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Group Health |
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Group Dental |
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Group Disability |
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Group Life |
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Group Vision |
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Corporate Succession Planning |
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Group Voluntary Benefits |
Accidental Injury - A spontaneous event, unforeseen and unintended resulting in injury.
Adverse Selection - The tendency of more bad risks than good risks to purchase and maintain insurance.
Attained Age - A Person’s age at any point or time (age at policy issues, renewal or conversion).
Beneficiary - The designated recipient of the life insurance benefits or proceeds upon the death of the insured. The beneficiary designation is the right and responsibility of the policy owner.
Cash Value - Money accumulated in a permanent policy which the policy owner may borrow as a policy loan or receive if the policy is surrendered before maturity. Surrender charges may be assessed at policy surrender. Upon maturity or endowment the cash value is paid to the policy owner. Some financial authors suggest that cash value may be a source of supplemental income.
Claim - The financial demand covered in whole or in part by the insurance. In the company’s evaluation/determination of the claim, the time of treatment is decisive, not the time of the occurrence of the injury/illness.
COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985) -
- This Act states employers with 20 or more employees must provide a health coverage continuation option to all covered employees and dependents up to 18 months in the event of;
- Termination of employee (unless it is for cause as defined by federal law).
- Reduction of hours for employee, so they no longer qualify as a full time employee.
- Coverage may continue up to 29 months if an individual qualifies for Social Security Disability.
- Coverage may continue for dependants up to 36 months for certain qualifying events;
- Death of Employee
- Divorce or legal separation
- Employee’s entitlement to Medicare benefits.
- Loss of dependent status.
- Multiple location groups even if multi-state will not effect any COBRA benefits.
- mployers may require a former employee or their surviving spouse to pay up to 102% of the premium.
- The premium for an employee disabled at the time of termination may be increased to 150% of the premium after the 18th month of continued coverage.
- Employees must be notified of their right to continue coverage. The employee or the beneficiary must notify the employer within 60 days if they elect to continue coverage.
- The continuation coverage:
- Requires no evidence of insurability and provides the same benefits as the group policy.
- Covers preexisting conditions if covered under the group policy.
- If insured carried dependent coverage on the group, dependent coverage must be made available on the continuation policy.
- Events that will cause termination of continuing health coverage by COBRA are:
- Timely premium payments are not made.
- Employer ceases to maintain any group health plan.
- Employee becomes eligible for Medicare benefits; dependents remain under COBRA.
- Employee becomes eligible for any other group health plan.
- Employee converts to an individual health plan.
- Notification of an individual’s right to continue coverage under COBRA is required at 2 times. The first time is when a group plan commences or is amended to include the continuation of coverage provision. The second time that an insured must be notified under COBRA is when a qualifying event occurs.
Coinsurance - A participation requirement whereby the insured must share, on a percentage basis, the cost of expenses in excess of the deductible. An example would be 80/20 meaning the insurer pays 80% and the insured pays 20% of the remaining medical expense after the deductible has been met.
Consumer-Driven Health Plans (CDHP) -Various consumer-driven plans that help insured’s control benefit costs by allowing insured’s to decide how their health plan funds are used. Examples include HSAs, HRAs and FSAs.
Contract Fee Schedule Plan - A special benefit plan where practitioners have agreed to a fee schedule. Therefore, when they participate in the plan, they agree to accept a certain fee as payment in full for the treatment provided.
Copayment - The amount that the policy-holder must pay out of pocket before the health plan pays for a particular visit or service. For example, a policy-holder might pay a $45 copayment for a doctor's vis’t, or to obtain a prescription. A copayment must be paid each time a particular service is obtained.
Coverage limits - Some health plans only pay for health care up to a certain dollar amount. The policy-holder may be expected to pay any charges in excess of the health plan's maximum payment for a specific service. In addition, some plans have annual or lifetime coverage maximums. In these cases, the health plan will stop payment when they reach the benefit maximumand the policy-holder must pay all remaining costs.
Deductible - A cost containment method used in insurance and designed to help control rising premium costs. It is usually expressed as a specific dollar amount that the insured pays first, such as $250.
Effective Date – The date when insurance coverage begins (may also be known as inception date).
Endodontics – Services covering dental pulp care and root canals.
Endorsement – A form changing the provisions and attached to a policy (also known as a rider).
Endowment – The maturity date or time at which the cash value equals the face amount. If the policy matures, it is said to endow, and the proceeds are paid to the policy owner.
Exclusions - Not all services are covered. The policy-holder is generally expected to pay the full cost of non-covered services out of their own pocket.
Executory Contract – A contract that promises action in the event of a specified future occurrence.
Face Amount - The death benefits payable on a life policy; may also be called limit of liability.
Fiduciary - An agent or broker who handles the insurer’s funds in a trust capacity and submits all premiums promptly.
Flexible Spending Account (FSA) - An employer-established plan that permits the employee to defer pre-tax earnings into a specifically designated account from which the employee may withdraw funds to pay un-reimbursed medical expenses (e.g. eyeglasses, elective surgery, deductible and coinsurance requirements that are part of the insured medical claims, etc.). Generally, the employer sets a cap limiting the maximum amount the employee can put into the account. Employee contributions to this account must be spent during the plan year; the employee forfeits any unused funds in the account at the plan year’s end.
Grace Period - A period of time after the premium due date before the policy lapses for nonpayment of premium. The grace period must not be less than 7 days for weekly, 10 days for monthly and 31 days for all other modes. The grace period varies with mode of premium.
Health Reimbursement Arrangements (HRA) - A type of health insurance plan that reimburses employees for qualified medical expenses. The plans are entirely employer-funded and there is no limit on the amount an employer can contribute. Employees are not allowed to contribute so contributions may not be attributable to any salary reductions. Cash payouts are not permitted, but a former employee may continue to receive subsequent coverage periods. Since an HRA is a group health plan, it is subject to COBRA continuation coverage requirements. Employer-provided coverage and medical care reimbursement amounts under an HRA are excludable from the employee’s gross income. HRAs may not reimburse expenses before the HRA was in existence.
Health Savings Account (HSA) - A tax-advantaged medical savings account available to taxpayers in the United States who are enrolled in a High Deductible Health Plan (HDHP). The funds contributed to the account are not subject to federal income tax at the time of deposit. Funds may be used to pay for qualified medical expenses at any time without federal tax liability. Withdrawals for non-medical expenses are treated very similarly to those in an IRA account in that they may provide tax advantages if taken after retirement age, and they incur penalties if taken earlier. These accounts are a component of consumer driven health care.
HIPAA (Health Insurance Portability and Accountability Act of 1997) -
1. HIPAA was designed to provide coverage for people with preexisting conditions. Prior to this legislation, an employee with preexisting conditions was normally unable to obtain coverage when changing employers.
2. HIPAA guarantees the continuation of health benefits to individuals who have been covered for 12 months immediately preceding a change of employment and who choose to participate in the new employer’s group health plan.
3. HIPAA now allows a new employee to enroll immediately without waiting if the requirement of credited coverage is met. If a new enrollee does not meet these requirements, a preexisting condition exclusion of 12 months may be imposed.
4. This law also applies to employees leaving the employer to become self-employed. They cannot be denied coverage.
5. If an insurer decides to remove all affected group plans from a state, the people losing coverage may obtain coverage immediately with a personal health plan. These situations do not require the new coverage to be underwritten by the same insurer.
6. Any coverage prior to a break in continued coverage of 63 days or more, within the 12-month qualification period, will not be credited against a preexisting condition exclusion period.
7. Existing HIPAA coverage must be renewed unless one of the following exists:
(a) Failure of the plan sponsor to pay premiums timely.
(b) Failure of the plan sponsor to comply with a material provision, such as maintaining a minimum required percentage of participation, as long as the provision is permitted by state or federal law.
(c) The plan sponsor committed an act of fraud or intentional misrepresentation of a material fact regarding the terms of the plan.
(d) The employer is no longer a member of the association that sponsors a plan.
(e) There is no covered employee that lives or works in the service area of a network plan.
(f) If the issuer of coverage ceases to offer coverage in a particular market, the issuer must notify each plan sponsor, participant and beneficiary at least 90 days prior to discontinuation of coverage, and the issuer must offer each plan sponsor the option to purchase other health insurance coverage being offered by the issuer to a group health plan in the market. If the issuer exits the market entirely, the period of notice is 180 days, and the issuer cannot reenter the market for at least 5 years.
HMO - Health maintenance organization (HMO) is a type of managed care organization (MCO) that provides a form of health insurance coverage in the United States that is fulfilled through hospitals, doctors, and other providers with which the HMO has a contract. The Health Maintenance Organization Act of 1973 required employers with 25 or more employees to offer federally certified HMO options. Unlike traditional indemnity insurance, care provided in an HMO generally follows a set of care guidelines provided through the HMO’s network of providers. Under this model, providers contract with an HMO to receive more patients and in return usually agree to provide services at a discount. This arrangement allows the HMO to charge a lower monthly premium, which is an advantage over indemnity insurance, provided that its members are willing to abide by the additional restrictions.
Home Health Care - For patients that are at home but cannot fully provide for all their needs. Often this care is provided by a visiting nurse or person other than a physician.
Hospitalization - Surgery or medical treatment in a hospital or clinic as an inpatient when it is medically necessary to occupy a bed overnight.
Indemnity Plan - With indemnity plans, the individual pays a pre-determined percentage of the cost of services, and the insurance company pays the other percentage. For example, an individual might pay 20 percent for services an the insurance company pays 80 percent. The fees for services are defined by the providers and vary from physician to physician. Indemnity plans offer individuals the freedom to choose their health care professionals.
Inpatient - Surgery or medical treatment preformed in a hospital. It usually means that you will occupy a bed or stay overnight, but can include anything that hospitalizes you.
Insurability - The ability of an individual to meet an insurer’s underwriting requirements.
Issue Age - The individual’s actual or closest age on the policy issue date.
Lapse - Termination of a policy because premium has not been paid by end of the grace period.
Liability - The state of being responsible for some obligation or debt. In the case of insurance, the insurer will have a liability when you submit a claim for a covered service.
Lifetime Maximum Benefit (or Maximum Lifetime Benefit) - The maximum amount a health plan will pay in benefits to an insured individual during that individual's lifetime.
Limitations - Limitations can restrict the amount of coverage; length of time covered and may also refer to waiting periods. Limitations may also refer to the exclusion of certain benefit's or services, or there may be limits to the extent or conditions under which certain services are provided.
Long-Term Disability (LTD) –
1. This coverage is characterized by benefit periods of either 2 years, 5 years, or to age 65.
2. The elimination period will most commonly will be either 30,60, 90 or 180 days.
3. Benefit amounts are usually limited to about 60% of the participant’s income. Benefits stated in a policy are the maximum benefit amounts and maximum period of time covered.
4. Normally, the waiver of premium for disability applies after a prolonged period specified in the policy.
5. Long term group disability protection carried by an employer of 20 or more employees must continue coverage past the age of 65. The benefits may be paid on a limited duration scheduled by the age of the employee at time of the disabling incident but must conform to the ADEA.
Maximum Benefit - The maximum benefit is the total dollar amount an insurer will pay toward the cost of dental care for a specified period, usually a year. Therefore, you may have situations where the care you have actually received will exceed your maximum benefit
Medical Information Bureau (MIB) - The primary purpose is to collect adverse medical information about an applicant’s health (supported by insurance companies). As of January 1, 1995 the MIB provides explanations to all applicants who are denied coverage allowing the consumer to check the accuracy of the MIB information file.
Medical underwriting - The use of medical or health status information in the evaluation of an applicant for coverage (typically for life or health insurance). As part of the underwriting process, health information may be used in making two related decisions: whether to offer or deny coverage; and what premium rate to set for the policy. The use of medical underwriting may be restricted by law in certain insurance markets. Where allowed, the criteria used should be objective, clearly related to the likely cost of providing coverage, practical to administer, consistent with applicable law, and designed to protect the long-term viability of the insurance system. The use of medical underwriting in the individual health insurance market has met with some controversy. While medical underwriting is designed to keep premiums as low as possible, critics say that the practice prevents some people with relatively minor and treatable pre-existing conditions from obtaining health insurance. Some states have outlawed medical underwriting as a condition for obtaining insurance; these states generally have the highest average premiums for individual insurance.
Morbidity Table - Table showing the mathematical probability of disability (illness or injury).
Network - A group of doctors, hospitals and other health care providers contracted to provide services to insurance company’s customers for less than their usual fees. Provider networks can cover a large geographic market or a wide range of health care services. Insured individuals typically pay less for using a network provider.
Oral Surgery - Surgical treatment of diseases, injuries and jaw defects.
Orthodontics - Services for teeth alignment and other irregularities of the teeth. Dental specialty that treats misalignment of teeth. Treatment usually consists of braces or a retainer.
Out-of-Network - This phrase usually refers to physicians, hospitals or other health care providers who are considered nonparticipants in an insurance plan (usually an HMO or PPO). Depending on an individual's health insurance plan, expenses incurred by services provided by out-of-plan health professionals may not be covered, or covered only in part by an individual's insurance company.
Out-of-pocket maximums - Similar to coverage limits, except that in this case, the member's payment obligation ends when they reach the out-of-pocket maximum, and the health plan pays all further covered costs. Out-of-pocket maximums can be limited to a specific benefit category (such as prescription drugs) or can apply to all coverage provided during a specific benefit year.
Outpatient - Surgery or medical treatment in a hospital or clinic where it is not medically necessary to occupy a bed.
Peril - Specific cause of a loss.
Periodontics - Services for the treatment of gum problems and disease.
Policy Period - Time interval when the policy is in force: A&H Policy typically 1 year.
POS – Point-of-Service - This is a hybrid of an HMO and a PPO plan. Coverage depends on the “point” where you receive services, hence the name “Point-of-Service.” If you use a provider within the POS network, you pay like an HMO (usually just a co-pay), with no deductible. If you use a provider outside the POS network, you pay like a PPO (co-pay, deductible, percentage).
PPO - In health insurance, a preferred provider organization is a managed care organization of medical doctors, hospitals, and other health care providers who have covenanted with an insurer or a third-party administrator to provide health care at reduced rates to the insurer's or administrator's clients. The idea of a preferred provider organization is that the providers will provide the insured members of the group a substantial discount below their regularly-charged rates. This will be mutually beneficial in theory, as the insurer will be billed at a reduced rate when its insured utilize the services of the "preferred" provider and the provider will see an increase in its business as almost all insured in the organization will use only providers who are members. Even the insured should benefit, as lower costs to the insurer should result in lower rates of increase in premiums. Preferred provider organizations themselves earn money by charging an access fee to the insurance company for the use of their network. They negotiate with providers to set fee schedules, and handle disputes between insurers and providers. PPOs can also contract with one another to strengthen their position in certain geographic areas without forming new relationships directly with providers.
Pre-existing Conditions - Prior medical conditions for which the applicant has received, or should have received, medical advice or treatment within a specified period before the effective date of a policy.
Preventive Dentistry - Dental procedures concerned with the prevention of dental diseases by protective and educational measures. May include exams, cleanings, x-rays and fluoride.
Primary Care Physician - A primary care physician, or PCP, is a physician who provides both the first contact for a person with an undiagnosed health concern as well as continuing care of varied medical conditions, not limited by cause, organ system, or diagnosis. A PCP generally does not specialize in any medical specialty, such as neurology, cardiology, or pulmonary, nor perform surgery. The term "PCP" “s m”st commonly used in the United States. A primary care physician can be described by training, skill and scope of practice, role in the health care system, and the usual setting in which care is delivered. Primary care physicians are declining in numbers in many developed countries.
Probationary Period - Specified period of time before new coverage goes into effect for specified conditions (pre-existing conditions).
Prosthodontics – A dental procedure specializing in the restoration of natural teeth and replacement of teeth. Includes, but is not limited to: crowns, bridges, dentures, dental implants, TMD-jaw joint problems, and oral cancer reconstruction.
Rider - An endorsement to an insurance policy that modifies the contract provisions of that policy. Life insurance riders normally increase the benefits, but may also be written to reduce benefits.
Self-funded (Self Insured) – Self-funded health care describes a self insurance arrangement whereby an employer provides health or disability benefits to employees by assuming the direct risk for payment of their claims for benefits. The terms of eligibility and coverage are set forth in a plan document which includes provisions similar to those found in a typical group health insurance policy.
Unless exempted, such plans create rights and obligations under the Employee Retirement Income Act of 1974 (“ERISA”). Many employers seek to mitigate the financial risk of self funding claims under the plan by purchasing stop loss insurance from an insurance carrier. These policies typically provide for risk retention limitations both on a specific claim and aggregate claims basis. An important aspect of self funded group health plans lies in the requirement that the employer remain liable for funding of plan claims regardless of the purchase of stop loss insurance. In other words, only the employer has a contractual relationship with plan participants and beneficiaries. The stop loss policy runs solely between the employer and the stop loss carrier and creates no direct liability to those individuals covered under the plan. This feature provides the critical distinction between fully insured plans (subject to State law insurance regulations) and self funded health plans which, under the provisions of Section 514 of ERISA, are exempt from State insurance regulations. Stop loss policies should be distinguished from “reinsurance” arrangements. Under reinsurance arrangements, one insurance carrier cedes risk to another carrier to lessen its risk. Reinsurance arrangements fall under specific State insurance regulations designed to assure the financial integrity such arrangements.
While some large employers self-administer their self funded group health plan, most find it necessary to contract with a third party for assistance in claims adjudication and payment. Third Party Administrators provide these and other services, such as access to preferred provider networks, prescription drug card programs, utilization review and the stop loss insurance market. Insurance companies offer similar services under what is frequently described as “administration only” contracts. In these arrangements the insurance company provides the typical third party administration services but assume no risk for claims payment.
Service Area – The primary geographical area of coverage and service provided by a Health Maintenance Organization (HMO).
Short-Term Disability (STD) –
1. Short-Term Disability Income Plans are characterized by maximum benefits for periods of rather short duration, such as 13, 26 or 52 weeks. Often, benefit periods are coordinated with the employer’s “sick pay plan”. This disability plan is always less than 2 years.
2. The elimination period may be as short as zero days for accident and 7 days for sickness but is rarely more than 15 or 30 days.
3. Benefits are typically paid weekly and range from 50% to 100% of the individual’s income.
4. Due to the ruling of the ADEA any employer with 20 or more employees covered by a short term group disability plan must pay the same level of benefits to those employees age 65 or over as those under age 65.
Skilled Nursing Facility - A facility for patients that no longer require hospitalization but are not yet able to care for themselves at home.
Subrogation - The legal process by which an insurer seeks recovery of the amount paid into the insured from a third party responsible for having caused the loss. Subrogation transfers an insured’s legal right of recovery to the insurer that has paid a claim, and also:
(A) Prevents the insured from collecting twice for the same loss;
(B) Helps the insurer maintain lower insurance rates;
(C) Ultimately holds the responsible third party accountable for the loss.
SurgiCenter - A facility where outpatient surgery is performed for those patients that require general anesthesia but are not required to stay overnight.
Tri-Care (The Uniformed Services Health Program) – Three levels of care: Basic, which replaced CHAMPUS (no premiums charged), Level II, and Level III. Levels II and III provide greater benefits and have a monthly premium charged per level of benefits.
Urgent Care Center – A facility, usually staffed 24 hours a day and 7 days a week, where a patient can receive acute, but non-life threatening, medical treatment without an appointment.
Waiting period – Specified period of time set by an employer before an employee is eligible to enroll for group benefits (normally 30, 60 or 90 days).