untaxed earnings to pay for uninsured medical costs. When the employee submits evidence of unreimbursed medical expenses, the employee is then reimbursed. Examples would include elective surgery, eyeglasses, orthodontia, and the deductibles and coinsurance requirements that are part of the insured medical claims. The amount that the employee contributes to this account must be spent in total during that year. If this amount or any part thereof is not spent during that year, it is forfeited in total to the employer.

These plans are part of a trend toward "consumer-driven health care," which emphasizes more custom-built policies and flexibility in health care financing. A high-deductible health insurance policy is one in which the individual or family deductible (depending upon the nature of the policy) is, generically, substantially higher than in the typical health-insurance policy. The "deductible" is the amount of money that the insured has to pay from his/her own funds before the insurer's obligation to pay is triggered. In such a policy, it is not unusual to see a deductible of several thousand dollars. This sort of policy is often paired with a health savings account (HSA).

Permits the participant to set aside a stated amount of money per year, up to a statutory maximum, to be used toward health-care expenses (such as meeting the deductible and co-payments of the insurance policy). The funds that are set aside get tax-advantaged treatment, but if all are not used for approved medical purposes (which can often include over-the-counter drugs), there is a forfeiture of the unused portion. Therefore, it is important to have a fairly accurate idea of what individual/family health-care expenses will be so that a proper amount can be designated for the HSA.

HRA plans are employer-funded medical-reimbursement plans. The employer sets aside a specific amount of pre-tax dollars for employees to pay for health-care expenses on an annual basis. Based on the plan design, HRAs can generate significant savings in overall health benefits.

A form of insurance purchased by self-insured employers that limits the amount the employers will have to pay for each member’s health care services (individual limit) and/or for the total health care expense liability incurred by the employer (group limit).  Reinsurance/Stop Loss coverage helps employers better predict their overall health care expenses for any given year.  Click here to see a list of reinsurance carriers with whom we are licensed.          

Contain the same active ingredients as their brand-name counterparts. They are generally less expensive than brand-name medications.

These have been selected by the plan based on review of the relative safety, effectiveness and cost of the many brand-name drugs on the market. Preferred brand-name drugs may also be referred to as “formulary” drugs.

Those drugs not included in the “preferred” formulary list compiled by your health-insurance plan. They generally include the highest-cost drugs.