Health care is complicated – and it seems like it’s becoming more complicated every day. As you consider health insurance coverage options for your business (and yourself), it might be useful to have a glossary of frequently used insurance- and medical-related terms.
What follows is not a full list of the terms you and your employees might encounter; rather, it’s a list of frequently used words and phrases you may encounter in your health plan literature or your health insurance policy. Keep in mind, these are general definitions; your health plan or insurer may define something in a slightly different way. When in doubt, always check your policy or ask your health plan for information.
Affordable Care Act; also referred to as the Patient Protection and Affordable Care Act (PPACA); the federal health care reform law enacted by Congress in 2010 to establish creation of an American Health Benefits Exchange (AHBE) and Small Business Health Options Program (SHOP) Exchange. See related entries below.
Annual Enrollment Period; that time of the year when an annual enrollment takes place – for example, for 2017, the AEP for the ACA was November 1, 2016, through January 31, 2017. The expected open enrollment period for the ACA for 2018 is November 1, 2017, through December 15, 2017, based on an announcement from the Centers for Medicare & Medicaid Services in May 2017.
American Health Benefits Exchange; refers to the health care exchange established under the Affordable Care Act (ACA) enacted by Congress in 2010 (see related entry above), under which lower-income individuals earning between 133% and 400% of the Federal Poverty Level can access sliding-scale tax credits and cost-sharing subsidies toward the purchase of health insurance coverage.
Administrative services only. A relationship between an insurance company or other management entity and a self-funded insurance plan or group of providers in which the insurance company or management entity performs administrative services, such as billing, premium collection and submission, etc., and does not assume any of the risk with the insurance operation (the plan bears the financial risk for all claims).
This refers to the practice when a health care provider (like a doctor, hospital, or outpatient facility) bills a health plan member for the balance of the amount due on services provided. This amount is the difference between the actual amount billed and the amount allowed by the health plan. For example, if the provider charge is $200 and the amount allowed by the member’s health plan is $120, the provider may “balance bill” for the remaining $80. This often happens when a member visits an out-of-network (or non-preferred) provider.
This is a request for payment made in connection with a health care expense reimbursement. It can be made to the health plan/health insurer by a health plan member or a health care provider for services or items that are (or are expected to be) covered under the plan.
Refers to the Centers for Medicare & Medicaid Services, a federal agency responsible for Medicare, Medicaid, and children’s health, survey, certification, and quality improvement as well as implementation of the ACA; CMS is an agency within the U.S. Department of Health & Human Services (HHS), under the leadership of the Secretary of HHS, who serves as one of 15 members of the President’s Cabinet.
Consolidated Omnibus Budget Reconciliation Act; refers to the federal act that established a continuation of coverage option for employees (and their dependents) when group health insurance plan coverage ends (due to voluntary or involuntary termination); applies to employers with 20 or more employees; coverage for employees can be extended for up to 18 months, while coverage for dependents can be extended for up to 36 months; COBRA premiums are the sole responsibility of the insured person(s).
A Consumer Operated and Oriented Plan; a new type of private, nonprofit, consumer-governed health insurer offering access to qualified health plans through health insurance exchanges; established under the guidelines of ACA; CO-OP profits must be used to lower premiums, while improving health outcomes through quality of care and expanded coverage for members.
This refers to an insured member’s percentage share of the costs of health care services (ranging from 10% to 40%, depending on the metal tier of plan you select). Under the ACA, there are four tiers of coverage – Platinum, which pays 90% of the costs of covered health care services, while the member pays 10%; Gold, which pays 80% of the costs of covered services, while the member pays 20%; Silver, which pays 70% of covered services, while the member pays 30%; and Bronze, which pays 60% of covered services, while the member pays 40%.) You generally pay your coinsurance percentage plus any deductible. After your deductible is satisfied annually, you continue to pay your coinsurance amount for covered services throughout the plan year, up to your total out-of-pocket maximum.
A fixed amount (for example, $25) that you must pay when receiving covered health services. The amount can vary based on the type of covered services provided.
Your share of the costs for health care services; also referred to as your out-of-pocket costs, which includes your coinsurance amounts, annual deductible, and copayments.
This is the amount you must pay before your health plan begins to pay. An overall deductible applies to all – or almost all – covered services and items. Separate deductibles may also apply to some services. (As an example, if you have a $500 deductible, your health plan will not pay for any covered services until you have first paid your deductible.)
To learn more about the ABCs of health insurance, and what you need to know when considering health insurance for your business and employees, talk with your employee benefits broker. If you don’t already have a broker, we can help you find a CaliforniaChoice broker to speak with about the plans and choices available in your area.