Glossary

401(k)

A 401(k) is a type of personal pension plan offered by an employer. It provides tax advantages on money set aside for retirement. An employee asks to have part of his or her salary paid directly, or deferred, into the 401(k) fund. Taxes on contributions to 401(k) plans and the earnings on those contributions are deferred until the money is withdrawn from the plan. At the time money is withdrawn from the plan, it is taxed as regular income. Many employers provide matching contributions to 401(k) plans. If your employer provides a 401(k) match this plan is likely to be one of the best savings opportunities available to you.

Accreditation

A term typically applied to hospitals and other health care facilities, as well as certain health benefits plans, indicating that the facility or plan has met operating, quality and other standards established by a third party review agency.

Adjudication

The process used by health plans to determine the amount of benefit payment for a covered health care service. The term usually refers to the processing of a health care claim. The process includes a review of whether the service is covered by the health plan and whether deductibles, co-insurance, co-payments or other benefit limits apply.

Advanced (Advance) Directives

Sometimes called a "living will." An Advance Directive is a legal document that tells your physician what kind of care you want (and what kind of care you don't want) if you become ill and can't make medical decisions or communicate your decisions (for example, if you are in a coma). Hospital staff will routinely ask you if you have an Advance Directive when you are admitted to the hospital. Laws about Advance Directives vary in each state. You should be aware of the laws in your state. If you have an Advance Directive, be sure both your family and your physician have copies and are aware of your wishes.

Allowable Expense(s)

Also a "covered expense." Refers to amount of a charge for medically necessary health care that is "covered," or eligible to be paid by a health benefits plan.

Ambulatory Care

See Outpatient Care

Annual Limits

A limit on the amount your plan will pay in a year while you're enrolled in a health plan. Limits are sometimes placed on prescription drugs or hospital stays. After an annual limit is reached, you must pay the rest of your health care costs for the year.

Appeals process

A process maintained by an employer or health plan that allows an individual to appeal an adverse benefit decision. If all or part of your claim is denied and you believe this decision is in error, you may use the appeals process to initiate an additional review of the claim. In some cases, your plan may not have had enough information to make a decision, and the appeals process gives you the opportunity to provide that information. To find out about your plan's appeals process, visit the health plan's website or call the toll-free number on your ID card.

Authorization

A health plan's process for approving payment for medical services covered by an individual's benefits plan. Depending on the plan, such authorization may be required before services are rendered (see Pre-authorization/Precertification).

Benefit

The term "benefit" may refer in general to a health plan (your "benefits"), specifically define the medical services covered under any particular health plan (a surgery "benefit") or refer to the payment received for services covered under the terms of the policy.

Benefit Maximum

See Lifetime Maximum

Benefit Period

The period during which benefits will be paid under a health benefits plan. This period is specified in your Certificate of Coverage or other plan document.

Brand-name prescription drug

This drug is protected by patent and can only be given to you with a prescription. In a health plan that includes prescription drug coverage, there may be differences in what the plan covers or pays for brand-name drugs versus generic drugs. Check your plan to find out if brand-name drugs are covered under your policy. If they are, check to see if you have to pay more for them.

Capitation

In some kinds of managed care plans, the health insurer pays physicians that participate in the network a fee called capitation. Generally, this is a fixed, prepaid amount that the provider receives as compensation for all services provided to a plan member.

Case management

A process of identifying individuals who have complex health care needs and coordinating the care they receive in an attempt to improve care outcomes.

Certificate of Coverage (Certificate of Insurance)

A description of the benefits, limitations and exclusions included in a health benefits plan. A copy of the Certificate of Coverage is generally provided when you enroll in a plan. Replacement copies can be obtained by contacting your plan directly, or in many cases through your employer.

Certified Financial Planner (CFP®)

An individual who assists others in financial planning and has met the following qualifications from the Certified Financial Planner Board of Standards, Inc. (CFP Board):

• Successfully completed the CFP Board's certification examination, which tests the individual's knowledge of key financial planning tools
• Acquired three to five years of financial planning-related experience before receiving the CFP certification
• Agreed to the CFP Board's code of ethics
• Agreed to complete 30 hours of financial planning continuing education classes every two years in areas such as estate planning, retirement planning, investment management, tax planning, employee benefits and insurance

Claim

Information submitted to a health plan to request payment for medical services provided to a person covered under that health plan.

Co-insurance

The portion of the cost of covered medical services paid by the patient under a health plan, after first meeting any applicable plan deductible. Co-insurance amounts, which are typically a percentage of the cost, may vary by type of service. Co-insurance requirements are specified in the plan documents.

Co-payment

A set dollar amount or portion that you pay for your medical services. Usually, co-pays start after you first pay any deductible your plan has. Co-pays may differ by type of service. You can find your co-insurance rules in your plan documents.

COBRA (Consolidated Omnibus Budget Reconciliation Act of 1986)

A law that permits individuals to continue coverage temporarily under most employer health insurance plans when they would otherwise lose eligibility due to a loss of employment or a change in family status (such as divorce). The cost of this continued coverage is paid by the employee or dependent who elects it. Small employers, those with less than 20 employees, are generally not subject to COBRA.

Coinsurance

The portion of the cost of medical services that you pay for, after you first pay any deductible your plan has. Co-insurance amounts are typically a percentage of the cost. (For example, your health plan may pay 80% and you may pay 20 %.) The percentage may differ by type of service and whether services are provided by providers who participate in Aetna's network. You can find your co-insurance rules in your plan documents.

Consumer-directed health plan

Also referred to as "consumer-driven" or "consumer choice" health plans. A relatively new type of health plan designed to give consumers more control over a portion of their health benefit dollars, typically through a health fund or account that can be used to pay for covered medical expenses. Most health funds allow unused dollars to be rolled over from year to year, for as long as an individual is in the plan, and some plans allow the funds to go with you, even if you change jobs.

Contract Holder

An employer or individual who purchases a health benefits plan from a health insurer.

Conversion Option

An option that allows an individual who is leaving an employee health benefits plan to purchase individual coverage at a pre-determined rate. This is often an option to COBRA continuation. Conversion is only available under certain plans.

Coordination of Benefits (COB)

When an individual is covered under more than one health benefits plan, coverage is "coordinated" to avoid duplicate payments. Rules establish which plan will pay benefits first and allow for sharing of claims information between plans.

Covered Expense/Covered Services

See Allowable Expense(s)

Credentialing

A system for assessing the professional/clinical qualifications and record of a physician, health professional or health facility. This includes a review of relevant training, academic background, experience, licensure, board certification and/or accreditation to provide certain types of medical services. Most health plans credential physicians and facilities before adding them to their list of participating providers and periodically re-credential these providers while they remain in the network.

Custodial Care

Services provided to attend to an individual's daily living activities, which does not require trained medical personnel. Examples include assistance in walking, bathing, dressing, and feeding. Coverage for custodial care is not included in most basic health benefits plans, including Medicare; check your plan documents to see if it is covered under your plan. Custodial services typically ARE covered under long term care insurance, making this a valuable supplement to traditional health coverage.

Customary and Reasonable

Usual, Customary and Reasonable (UCR)

Deductible

A set amount that you must pay for your medical services before the health plan starts to pay.

Defined Contribution Plan

A pension, health or other benefits plan typically provided by an employer under which the employer gives each employee a fixed amount of money, or "contribution." When provided for health benefits, this amount can be used either to purchase health insurance or directly to pay for the cost of health services. There are distinct differences among the types of defined contribution plans offered from employer to employer. You should check with your employer for details if they offer these plans.

Dependent

A child or spouse who gets health insurance coverage through your plan. Often times there are limits for enrolling a new dependent in a health plan, so check with your health plan provider if you are getting married, having a new baby or adopting a child. Also keep in mind that your child may no longer be covered under your health plan when he or she reaches a certain age.

Dependent Care Reimbursement Account

These accounts let you set aside pre-tax dollars to pay for eligible childcare expenses. Because the reimbursement account contributions are not taxed, you decrease your taxable income while increasing your available cash. Funds do not roll over from year to year, are not portable and do not accrue interest.

Direct Access

Also called "open access." A term used to describe certain health benefits plans under which an individual may go directly to any participating provider in the health plan's network without a referral from a primary care physician.

Disability

A physical or mental impairment that substantially limits one or more of the major life activities of an individual.

Disease Management

A program for identifying individuals with a specific illness or disease (usually chronic in nature) and using an integrated health care approach to help prevent recurrence of symptoms, maintain a high quality of life and prevent future need for medical care. Individuals enrolled in a disease management program may receive educational information, supplies and follow-up contact with medical professionals to help them manage their illness.

Drug Formulary

See Formulary

Durable Medical Equipment

A piece of medical equipment, such as a wheelchair, that can be used repeatedly, primarily serves a medical purpose, is generally not useful to a person in the absence of an illness or injury, and is appropriate for use at home. Other examples include hospital beds and oxygen equipment. It is important to note that some health benefits plans do not cover durable medical equipment as part of the basic plan. You should understand whether your benefits plan covers DME and, if not, evaluate whether you should purchase separate coverage.

Effective date

The date on which the coverage under a person's health plan goes into effect. Typically, the effective date of your coverage can be found on your ID card.

Emergency

A serious medical condition resulting from injury or illness that arises suddenly and requires immediate medical attention.

Employee Assistance Program (EAP)

Programs that offer access to professional counselors who provide confidential assessment and short-term counseling to employees and their families. Counselors assist employees in dealing with various issues, including marriage and family problems, stress-related problems, financial and legal difficulties, and psychological and workplace conflict. The program often includes 24-hour phone access. Check with your employer to see if there is an EAP available to you.

Employee Retirement Income Security Act of 1974 (ERISA)

A law that regulates employer-based health, pension and other benefit plans.

Enrollee

A subscriber or dependent covered under a health plan, sometimes also referred to as a "member."

Essential Benefit

As defined by PPACA, and essential benefit are a set of health care service categories that must be covered by certain plans, starting in 2014. These include doctor office visits, hospitalizations, and prescriptions.

Exchange

A new way for people and small businesses to buy health plans. Starting in 2014, state-run exchanges will offer a variety of plans.

Excluded Services

Specific conditions or circumstances that are not covered under a health plan. (One example might be plastic surgery.) These are listed in the plan's Certificate of Coverage or other plan documents and sometimes can be found described in general in marketing or other plan materials. Check these exclusions carefully before enrolling in any plan.

Exclusion

Specific conditions or circumstances that are not covered for benefits under a health plan. These are listed in detail in the plan's Certificate of Coverage (COC) or other plan document and sometimes described more generally in marketing or other plan materials. Check exclusions carefully before enrolling in a plan.

Experimental Services or Procedures

Also called "investigational." Health care services, supplies, treatments or drug therapies that have yet been determined to be effective and safe in treating the illness or injury for which their use is proposed.

Explanation of Benefits (EOB)

Under some health insurance plans, an Explanation of Benefits form is provided directly to the enrollee to explain how a health benefits claim was paid. In addition to claims payment information, the EOB often includes information on the appeals process. EOBs are sometimes mailed and are often now available through the Internet.

Family and Medical Leave Act

A law that requires your employer to give you up to 12 work weeks of unpaid leave per year for the following reasons:

• Birth and care of a newborn baby
• Adoption or foster care placement
• Care for an immediate family member (spouse, child, or parent) with a serious health condition
• Medical leave when you are unable to work because of a serious health condition

Only companies with 50 or more staff members are required to comply with this law, so check with your human resource department about their medical leave policy if you work for a smaller company. Also, to qualify you must have worked at your company for at least 1,250 hours in the last 12 months before you begin your leave.

Federal Employees Health Benefits Program (FEHBP)

The health benefits program under which most Federal government employees are covered.

Fee for Service

A reimbursement system that pays physicians or other providers a fee for each service they perform, often based on a schedule of fees.

First Dollar Plan

This term is applied generically to a health benefits plan that does not have a deductible. More recently, it is also used to describe a plan that does have a deductible but also incorporates a benefits "fund" or account that can be used to pay for medical services before the deductible is met. Unlike an HRA or HSA, the fund benefit incorporated in these first dollar plans generally does not roll over from one year to the next.

Flexible Spending Account (FSA)

A FSA is an account tied to an employer-sponsored health plan. It can be used to pay for medical expenses. Contributions to the account are typically made by the employee. The contributions are free of federal, Social Security and most state taxes. You must use the funds before the end of the year or you lose them. Funds do not accrue interest.

Formulary

A list of covered prescription drugs established by a health plan with the assistance of their Pharmacy and Therapeutics Committee. Generally includes both brand-name and generic prescription drugs. Most health benefits plans that cover prescription drugs use a formulary and, within each category of covered drugs, may provide different levels of coverage based on the drug's cost, efficacy or other considerations. Formularies are subject to periodic review and modification by a health plan.

Fully Insured

An employer who pays a premium to a health plan provider to provide and administer benefits plans for its employees is said to be "fully insured." This means the insurer, not the employer, is liable for the cost of medical claims.

Generic Prescription Drugs

When the patent on a brand-name drug expires, other companies are allowed to make their own version of the drug. This is called a generic. It contains the same chemicals as the brand-name drug, but generic drugs usually cost less expensive. They are sold under the scientific name of the drug, not the advertised brand name.

Group Coverage

Plans supported by an employer or employee organization that provide health coverage to employees as well as former employees and their families in many cases. Professional and alumni associations, such as local Chambers of Commerce, may also offer group health plans.

Health Benefits Plan

A plan purchased by an individual or provided through an employer that provides payment for health care services. Some plans are limited to particular types of services such as hospitalization or dental care; others provide comprehensive benefits subject to certain exclusions and limitations. The terms of a health benefits plan are described in a plan document, and this document should be reviewed carefully when choosing a health benefits plan.

Health Care Consumerism

Health care consumerism is a movement that encourages individuals to become more involved in and take more responsibility for making smart health care decisions, managing their health benefits dollars and maintaining their overall health status.

Health Care Reform

This is a broad term for major changes happening in the United States health care system now and in the future. A bill called the Patient Protection and Affordable Care Act (PPACA) was passed into law in March 2010. The law aims to expand health care coverage, improve access to care and stabilize or even lessen the cost of health care. PPACA takes effect on the effective date of new plans on or after September 23, 2010 and on existing plans that renew on or after September 23, 2010.

Health Fund

A term applied to both Health Reimbursement Arrangements (HRAs) and Health Savings Accounts (HSAs) to describe a benefits account that can be used to pay for health care expenses.

Health Insurance Portability and Accountability Act (HIPAA)

HIPAA is a federal law enacted in 1996, designed to improve availability, portability and efficiency of health coverage by:

• Limiting exclusions for pre-existing conditions
• Providing credit for prior health coverage
• Allowing transmission of coverage information (i.e., covered family members and coverage period) to a new insurer
• Providing new rights to allow an individual to enroll for health coverage when he or she loses coverage or has a new dependent
• Prohibiting discrimination in enrollment/premiums
• Guaranteeing availability of health insurance coverage for small employers

HIPAA's Administrative Simplification and Privacy (AS&P) rules seek to improve the efficiency of the health care system by standardizing the electronic exchange of health information and protecting the security and privacy of consumer-identifiable health information.

Health Maintenance Organization (HMO)

A form of health benefits plan that provides or arranges for health services required by its members. In a traditional HMO plan non-emergency services must be received from a network of health care providers, although certain HMO plans may offer reduced benefits for care received outside of the network. In most HMO plans, members are required to select a primary care physician (PCP) from the network to provide routine care and make referrals for specialty and hospital services when appropriate.

Health Plan

A health plan that you buy or that is provided by your employer. It pays for health care services. It may be insured by an insurance company or self-insured by your employer. Some plans are limited to certain services, such as hospitalization or dental care. Other plans provide greater coverage, though they may include exclusions and limitations. The terms of a health plan are described in a plan document. Review this document carefully before you choose a health plan.

Health Reimbursement Arrangement (HRA)

This is an employer-paid account for employees and retirees. The funds are generally available to pay for deductible and co-insurance amounts, although some employers allow the funds to be used for any qualified medical expenses. Unused funds in an HRA may be carried over from year to year, according to rules defined by the employer.

Health Risk Assessment

A form or online tool that is filled out by an individual and used to assess the individual's current health status, as well as risk factors for future illness. It is a good idea to take a health risk assessment to understand your current health risks and ways in which you can reduce your risk for the future.

Health Savings Account (HSA)

This savings account allows people to pay current health care costs or save for future expenses. To be eligible, you must be covered by a high-deductible health plan and not be eligible for coverage under any other health plan. Contributions to the HSA can be made by the employer, the employee or both. Contributions are tax deductible and earn interest tax free. You can take the account with you when you leave your employer. Balances accumulate from year to year. You can use HSA funds to pay for qualified medical expenses or you can withdraw cash, but cash withdrawals become taxable and may be subject to a withdrawal penalty.

High Risk Health Insurance Pools

These private, self-funded health insurance plans are organized by state. They serve high-risk people who meet enrollment criteria and do not have access to group insurance. In most states, these pools are independent entities. Their own boards and administrators govern them. In some states they function as part of the state's department of insurance.

High-Deductible Health Plan

A health benefits plan that meets the deductible and other benefit requirements to permit a covered individual to contribute to a Health Savings Account. Benefit requirements for a high-deductible health plan are established by Federal law. For 2007, the required annual deductible was at least $1,100 for individual coverage or $2,200 for family coverage; these minimums are adjusted annually for the cost of living. Premiums for high-deductible health plans are often lower than for other health plans, and the ability to fund a Health Savings Account is an attractive feature for many individuals. Before selecting one of these plans, however, you should check the total benefits and costs against your own experience and anticipated health needs.

HIPAA

See Health Insurance Portability and Accountability Act (HIPAA)

Home Health Care

Skilled nursing or other therapeutic services provided in a home setting. Often home health care is covered as an alternative or follow-up to hospitalization or nursing home care. Check with your health plan on what services may be covered when provided in your home.

Hospice

A facility that provides supportive care at the end of life for individuals with terminal illnesses (such as cancer or AIDS).

Hospital pre-certification or pre-registration

Under some health plans, you need advance authorization before the plan will pay for certain medical services, such as going to the hospital. Check out your plan documents to see if there are any services that require preauthorization and whether you or your doctor needs to file the request.

ID Card

The identification card carried by a subscriber or dependent that provides important information relating to health coverage, such as the plan effective date, co-payments, etc. The card usually lists a toll-free number where patients or health care professionals may call for assistance with benefits. You should copy this phone number in another location in case you misplace your ID card.

Immunization

A medicine given to prevent a disease, such as the flu or measles. Immunizations stimulate the body's immune system to spot invading bacteria and viruses and destroy or disable them.

In Network

Refers to care received from providers who participate in a health benefit plan's provider network, or network of participating physicians, hospitals and health care professionals. It's important to know if your physician is in network, since many health plans provide a higher level of coverage for doctors in their network. Some plans provide coverage only for emergency services received from providers not in their network. Plan materials on the plan website would probably provide a list of providers in their network.

Incentive

Any factor (financial or not) that motivates a person to take a particular action. For example, some employers reward employees for taking positive health actions, like quitting smoking. Rewards can include cash, prizes or a lowered cost for health care.

Indemnity Plan

Often called "traditional plans." Individuals with an indemnity plan receive the same level of benefits for any provider from whom they seek care (the plan has no network). Indemnity plans often incorporate deductibles and co-insurance, and certain benefit maximums, including lifetime maximums, may also apply to the plan.

Independent Practice Associations (IPA)

A group of physicians or other providers that contract with a health benefits plan to provide services. Often you select a physician in an independent practice association as your primary care physician (PCP). You will be referred to specialists and hospitals affiliated with the IPA, unless your medical needs extend beyond the capability of these providers.

Individual Policy

Health coverage for individuals, and their families, who are either self-employed, or who are not offered health coverage through an employer or other group plan.

Individual Retirement Account (IRA)

A tax-advantaged investment account in which a person may set aside income up to a specified amount each year and usually deduct the contributions from taxable income. Contributions and interest are tax-deferred until retirement.

Inpatient care

Health care service provided after a patient is admitted to the hospital.

Investigational Services

See Experimental Services or Procedures

Length of Stay

The number of consecutive days a patient is hospitalized.

Lifetime Limits

A limit on the total coverage you may get from your insurance company over your lifetime. An insurance company may place a dollar limit on health benefits and/or limit specific benefits. (For example, you may be allowed only one gastric bypass surgery per lifetime.) After a lifetime limit is reached, the insurance plan no longer pays for covered medical services.

Lifetime Maximum

Some health benefits plans limit the total amount of benefits an individual may receive or limit the number of particular services an individual may receive over the term of the policy (for example, a plan may limit the total number of days of occupational therapy an individual may receive to 60, or have a maximum dollar amount of coverage over a lifetime). When enrolling in a plan, check your plan documents carefully to understand what, if any, lifetime maximum limits will be placed on your benefits.

Living Will

See Advanced (Advance) Directives

Long-Term Care Insurance

A variety of personal care services designed to help people with long-term physical illnesses, disabilities or cognitive impairment, such as Alzheimer's disease. Long-term care helps people overcome limitations that keep them from being independent. It provides help with day-to-day activities like bathing, dressing, and eating. IT can help supervise someone with a cognitive impairment. Long-term care can be provided at home, in the community (at home health care and adult day care), and through assisted living centers, nursing homes or other sites. Long-term care can be expensive. It is not covered to any substantial degree by medical plans, disability insurance or Medicare. Long-term care insurance can help cover the cost of long-term care services that these other plans don't cover.

Mail-Order Pharmacy (Mail-Order Drugs)

Health benefits plans often offer distribution of prescribed medication directly to the patient through the mail. Since mail-order distributors can purchase drugs in larger volumes than retail outlets, the cost charged to patients is often lower. Your health plan may have lower pharmacy copayments if you use mail-order drug delivery. Check with your health plan to see if mail order is available to you.

Managed Care

Any form of health benefits plan that actively monitors health care services received by covered individuals for effectiveness, cost efficiency and/or quality. Typical managed care plans provide a higher level of benefits for a select network of contracted providers and may require preauthorization of certain services.

Mandated Benefits

Benefits that health care plans are required to provide by state or federal law.

Medicaid

A State government program that provides health care insurance for low income people, including families and children.

Medical Savings Account (MSA or Archer MSA)

MSAs were tax-advantaged health savings accounts for individuals who are either employed by a small employer (fewer than 50 employees) or are self-employed. The MSA program was discontinued in 2003 with the authorization of Health Savings Accounts, which operate in a similar manner.

Medically Necessary

See Necessary, Medically Necessary, Medically Necessary Services or Medical Necessity

Medicare

A Federal government program that provides health care insurance to people aged 65 years or older, as well as to certain disabled people.

Medicare Advantage

Medicare Advantage is a health benefits plan provided by a carrier as an alternative to traditional Medicare Part A and Part B coverage. Medicare Advantage plans may provide additional benefits and/or different levels of coverage and may have different required contributions compared to traditional Medicare coverage.

Medicare Advantage Plan (also called Medicare Part C)

A Medicare program that gives you more choices among health plans and extends benefits beyond the Original Medicare Plan. It includes private Medicare Advantage plans (such as HMOs and PPOs) that provide Part A and B benefits to enrollees, as well as Medicare prescription drug benefits beginning in 2006. Nearly everyone with Medicare Parts A and B is eligible for a Medicare Advantage plan. Medicare Advantage plans previously were called Medicare+Choice plans.

Medicare Part A

A government supported health insurance plan that helps cover inpatient hospital care, care in nursing homes, hospice care and some home health care for qualified Americans age 65 and older and certain younger individuals with disabilities. Most people pay for Part A coverage through taxes while working and, therefore, do not pay a deductible or monthly premium.

Medicare Part B

A government supported health insurance plan that covers doctors' services, outpatient hospital care, medical equipment, physical and occupational therapy and some home health care for qualified Americans age 65 and older and certain younger individuals with disabilities. Most people pay an annual deductible and a monthly premium for this health plan.

Medicare Part C (also called Medicare Advantage Plan)

A Medicare program that gives you more choices among health plans and extends benefits beyond the Original Medicare Plan. It includes private Medicare Advantage plans (such as HMOs and PPOs) that provide Part A and B benefits to enrollees, as well as Medicare prescription drug benefits beginning in 2006. Nearly everyone with Medicare Parts A and B is eligible for a Medicare Advantage plan. Medicare Advantage plans previously were called Medicare+Choice plans.

Medicare Part D

A government supported health insurance plan that helps cover prescription drug costs for qualified individuals who are entitled to Medicare Part A and/or B. Beginning January 1, 2006, private health insurance companies have offered these plans to Medicare recipients.

Medicare Prescription Drug Coverage

Sometimes called Medicare Part D coverage, a plan of benefits provided under the Medicare program that contributes to the cost of prescription drugs.

Medigap

Insurance that supplements the reimbursement provided by Medicare for medical services. Medigap plans often pay for certain classes of services not covered by traditional Medicare coverage, and may also pay for co-insurance or other amounts seniors are required to contribute to their Medicare coverage.

National Committee for Quality Assurance (NCQA)

NCQA is an independent, not-for-profit organization that evaluates managed care plans. The NCQA accreditation process is nationally recognized and evaluates how well a health plan manages all aspects of its system and the extent to which it helps to continuously improve health care for individuals. Consider looking into health plan accreditation status by visiting www.ncqa.org.

Necessary, Medically Necessary, Medically Necessary Services or Medical Necessity

Medical services or supplies that are appropriate and effective for the treatment of an illness or injury in accordance with clinical research findings or accepted medical standards, as described in the covered benefits section of individual plan documents. Health benefits plans typically pay only for services and supplies that are medically necessary.

Network

Also called "provider network." A panel of physicians, hospitals and other health care professionals who contract with a health benefits plan to provide services, typically at a negotiated rate of payment. With certain plans, an individual must access care from a network provider in order to receive the maximum level of benefits.

Non-participating Provider

This term is generally used to mean physicians, hospitals and other health care professionals who have not contracted with a health plan to provide services. Also called "non-preferred provider."

Open Access

See Direct Access

Open Enrollment

A time, often in the fall, when employees choose their health plans for the following year. You typically have 30-day period to decide.

Original Medicare Plan

See Medicare Part A and Medicare Part B.

Out-of-Network

Refers to care you receive from doctors and other health care professionals who do not participate in a health plan's network.

Out-of-Pocket

Amounts such as copayments and deductibles that an individual is required to contribute toward the cost of health services covered by his or her health benefits plan. In some instances this term also includes amounts the individual pays for health services not covered by the plan. There are substantial differences between plans in the amount of out-of-pocket costs you may incur. If your benefits plan has high out-of-pocket costs, you might consider participating in a Flexible Spending Account or Health Savings Account, if one is available to you.

Out-of-Pocket Maximum

The limit on the amount an individual is required to pay for health care services covered by his or her benefits plan. Look for this information in insurance plan documents such as your Certificate of Coverage.

Outpatient Care

Care provided without overnight admission to a hospital or other medical facility.

Outpatient Surgery

Surgical procedures that do not require an overnight stay in a hospital or other medical facility. Such surgery can be performed in the hospital, a surgery center or physician's office.

Over-the-Counter (OTC) Drug

Medication that may be obtained without a prescription from a medical professional.

Participating Provider

A physician, hospital, nursing facility or other health care provider that has contracted with a health plan to provide covered services for a negotiated charge. Also called "preferred care provider."

Patient Protection and Affordable Care Act

The name of the new health care reform law passed by Congress in March 2010 and signed by President Obama.

Pension

A retirement fund for employees (usually tax exempt) paid for or contributed to by an employer as part of an employee's compensation package. Many employers are replacing pensions with 401(k) plans. Pension plans vary by employer so it's important to get details in writing, such as the contribution plan, choices for receiving benefits and an explanation about spousal rights to the pension.

Personal Health Record

A Personal Health Record (PHR) stores health-related information in a password-protected online record. In many cases information such as claims submitted to your health insurer, the location of your last doctors' visit and prescribed treatment is automatically added by your insurer. Depending upon the PHR, individuals may have the opportunity to input personal information like family history of disease, blood type, diet and exercise regimens and allergies. The Privacy Rule, part of the Health Insurance Portability and Accountability Act (HIPAA), regulates how health information that can be linked to an individual may be used.

Pharmacy and Therapeutics (P&T) Committee

A group of physicians, pharmacists and other health care professionals who advise a health plan regarding prescription drug formularies and the safe and effective use of medications.

Plan Documents

Plan documents describe the details of a health plan - what services are covered, what services are not covered, and what charges the patient will be required to pay (copayments, deductibles, coinsurance). "Plan documents" may include a group agreement, group policy, Certificate of Coverage, Certificate of Insurance or Evidence of Coverage. You should read the plan documents before deciding which health plan is right for you. You may obtain a copy of the plan documents through your employer or health plan.

Point-of-Service (POS)

A health benefits plan that provides coverage for care received from both participating providers and non-participating providers. In many POS plans, patients whose care is directed through referrals from their primary care physician (PCP) receive a higher level of benefits, while patients who go directly to other physicians or facilities receive a lower level of benefits.

Practice Guidelines

Also called "clinical practice guidelines," "practice parameters" or "medical protocols." These guidelines describe optimal approaches to diagnosis and treatment of specified illnesses or injuries based on current medical research.

Pre-existing Condition

A condition, disability or illness (physical or mental) that you had before you signed up for a health plan. Genetic information, without a diagnosis of a disease or a condition, cannot be treated as a pre-existing condition. (Note that the definition of this term differs by state.)

Pre-existing Condition Insurance Plan

A new program that grew out of health care reform provides health coverage for anyone who has been uninsured for at least six months, has a pre-existing medical condition, and has been denied coverage (or offered insurance without covering the pre-existing condition) by a private insurance company. This program will provide coverage until 2014, when access to affordable health insurance choices is available through an exchange.

Preauthorization/Precertification

Under some health plans, individuals are required to receive advance authorization of particular medical services. Such advance authorization is called “preauthorization” or “precertification.” Depending on the type of plan you have, your physician may request this authorization or you may be required to do so. Check your plan documents to see if there are any services that require preauthorization under your plan and, if so, who is responsible for requesting it.

Preferred Care Provider

See Participating Provider

Preferred Provider Organization (PPO)

A health benefits plan that allows an individual to choose any provider without designating a primary care physician (PCP), but offers higher levels of coverage to those who choose participating or preferred physicians or hospitals.

Premiums

The amount charged by a health insurer for a health insurance policy. If you have a health plan through your employer, you and your employer may share this cost. If you buy a health plan yourself, you pay the full amount.

Prescription Drugs

Medicine that requires a doctor's permission to buy. These drugs are different from over-the-counter drugs, which you can buy without a prescription.

Preventive Care

Programs or services that can help maintain good health (such as annual physical exams or immunizations) or are meant to detect early signs of disease (such as mammograms and colon cancer screenings). Check to see that these are covered under your health plan.

Primary Care Physician/Primary Care Provider (PCP)

A physician who is part of a health plan's network and serves as a patient's main point of contact for medical care. A PCP typically provides basic medical and coordinates and supervises other care received by the patient. A PCP is usually a general or family care practitioner, or in some cases, an internist, pediatrician or OB/GYN. PCPs provide patients with referrals for specialist care or other medical services. In some health plans, you must choose a PCP to coordinate your care.

Private Fee-for-Service Plan

A type of Medicare Advantage Plan through a private insurance company that charges a premium to let Medicare recipients go to any Medicare-approved doctor or hospital that accepts the plan's payment. The private company, rather than the Medicare program, decides how much it will pay and how much you pay for the services you get. This type of plan may offer extra benefits the Original Medicare Plan doesn't cover.

Provider

A licensed health care facility, program, agency, physician or other health professional that delivers health care services.

Provider Network

See Network

Qualified Medical Expense(s)

Federal tax law defines a "qualified medical expense" is for purposes of FSA, HRA, HSA and MSA spending. Expenditures from an FSA or HRA must be a qualified medical expense under this definition. HSA funds may be withdrawn for other purposes, but such withdrawals are taxable and may be subject to an additional tax penalty. The Federal definition, which is contained in Section 213(d) of the Internal Revenue Code, is relatively broad, including all services covered under most health benefits plans as well as certain services and supplies (such as eyeglasses) that generally are not covered by health plans. Complete details can be found in IRS Publication 502.

Reasonable Charge

A limit set by a health plan on the amount it will pay for a medical service. This limit is often determined by reference to amounts typically charged for a particular health care service by other providers in the same geographic area, although some plans may refer to other payment standards (such as the amount paid by Medicare). Also called "usual, customary and reasonable (UCR)" or "customary and reasonable."

Referral

In some health plans, you must receive a referral from your primary care doctor to see a specialist or receive certain health care services. A referral is a specific set of directions or instructions from your doctor. A referral may be written or electronic.

Reimbursement

Payment from a health benefits plan to reimburse an individual's covered medical expenses or directly to a health care professional in payment for services rendered to plan participants.

Retiree Reimbursement Account (RRA)

Retiree Reimbursement Accounts (RRA) are health reimbursement arrangements designed to be used in retirement to pay for insurance premiums and/or qualified medical expenses. Contributions to an RRA are made by an employer. Balances rollover from year to year in accordance with rules established by the employer. Funds in an RRA may be used to pay for unreimbursed medical expenses as well as health premiums, including Medicare Part B and Medigap policies. Reimbursements from an RRA are not considered taxable income to the retiree.

Rollover Feature

The ability to carry forward or "roll over" any remaining balance in a health fund to use for covered medical services in subsequent years.

Second Opinion

Visiting another physician or surgeon for an opinion regarding a diagnosis, course of treatment or specific types of elective surgery. Second opinions are generally voluntary, but may be required in certain instances under some health plans.

Section 213(d)

Section 213(d) of the Internal Revenue Code outlines what a "qualified medical expense" is for purposes of FSA, HRA, HSA and MSA spending. Expenditures from an FSA or HRA must be a qualified medical expense under this code section. HSA funds may be withdrawn for other purposes, but such withdrawals are taxable and may be subject to an additional tax penalty.

Self-Insured

Also called "self-funded." An employer who takes on the financial responsibility for paying the health benefits claims of its employees is said to be "self-insured" (versus a "fully insured" employer, who pays a health insurance company to take on financial responsibility for claims). Self-insured plans can be administered by the employer or an outside company.

Service Area

The geographic area in which a health plan is licensed to operate (where applicable) or, when licensing is not required, the geographic area where an adequate network is established to provide services covered under a benefits plan.

Social Security Retirement Benefits

A government supported retirement benefit program funded through a federal income tax and paid to Americans based on age, number of years worked and income earned over an individual's career. Higher lifetime earnings result in higher benefits, while time off and lower income years may result in lower benefit payments. Age 62 is the earliest possible retirement age for Social Security benefits, and full retirement age is determined by year of birth. Choosing to collect retirement benefits before you reach full retirement age results in permanently reduced benefits.

Specialist

A physician who provides medical care in a medical or surgical specialty or subspecialty (for example, dermatologist, oncologist, etc.).

Subscriber

The individual covered under an employer's group agreement or group insurance policy. If an employer makes family coverage available, the subscriber may enroll eligible dependents in the benefits plan.

Traditional Plan

See Fee for Service

Uncovered Services

Also "exclusions." Specific conditions or circumstances that are not covered for benefits under a health plan. These are listed in detail in the plan documents, and sometimes more generally in marketing or other plan materials. Check uncovered services/exclusions carefully before enrolling in a plan. Ask the plan or your employer for a copy of the plan document.

Urgent Care

Services received for an unexpected illness or injury that is not life threatening but requires immediate outpatient medical care that cannot be postponed. An urgent situation requires prompt medical attention to avoid complications and unnecessary suffering or severe pain.

Usual, Customary, Reasonable (UCR)

See Customary and Reasonable

Well Baby/Well Child Care

Routine care for generally healthy children up through age eight, including checkups, tests and immunizations.

Wellness Program

A health management program that incorporates disease prevention, medical self-care, and health promotion. Wellness programs focus on changing and/or reinforcing healthy lifestyle behaviors that can help prevent illness and disability.