Common Terms Defined

Need help with health coverage lingo? Here's a list of some of the terms you'll likely see as you review health plan information for you and your family.

Coinsurance

Coinsurance is a predetermined percentage of the total cost you pay as a health plan member for medical services, such as office visits, lab work and emergency room care.

COBRA

COBRA refers to the Consolidated Omnibus Budget Reconciliation Act, which is Federal legislation that lets plan members who leave their jobs (voluntarily or involuntarily) continue to purchase health insurance through their employers for up to 18 months. It only applies for people who worked at a company with 20 or more employees.

Copayment

Copayment is the fee that you are responsible for paying as a member of a health insurance plan for health care services, such as office visits, emergency room care and lab work.

Deductible

A deductible is the fixed amount you pay out of pocket before a health insurance plan begins to cover health care costs.

Evidence-based medicine (EBM)

Evidence-based medicine means that doctors use experience with other patients and reputable clinical research to determine the most effective tests and treatments for their patients.

Flexible spending accounts (FSAs)

With an FSA or transit account sponsored by your employer, you can set aside pre-tax dollars from your paycheck each year to pay for medical expenses, dependent care or commuter expenses. Unused funds do not carry over, so it's important to plan carefully. The IRS determines what expenses are covered. You can check out what expenses are covered by visiting the IRS website.

Group coverage

Group coverage can be part of a health and wellness plan. It is offered by an employer or other entity, such as a retiree association, to its members, such as employees, employees' families and retirees.

HIPAA

HIPAA refers to The Health Insurance Portability and Accountability Act of 1996, a piece of Federal legislation that allows people to qualify immediately for comparable health insurance coverage when they change their employment or relationships. It also protects the security and privacy of patients by restricting the use of medical information.

Health reimbursement accounts (HRAs)

Some employers set up HRAs and contribute to them to help you cover medical expenses you would normally cover yourself. Employers decide whether to let the remaining balance carry over to the next year.

Health savings accounts (HSAs)

An HSA, when paired with a high-deductible health plan, allows you to contribute pre-tax dollars from your paycheck to pay for current medical expenses, save for future medical expenses and grow your retirement savings. And the account is yours to keep even if you change employers or benefits.

High-deductible health plan

The IRS sets the guidelines for high-deductible health plans. For example, in 2012 a high-deductible health plan is one that has:

• A deductible of $1,200 for individuals and $2,400 for families
• A maximum out-of-pocket cost of $6,050 for individuals and $12,100 for families

Learn more and view the current guidelines.

In-network

In-network refers to doctors or other health care providers that have agreed to provide services to a health plan's members at a negotiated rate. Plan members usually pay less when using an in-network provider because the cost to the health plan is lower.

Lifetime maximum benefit

The lifetime maximum benefit is the total amount a health plan will pay for your health care costs during your lifetime.

Open enrollment

Open enrollment is the time period when employees or other eligible individuals can choose (or modify) employer-sponsored health care for the next calendar year. It usually occurs sometime between October and December each year, but can happen at any time of the year.

Out-of-pocket

Out-of-pocket refers to the amount of money you are required to pay for health care services. Some plans have out-of-pocket maximums, after which the plan pays 100% of a member's health care costs. Deductibles and copayments are examples of out-of-pocket costs.

Premium

A premium is the amount you pay each month to have health insurance plan coverage. If you get health coverage through your employer, the premium is usually deducted from your paycheck.

Primary care physician

A primary care physician is the doctor or other provider, such as a nurse practitioner, who is responsible for monitoring an individual's overall health care needs. Managed care plans often require that a member choose a primary care physician who refers them to specialists and other providers as needed.

Qualifying event

A qualifying event is when health plan members experience a major change in their life, such as a marriage, divorce, adoption or birth of a child. Such events make them eligible to change their employer-sponsored insurance coverage outside of the normal enrollment period.