Site Map

A–D       E–O      P–Z

Attending Physician Statement (APS)
The form a physician submits at claim time to describe the diagnosis and identify the services that have been provided to a particular insured patient.

Benefits
The payments received from an insurance company for medical services covered by a plan. The payments may be made to reimburse an insured individual for paying a bill, or, if assigned by the insured, they can be made directly to the doctor or hospital.

Carrier
Another term used to describe an insurance company that financially backs a plan and carries the financial risk associated with a plan.

Certificate of Insurance
A document issued to a member of a group insurance plan showing participation in insurance coverage.  The Certificate of Insurance includes coverage amounts, carriers and effective dates.

Claim
An official notification to an insurer that an individual who is covered by a plan has received care. The claim is also a request for benefit payment. Providers usually submit an Attending Physician’s Statement (APS) on behalf of their patients.

COBRA
The Consolidated Omnibus Budget Reconciliation Act of 1986 is a federal law mandating continuation of employer-sponsored insurance benefits after employment ends under certain conditions.

Coinsurance
The method of shared payment in which an insured individual is responsible for a certain portion of covered health care charges, and the insurance company is responsible for the remaining portion of the charges. Coinsurance is characteristic of indemnity type plans (PPO, POS and EPO plans) and is generally expressed by a percentage. For instance, the employee may be responsible for paying 10 percent, 20 percent or more for services covered under the plan, and the insurance company might pay 90 percent, 80 percent or less.

Copayment
A term that’s often shortened to copay. A copay is a fee charged to an insured for each office visit, emergency room visit, or pharmacy prescription filled. The plan then covers a percentage of the remaining cost of the office visit or prescription.

Covered Expenses
The charges that the insurance company will consider for payment as defined in a contract or certificate of insurance. For example, you may find that a stay in a semi-private hospital room is covered under your insurance plan, but the extra charges associated with a private hospital room are not covered expenses. Therefore, if an insured employee chooses to stay in a private room, he or she is responsible for paying the difference in costs. The money an insured employee pays for non-covered expenses usually cannot be used to satisfy a deductible, coinsurance or out-of-pocket requirements.

Deductible
The portion of covered charges that an insured must pay before the insurance company will consider payment and before coinsurance goes into effect. Usually, the deductible amount ($100, $250 or more) is based on a calendar year; yet, it can also be a per-occurrence or per-admission charge.

back to top

Exclusive Provider Organization (EPO)
A modified version of a PPO plan. While EPOs and all types of PPO plans vary depending on the plan’s carrier and region of the country, typically what distinguishes an EPO from other plans is that its beneficiaries must designate a primary care physician (PCP). In an EPO, patients must seek initial or primary care from their PCP and must always see their PCP first for referrals when they need additional or specialty care. If a member of an EPO sees a specialty care physician without seeking a PCP referral first, the visit might not be a covered benefit - even if the specialty physician is an in-network provider.

Health Insurance Portability and Accountability Act of 1996 (HIPAA)
A federal mandate passed by Congress in 1996 in attempt to protect insureds, improve portability and continuity of health insurance coverage, combat waste and fraud on the part of both insurers and providers, promote the use of medical savings accounts, and to improve access to coverage for even those who have serious health conditions. It requires health insurance companies to guarantee issue of coverage to groups of 2–50, and it standardized the way insurance companies deal with waiting periods and preexisting conditions. As is true with all well-intended federal mandates, HIPAA paperwork costs insurance companies millions of dollars each year and inevitably drives the cost of insurance upward.

Health Maintenance Organization (HMO)
"Pre-paid" or "capitated" insurance plans in which individuals or their employers pay a fixed monthly fee for the delivery of health care services, instead of paying for each visit or service individually. Monthly fees remain the same, regardless of the types or levels of care received, and care is provided by physicians who are employed by or under contract with the HMO network. HMOs are beneficial to patients because they reduce out-of-pocket costs and paperwork. Patients are required to pay only a minimal copayment for each office visit to cover the paperwork handled by the HMO. There are several different forms of HMOs. For example, an HMO network might consist of several doctors working at the same location at a clinic or hospital or could be made up of several independent providers with private practices who are under contract with the HMO.

Managed Care
A catch-all phrase that usually refers to organizations such as HMOs (Health Maintenance Organizations) and PPOs (Preferred Provider Organizations) that manage the allocation of health care benefits. This blanket term can also refer to any health insurance plan or organized health care delivery system with specific requirements such as precertification or second surgical opinions. While traditional insurance plans simply pay for their insureds’ health care services, managed care organizations go much further. They play a significant role in how services are administered to help control health care costs.

Out-of-pocket
Refers to the maximum amount of money an employee can expect to pay for covered expenses. In calculating maximum limits for out-of-pocket, some insurance companies include both deductible and coinsurance payments by the employee, and some insurance companies don’t. Out-of-pocket doesn’t include the money beneficiaries pay for uncovered expenses, and it doesn’t include penalties beneficiaries pay due to failure to precertify care. In addition, copayments for office visits and prescription drugs do not typically accrue to the out-of-pocket maximums.

back to top

Point of Service (POS)
Another variation on the traditional PPO plan. POS plans are similar to, but tend to be less strict, than EPOs. For example, whereas EPOs require that patients designate primary care physicians (PCPs), POS plans don’t always require a PCP. In addition, EPOs usually require that patients seek PCP referral for specialty care in order to receive benefits, but with POS plans a referral isn’t usually necessary to receive benefits - particularly if the patient chooses an in-network provider for care. Keep in mind that all types of PPOs vary depending on their carriers and where they’re located.

Preferred Provider Organization (PPO)
A network of health professionals who are compensated on a fee-for-service basis. That is, providers charge for services insureds seek only at the time those services are rendered. A PPO network charges predetermined, discounted fees on services that are provided by its member providers, plus it offers a contractual promise that its providers will adhere to certain practice management techniques that promote cost effectiveness. This contractual agreement is offered in exchange for a benefit plan design that possesses significant financial incentives for beneficiaries to seek care through the preferred panel of providers. PPO participants receive better benefits when they use the services of a preferred provider.

Preexisting Condition
A physical or mental condition, regardless of the cause for the condition, for which medical advice, diagnosis, care or treatment was recommended or received within a specified time period prior to enrollment dates. Under HIPAA, pregnancy existing on or before the enrollment date is not considered a preexisting condition.

Precertification
Refers to insurance plan regulations that are designed to prevent unnecessary treatment or hospitalization and contain medical costs in general. Such regulations require the employee to notify the insurance company in advance of certain medical procedures – in other words, to precertify the procedure. When the employee fails to precertify, the penalties may include nonpayment or reduced payment for benefits. Once again, plans vary according to which procedures require precertification. Usually things such as overnight hospitalization and outpatient surgery are affected.

Premiums
The money paid to insurance companies for health care coverage. With employee groups, premiums are usually paid on a monthly basis.

Provider
Health professionals who provide health care services. While the term provider often refers to a medical doctor or a dentist, it can also mean a hospital or other organization that provides health care.

Schedule of Benefits
Sets out the maximum amount of money an insurance company will pay for certain covered expenses under a plan. Sometimes an insurance company will use words like usual, reasonable or customary to indicate the maximum amount it will pay for a particular service. If the insurance company’s scheduled fee for an open-heart surgery, for example, is less than the actual charges incurred by the insured employee, he or she may be responsible for paying the extra charges above the amount indicated in the schedule. Any charges above the maximum amount usually will not be considered covered expenses, therefore it will not be credited to the employee’s deductible and out-of-pocket limits.

Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA)
Federal law that requires employers to offer the same health insurance coverage to employees over age 65 as they provide for younger employees. Under TEFRA, an employee has the option to elect either her employer’s health plan or Medicare as his benefit payer.

Benefit Waiting Period
A period of consecutive days or months for which no benefit is payable.  This often applies to dental or disability benefits.  The duration of the waiting period is shown in the Schedule of Benefits.

back to top