Employee Benefits – Common Terms

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Accidental death and dismemberment (AD&D) insurance

Coverage for death or loss of a body part or function due to an accident.

 

Actively at work

The employee is present on the job, or otherwise meets the plan’s requirements for being actively at work (such as, on a holiday, was actively at work on the last regularly-scheduled day).

 

Activities of daily living (ADLs)

Activities such as dressing, feeding, and toileting, that a participant needs to perform for self-care. ADLs may help determine a participant’s eligibility for benefits under a long-term care plan.

 

Age reduction schedule

Under disability plans, the schedule showing when benefits stop or are reduced when the employee reaches a particular age, or combination of age and number of years disabled.

 

Allowable amount

The part of a provider’s charge that is eligible for reimbursement (full or partial) by a plan.

 

Alternative care or alternative treatment

Under some mental health and chemical dependency programs, alternative care is more intensive than out­patient treatment and less intensive than inpatient treatment. Examples may include partial hospitalization, residential treatment or care in a half-way house or group home.

 

Ambulance

A vehicle that transports patients with acute medical conditions and provides paramedic and stabilizing medi­cal services.

 

Ambulatory care facility

A facility providing outpatient services.

 

Anesthesia

Local anesthesia involves administering agents to achieve the loss of conscious pain in a specific part of the body. General anesthesia involves administering agents to render the patient completely unconscious and without conscious pain response

 

Anesthetic

A drug that produces loss of feeling.

 

Annual enrollment

The period of time a company designates each year in which an employee may make changes in enrollment for certain benefits.

 

Assisted living facility

Shared, supervised residence for those who cannot live independently.

 

Attained age

A person’s age at his or her latest birthday.

 

Balance billing

The practice of charging full fees (over the covered amounts) and then billing the patient for the part of the bill (the balance) that the plan does not cover.

 

Bargaining contract

A contract under which all parties set the terms and conditions of the contract.

 

Beneficiary

A person named by the participant to receive insurance or retirement plan benefits when the participant dies. Also, anyone who may receive benefits under an employee benefit plan.

 

Benefit duration period

A disability benefit plan may have a maximum length of time that benefits will be payable. The benefit dura­tion period begins when the person has become disabled as defined under the plan and has met any waiting period, and ends when the maximum length of time to receive benefits is reached.

 

Benefit package

All the benefits offered by an employee benefit plan.

 

Bereavement leave

Time taken off work due to a death.

 

Birthday rule

In plans that follow the birthday rule, if two spouses are each covered by their own employer-provided health care plans, the plan covering the parent whose birthday falls first in the calendar year pays benefits first (is the “primary plan”) regardless of which parent is older. If both parents have the same birthday, the plan that has covered the person the longest pays first.

 

Birthing center

Some medical plans cover births at a birthing center, which provides prenatal, delivery and postpartum care, is staffed by certified nurse-midwives, and meets the plan’s requirements as well as accreditation and state licensing.

 

Brand name drug

A drug that is patented and produced by only one manufacturer.

 

Break in service

An interruption in employment that affects the employee’s benefits.  

 

Business travel accident insurance

Coverage for an accident that occurs while traveling on company business.

 

Cafeteria plan

An employee benefit plan that gives employees a choice among cash and one or more qualified benefits, such as health insurance, group term life and dental benefits.

 

Calendar year deductible

The deductible that applies for a plan that counts the deductible based on a calendar year.

 

Carryover deductible

A deductible that applies when a participant is eligible for continuation coverage under COBRA due to a “qualifying event” such as divorce or termination of employment. The carryover deductible is the deductible payable under the COBRA continuation coverage and that includes the part of the deductible satisfied before the qualifying event.

 

Chemical dependency

Both alcoholism and drug dependency as classified by the International Classification of Diseases of the U.S. Department of Health and Human Services.

 

Chemotherapy

Treatment of internal disease (primarily cancer) by drugs.

 

Childbirth

The act of giving birth to a child.

 

Chiropractic care or services

Services provided by a chiropractor under a system of medicine based on the theory that disease is caused by malfunction of the nervous system, and that normal function can be restored by manipulation and other treat­ment.

 

Chiropractor

A Doctor of Chiropractic (D.C.) who performs chiropractic services.

 

Claim

For health care plans, a statement of services rendered by a health care provider for a given patient. The claim is submitted to the plan for payment.

 

Claim form

The form used to file for benefits under a health plan.

 

Claimant

The person who files a claim for benefits.

 

Claims administrator

The company that reviews plan claims and determines whether to pay them.

 

Claims procedure

The procedure under the Employee Retirement Income Security Act of 1974, as amended (ERISA) for filing claims under a qualified plan, and for requesting an appeal of denied claims.

 

Coinsurance

A cost-sharing method by which a health insurance plan pays a percentage of the provider’s covered expense (often after a deductible is met) and the participant pays the rest. For example, the plan may pay _0% and the participant may pay _0%. In this case, the _0% is the participant’s coinsurance.

 

Collective bargaining agreement or contract

A formal agreement over wages, hours and other conditions of employment entered into between an employer and one or more employee unions.

 

Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (COBRA)

Federal legislation that governs the offer of temporary continued benefit coverage to participants who other­wise would lose coverage for certain reasons, such as termination of employment.

 

Consumer-Driven Healthcare (CDH)

Consumer-driven healthcare is characterized by accounts which participants use to fund everyday medical expenses not covered by their health care plan. With direct access to dollars to manage and spend on health care, employees learn to shop around and spend their money in a cost-conscious manner. These accounts are coupled with high deductible health plans that provide coverage for more serious medical problems. Consumer driven healthcare also includes the use of online and other information resources, such as calculators and modeling tools, so participants can get the information they need to make health care decisions.

 

Contingent beneficiary

The person named to receive death benefits only if no primary beneficiaries are living when the insured person dies.

 

Conversion privileges

A privilege given to a participant to convert group insurance to an individual insurance policy, without evi­dence of insurability, upon termination of employment.

 

Coordination of benefits (COB)

A provision under a group health plan that clarifies the order in which plans will pay if a given person has coverage under more than one plan.

 

Copayment

A flat dollar amount that a participant pays for a certain medical service (such as an office visit) as the partici­pant’s share of the cost. Copayments may apply in addition to deductibles and coinsurance.

 

Cost of living adjustment (COLA)

An across-the-board change in wages or pension benefits to reflect the rise or fall in the cost of living as mea­sured by an index such as the Consumer Price Index (CPI).

 

Covered dependent

A person other than the employee who is covered under an employee’s health care plan.

 

Covered expense

An expense that meets all the rules to be covered by a plan.

 

Covered person

A person who is covered under a plan.

 

Covered provider

A service provider eligible to provide covered services and receive payment under a plan.

 

Critical care

Health care provided to acutely ill patients during a medical crisis, such as in an intensive care unit or coronary care unit.

 

Daily benefit

The maximum amount of money a participant will be paid for each day covered services are received.

 

Death benefit

The payment made to beneficiaries upon the death of the participant.

 

Debit card

Many HRAs and HSAs provide participants with a debit card to access the account funds when paying for services. When a participant receives a health care service and presents the card, the card debits the payment from the account. Participants can usually review these card payments online or on paper to keep track of their expenses.

 

Deductible

The amount of eligible expenses the participant may be required to pay each year before the plan begins to pay benefits for covered expenses.

 

Deductible carryover

A feature under some health care plans where covered charges incurred near the end of a year (such as in the last three months) may be carried over to be counted toward the next year’s deductible.

 

Defined benefit plan

A plan that is not an “individual account plan” under the law. A defined benefit plan has a definite formula by which the employee’s benefits will be determined. In plans of this type, employer contributions are deter­mined by actuaries.

 

Defined contribution plan (individual account plan)

A plan that provides for an individual account for each participant and for benefits to be the sum of amounts contributed to the employee’s account, plus any investment return or forfeitures allocated to that account.

 

Dental hygienist

A person trained and licensed to remove deposits from teeth, and to provide other services under the direction of a dentist.

 

Dental plan

A plan designed to help participants with the cost of covered dental services.

 

Dental services due to accident

Dental services performed due to an accident that injures teeth or their structures.

 

Dentist

A person licensed to practice dentistry. The term may also mean a physician who is authorized to perform a given dental service.

 

Denture

A device to replace missing teeth.

 

Department of Labor (DOL)

The department that administers the administrative and regulatory portions of ERISA.

 

Dependent care flexible spending account (dependent care FSA)

An employer plan that allows employees to set aside before-tax contributions from their paychecks to pay the cost of care for eligible dependents.

 

Dependent life insurance

Insurance covering the life of an eligible dependent, such as a spouse or child.

 

Direct Settlement Provider

An international (non-US) provider that will accept direct payment from a global insurance carrier, eliminating the members need to pay for the claim up front and then submit for reimbursement.  Please also see Guarantee of Payment (GOP).

 

Disability

A condition that makes an employee incapable of performing some or all of the duties of his or her job. Plan definitions of disability vary.

 

Disability insurance

Insurance against income lost due to the participant becoming disabled as defined by the plan.

 

Dismemberment

The loss or loss of use of, a limb or function such as vision.

 

Domestic partner, domestic partnership dependent

A person who is unrelated to the employee by blood or marriage and is not legally married to the employee. Plans that provide coverage for domestic partners generally require certification of the partner.

 

Drug Utilization Review (DUR)

A system that reviews prescriptions to identify potential interactions with other drugs, and proposes alterna­tive treatments.

 

Durable medical equipment

Medical supplies that are not disposable such as wheelchairs, home hospital beds and kidney dialysis equip­ment.

 

Effective date

The date coverage or plan participation begins.

 

Eligibility period

The period of time that eligible participants can enroll in, without providing evidence of insurability.

 

Eligible dependent

A person other than the employee who is eligible to be covered under an employee’s plan.

 

Eligible employee

An employee who is eligible to be covered under a plan.

 

Elimination period (waiting period)

The period of time an eligible participant must complete before being eligible to be covered under a plan. For a disability benefit, this is the period of time the person must be disabled as defined by the plan before disability benefits begin.

 

Emergency care

Care in an emergency as defined under a health care plan. The plan’s rules for preauthorizing care or for using network providers may be less strict in an emergency. Characteristics of an emergency often include sudden onset and symptoms severe enough that the lack of immediate attention could seriously harm the patient or cause severe pain. Mental health and chemical dependency plans often include potential harm to the patient or others in the definition of an emergency.

 

Emergency medical evacuation

Emergency removal of a patient from one place to another for treatment (such as by helicopter) when either the patient’s condition or the patient’s location or situation do not permit timely transport by ambulance.

 

Emergency room

A hospital area equipped and staffed for the prompt treatment of acute illness, trauma, and other medical emergencies.

 

Employee Assistance Plan (EAP)

An employment-based plan designed to help employees cope with issues such as work/life balance, stress, family violence and grief. The plan may offer employees counseling assistance by telephone, and may also cover follow-up visits with counselors if needed.

 

Employee contribution

This is the amount an employee contributes toward an HSA. (Employees are not permitted to contribute to an HRA).

 

Employee coverage

Coverage that protects the employee only.

 

Employer contribution

The amount an employer contributes toward an employee’s HSA or HRA.

 

End stage renal disease

The stage of kidney dysfunction that is nearly always permanent, in which the patient needs dialysis or a kid­ney transplant to survive.

 

Endodontic therapy (root canal)

Treatment of a tooth with damaged pulp. This may involve removing the pulp, sterilizing the pulp chamber and root canals, and filling those spaces.

 

Euthanasia

Painless putting to death or allowing to die, typically of a pet.

 

Explanation of Benefits (EOB)

This is a standard benefit statement issued by most US based insurance companies.  This statement outlines how your plan has paid a specific claim and may also outline any potential additional funds owed by the member.  This statement will also outline an accumulation of your benefits covered throughout your policy period (traditionally a 12 month period).

 

Evidence of insurability (EOI)

Proof of health, employment or other factor required before beginning or increasing insurance amounts.

 

Exclusion

Something that is specifically not covered under a plan.

 

Experimental or investigative treatment, drug or device

Services and supplies not commonly approved by applicable government agencies, and not commonly accepted as standard practice at the time the service is given.

 

Extended care facility

An institution other than a hospital that provides inpatient medical services. Such a facility provides medical treatment and is not primarily for custodial care.

 

Expatriate

This is an employee working outside of their home country or native country.  For purposes of the insurance industry, this is usually used in reference to US Expatriates, however the term Expatriate truly can be defined as any employee working outside of their native country.

 

Eye exams

Examinations to diagnose vision problems and determine a corrective prescription. May also include health screening for conditions such as glaucoma.

 

Eyeglasses

Lenses in frames for vision correction.

 

Family coverage

Health coverage that covers the employee and other family members.

 

Family deductible

A deductible met by the combined expenses of all covered family members.

 

Family Medical Leave Act of 1993 (FMLA)

An act that requires companies with more than 50 employees to provide up to __ weeks of unpaid, job-pro­tected leave for eligible employees who meet the service requirements and request leave for birth, adoption, foster care placement, and illness of the employee or a family member.

 

Fertility programs

Treatment designed to increase the ability to conceive a baby, or to induce conception.

 

First dollar coverage

This is insurance coverage that pays the entire covered amount without requiring a deductible to be satisfied first. The high deductible health plans used as part of consumer-driven healthcare generally do not offer first dollar coverage, although some plans may provide it for preventive care services.

 

Fiscal year

A corporation’s accounting year, which may or may not be a calendar year?

 

Flexible benefit plan

A plan under Section __5 of the Internal Revenue Code that gives employees a choice between taxable benefits, including cash, and nontaxable benefit programs. Employees typically have say in the election of benefits, and may be able to add employee contributions for increased benefits.

 

Flexible spending account (FSA)

An account set up under an employer plan that allows employees to set aside pre-tax dollars from their pay­checks to pay eligible expenses. There are two forms of flexible spending accounts: health care and dependent care.

 

Fluoride

A fluoride solution applied to teeth to prevent dental decay.

 

Formulary

A list of prescription drugs that are approved for use in specific treatments and dispensed through network pharmacies to plan members. Plans may charge more for drugs not on the formulary, or may not cover them at all.

 

Generic drug

A drug that does not have the trademark of the original manufacturer. It is chemically identical to and gener­ally costs less than its brand name counterpart.

 

Grandfathered provisions

When a company changes a benefit plan, participants who were active participants in the plan before the change may remain covered under some provisions of the old plan, or may be given an option between the old provisions and the new provisions. The provisions of the old plan that carry forward for such participants are grandfathered provisions.

 

Group universal life plan (GULP)

Group life insurance that combines two features: death benefit protection for named beneficiaries through term insurance, and an investment element that can create permanent insurance or accumulate money tax-deferred. Participation is voluntary and the employee pays the full cost.

 

Guarantee of Payment (GOP)

This is a term in reference to an international employee benefits program.  When an international carrier will issue a document to the international carrier (non-US) guaranteeing that they will pay the invoice on behalf of the patient.  This prevents the member from having to pay for the claim up front and then submit for reimbursement. This is a core value proposition of an international carrier.  Please also see Direct Settlement.

 

Guaranteed issue amount

The amount of life insurance an individual can purchase for which no medical examination or health history is required.

 

Health care flexible spending account (health care FSA)

An account an employee may establish to set aside before-tax contributions from each paycheck to pay eligible health care expenses.

 

Health Insurance Portability and Accountability Act of 1996 (HIPAA)

Legislation that improves the availability of health insurance by restricting preexisting limitation clauses for those who change jobs, providing special enrollment rights to employees, and requiring data privacy and secu­rity of personal health information.

 

Health Maintenance Organization (HMO)

A network of hospitals, doctors and other medical providers who provide services through an HMO plan.

 

Health Reimbursement Arrangement (HRA)

An HRA is a fund that an employer sets up for its employees, which is used to reimburse employees for eli­gible healthcare expenses not covered by the employer’s health plan. HRAs may be designed to cover any or all of the following expenses: coinsurance, copayments, deductibles, dental and vision charges, and premiums for health and long term care insurance coverage. Funds may also be rolled over from one year to the next, depending on plan design.

 

Health Savings Account (HSA)

An HSA is a personal account that an individual can establish to reimburse the individual for eligible health care expenses not covered by his or her health plan. Those expenses that can be reimbursed are those consid­ered “qualified” by the IRS and include: coinsurance, copayments, deductibles, dental and vision charges. An individual must be enrolled in a high deductible health plan in order to establish an HSA. Once the individual’s expenses meet the plan deductible, the remaining eligible expenses are covered by the high deductible health plan according to its rules.

Employees and employers may contribute to the HSA. Funds that are not spent in any year can roll over to subsequent years and allow the participant to save for future expenses.

 

Hearing therapy/hearing aides

Treatment or equipment to improve hearing.

 

High Deductible Health Plan (HDHP)

A plan with a large deductible, typically at least $2,000. They are designed to treat extraordinary medical expenses and not everyday expenses. An individual must be enrolled in a high deductible health plan in order to establish an HSA.

 

Highly compensated employee (HCE)

An employee who earns more than a specific dollar amount established by the IRS. This dollar amount is adjusted from time to time for cost of living changes.

 

Home health care

Some medical plans cover home health care that meets certain requirements. For example, such care may require precertification, a written treatment plan, and may require care to be provided by persons meeting certain requirements.

 

Hospice

An organization licensed by the state to care for terminally ill patients.

 

Hospital

An organization licensed by the state to provide inpatient and outpatient care for diagnosis and treatment of illness and injury. It is not primarily for rest or custodial care.

 

Immunizations

The process of making a person immune to a disease, generally by injection.

 

Indemnity plans

Group health insurance plans that generally allow the patient to use any covered provider for plan services. Generally, the participant pays the full cost of services until a deductible is met, then the participant and the plan share the costs.

 

Individual deductible

The deductible that must be met by an individual participant.

 

Individual underwriting

A process of determining an applicant’s individual eligibility for insurance. This differs from group underwrit­ing, where newly eligible plan participants generally are not reviewed on an individual basis for insurability.

 

In-network

When the participants choose to receive care from providers who participate in a network under the plan, this is considered receiving care “in-network.” Some plans have a “gatekeeper” who must authorize all care to have that care covered at in-network levels under the plan.

 

Inpatient

A patient confined in a hospital or other health care facility as a registered bed patient for the number of hours defined by the plan, and who incurs room and board charges.

 

Inpatient care

Care received while an inpatient.

 

Inpatient facility

A facility (such as a hospital) that provides inpatient care.

 

Inpatient surgery

Surgery performed while a person is an inpatient in a hospital (a registered bed patient incurring room and board charges).

 

Intermediate care

For a long-term care program, the level of care that lies between the skilled care that would be provided in a hospital or skilled nursing facility, and purely custodial care.

 

Intermittent leave

A form of leave under the Family Medical Leave Act taken in separate blocks of time (not as one continuous leave of absence).

 

International Carriers

These are carriers that specialize in international employee benefits. They have a value proposition and service models that tend to address some of the core pain points within a globally mobile employee population.

 

Key Local Employees/Nationals

This is a local hire that is considered a key employee in the geography.  Many times employers want to offer their key locals a higher level of benefit and enroll them in the same plan as the Expatriates or Third Country National employees.  Most insurance carriers will honor this request, as long as the Key Locals do not represent more than 10% of the overall population.  This can differ from carrier to carrier and can change on a case by cases basis given compliance concerns.

 

Kidney disease, end-stage

Failure of the kidneys. A person with end-stage kidney disease qualifies for Medicare before reaching the usual Medicare eligibility age of 65. A Medicare-eligible participant should review how Medicare works with any employer-sponsored health care coverage.

 

Lawful spouse

A person recognized as the lawful husband or lawful wife of an active employee under the laws of the state or jurisdiction where the employee lives.

 

Liability insurance

Insurance that pays benefits to an injured party on behalf of a covered party that is legally responsible for the harm to that person or property.

 

Lifetime maximum

The most a plan will pay in benefits for a covered person.

 

Limit

A minimum, maximum, or other limitation.

 

Living needs benefits or living benefits

A life insurance plan may give policyholders access to part or all of their insurance benefit while still living, such as if they become terminally ill.

 

Local National

An employee that is a local hire.  An example would be an American company that has operations in China, but the American company hired local Chinese citizens to work locally.  This would be a local national.

 

Long-term care

Services needed by people with chronic health conditions.

 

Long-term care insurance

Coverage to pay part or all of long-term care costs.

 

Long-term disability

A significant period of disability as defined by a long-term disability plan.

 

Long-term disability (LTD) plan

A plan designed to provide disability benefits to an employee after the employee meets the plan’s disability requirements and waiting period, until the employee is no longer disabled or reaches the age limit for benefits.

 

Loss of a body part or function

A loss as defined by an accident plan. For example, for the plan to pay upon “loss of a hand,” the plan may require that the hand be completely severed at or above the wrist joint.

 

Mail-order drug program

Filling of prescriptions by mail through a mail-order pharmacy. Plans often offer substantial savings for mail-order prescriptions, especially for long-term therapy such as blood pressure medication.

 

Managed care

Health care cost containment through coordination of care through primary providers, use of provider net­works, utilization review, preauthorization of services, and other means.

 

Maternity care

Maternity care may include prenatal care (exams during pregnancy), childbirth, certain routine nursery care for a newborn, and postpartum care.

 

Maximum annual benefit

The maximum dollar amount of benefits a plan will pay for a given person in a year.

 

Maximum lifetime benefit

The maximum dollar amount of benefits that will be paid for a given person under a plan.

 

Medical certification

The documentation that may be required when an employee requests a leave under the Family Medical Leave Act for medical reasons.

 

Medically necessary

Care that meets the plan’s requirements of medical necessity. The definition often includes that the care must be appropriate, based on recognized standards of care, and not experimental or investigational.

 

Medicare

A federal plan administered by the Social Security Administration to pay certain medical expenses for those who qualify.

 

Mental health and chemical dependency professionals

Caregivers with the education, certification, and licensing required by the mental health and chemical depen­dency plan.

 

Mental illness

A condition meeting the plan’s definition of mental illness. This may include reference to the International Classification of Diseases by the U.S. Department of Health and Human Services, or to generally accepted stan­dards.

 

Morbid obesity

Obesity that has become a direct and immediate threat to a person’s life.

 

Negotiated fees

The fees negotiated between a network and its providers. Generally, the providers agree to accept fees lower than those typically charged by doctors and hospitals.

 

Network

A group of providers in a given area who contract with a health care plan to provide care at discounted rates.

 

Non-formulary

Drugs that do not appear on the plan’s formulary list.

 

Normal retirement age

Under a retirement plan, the normal age for full benefits to begin. Since full Social Security benefits are cur­rently available at age 65 for most retirees, although it will gradually rise to age 67 in _0_7, age 65 is often the normal retirement age.

 

Normal retirement date

Under a retirement plan, the normal date for full benefits to begin. It may be based on a number of years of age or a combination of age and service.

 

Notice period

The lead time a company requests before a leave under the Family Medical Leave Act can begin.

 

Nursing home

A licensed facility that provides skilled nursing care but does not meet Medicare’s definition of a “skilled nurs­ing facility.”

 

Nutritional counseling

Some medical plans cover nutrition education and planning for a duly certified nutritionist to help manage a newly diagnosed or newly deteriorating medical condition such as diabetes that may be partially controlled by diet. Such counseling is generally not covered for general health or wellness, or weight loss or gain objectives that are not associated with a diagnosed illness.

 

Occupational illness or injury

Health problems caused by work or work conditions.

 

Occupational therapy

Treatment after illness or injury to increase a patient’s use of fine motor skills needed in daily living.

 

Office visit

A personal visit between a physician and a patient in an office or hospital.

 

Open enrollment

The period of time a company designates each year in which an employee may make changes in enrollment for certain benefits.

 

Organ donation

The donation of an organ or bone marrow from a living or dead person. Costs for the donor and the recipient may or may not be covered under a medical plan. Such services generally require preauthorization, and may need to be performed at a special center, sometimes called a Center of Excellence.

 

Orthodontics, orthodontia

Dentistry to detect, prevent, and correct abnormalities of the position of teeth (straightening teeth).

 

Orthotics

Medical equipment designed to support a weak or nonfunctioning body part.

 

Other coverage

To establish an HSA, participants cannot have “other coverage” such as being covered under a spouses plan, or other individual coverage. The only coverage they can have is under a high deductible health plan (HDHP).However, a participant can be covered under dental, vision or long term care coverage, or coverage that pays a fixed dollar amount for a disease or for a period of hospitalization, and still establish an HSA; these items are not considered “other coverage.”

 

Out-of-area benefits

For health care plans featuring in-network and out-of-network benefit levels, the out-of-area benefits are those available to participants living outside the network’s service area.

 

Out-of-network care

Care provided by a health care provider who does not participate in a health care company’s network.

 

Out-of-network provider

A health care provider that does not participate in a health care provider’s network.

 

Out-of-pocket maximum

A participant out-of-pocket cost under a health insurance plan refers to those costs for which an employee is not reimbursed through the insurance. Generally, this includes the deductible, copayments, coinsurance amounts and costs that exceed the plans reasonable and customary charges. Health insurance plans have a cap, referred to as the out-of-pocket maximum, which limits the amount of out-of-pocket expenses that a participant has to pay each year. High deductible health plans that work with an HSA are subject to specific out of pocket limits: $5,950 for employee coverage and $__,900 for family coverage in _010 (limits may change annually).

 

Outpatient

A patient who is treated in a hospital or other health care facility for fewer than the number of hours defined by the plan for an inpatient, and who does not incur room and board charges.

 

Outpatient care

Care provided to an outpatient (not overnight care).

 

Outpatient diagnostic services/treatment

Care to diagnose injury or disease provided to an outpatient.

 

Outpatient facility

A treatment or diagnosis facility that is licensed and staffed but does not provide overnight inpatient care. Examples include laboratories, outpatient surgical centers, birthing centers, urgent care facilities and outpa­tient rehabilitation facilities.

 

Outpatient surgery

Surgery performed on an outpatient.

 

Overbite

The vertical overlap of the upper teeth over the lower teeth.

 

Overjet

The horizontal overlap of the upper teeth over the lower teeth.

 

Partial disability

A disability that prevents a person from performing some of the functions of his or her regular job.

 

Participating pharmacy

A pharmacy participating in the plan’s network.

 

Pedodontics

Dentistry for children.

 

Periodontics

Dentistry dealing with the periodontium.

 

Periodontium

The bone and tissues supporting the teeth.

 

Permanently and totally disabled

Disabled as defined by a plan in a manner that is expected to continue for life.

 

Personal leave

Time off from work for personal reasons.

 

Physical therapy

Treatment after illness or injury to increase a patient’s use of large-muscle motor skills needed in daily living.

 

Physician

A doctor licensed by a state to practice medicine. Some plans cover the services of providers who are not phy­sicians.

 

Podiatry

Care of the foot.

 

Point-of-service (POS) plan

A type of medical plan that generally provides a higher level of coverage, and may require less paperwork, when the participant coordinates care through his or her primary care physician (PCP).

 

Portability

The ability to keep a benefit policy in force after termination of employment, or to retain a vested retirement plan benefit.

 

Precertification

The process by which a medical plan participant seeks advance review of certain types of care and learns what benefits the plan would pay. Some plans require precertification for certain types of care, such as surgeries. Such plans may limit coverage, or even deny benefits, if this precertification is not obtained.

 

Predetermination limit

Some dental plans suggest that the participant and the dentist file a “predetermination of benefits” for planned dental care expected to cost more than a certain amount. The suggested amount is the predetermination limit. This tells the participant in advance how much the plan will cover, and advises the patient of alternative forms of treatment.

 

Predetermination of benefits

A participant and a dentist file a “predetermination of benefits” for planned dental care expected to cost more than a certain amount. The suggested amount is the predetermination limit. This tells the participant in advance how much the plan will cover, and advises the patient of alternative forms of treatment.

 

Pre-existing conditions

Conditions that existed before the participant’s coverage began. Some plans do not pay benefits for pre-exist­ing conditions.

Preferred provider

A provider who has a contract with the plan to participate in the network. The contract includes provisions to accept the reasonable and customary charge or allowable amount for a given service as the full fee.

 

Preferred provider organization (PPO)

A network of medical care providers who have agreed to provide services at negotiated rates and have a con­tract with the plan.

 

Preferred provider organization (PPO) plan

A type of medical plan that features a network of preferred providers. When you elect to receive care from pro­viders in the network, the plan generally provides a higher level of coverage, and may require less paperwork.

 

Prenatal and early parenthood education

Education about pregnancy and parenting a young child.

 

Prescription drugs

Drugs dispensed by written direction of an authorized person.

 

Preventive care

Care that is intended to prevent the onset of a condition rather than treat an existing condition, such as routine health checkups, routine well child care, and immunizations. If a high deductible health plan is used with an HSA and covers preventive care, the IRS permits the plan to cover preventive care services before the partici­pant meets the deductible.

 

Preventive dental services

Care to maintain oral health. May include examinations, cleaning, and bitewing x-rays.

 

Primary beneficiary

A person named by the participant to receive insurance or retirement plan benefits when the participant dies. If no primary beneficiaries are living when the insured person dies, benefits will be paid to the contingent beneficiary.

 

Primary care physician (PCP)

Some plans require a participant to name a primary care physician? Usually a family doctor, internist or pediatrician? To coordinate all medical care. The PCP manages the participant’s health care by serving as a main caregiver, and when necessary by referring the participant to another network provider for care. Some plans allow women to name one primary care physician for most care as well as an Ob/Gyn.

 

Private duty nursing

Services provided in the patient’s home by a private duty nurse who is licensed and certificated.

 

Probate

Presentation of a person’s will to a court, and appointment of an executor or administrator to carry out the court’s instructions. In other words, the process of settling a person’s estate after death.

 

Prophylaxis

Cleaning of teeth by a dentist or dental hygienist to remove tartar and stains.

 

Prosthesis

For medical plans, a device designed to partially compensate for the loss of a body part, such as an artificial arm, leg, eye, or portion of an internal bodily organ. For dental plans, an artificial replacement of one or more natural teeth or associated structures.

 

Prosthetics

An artificial substitute for a missing body part.

 

Prosthodontics

Appliances to restore oral function.

 

Qualified beneficiary

Participants who are eligible for group health plan continuation coverage under COBRA due to their participa­tion on the day before a qualifying event.

 

Qualifying event

An event that entitles a participant to continue, under COBRA (the Consolidated Omnibus Budget Reconcilia­tion Act of 1985, as amended), group health coverage that would otherwise end. Examples include termination or change of employment for the employee or spouse, annulment or divorce, or death of a covered employee.

 

Radiology

X-rays.

 

Reasonable and customary charge

The fee for a product or service that is usually charged most patients for a similar service performed by similar providers within a geographic area.

 

Reduced-hour leave

Some companies’ FMLA policy allows an employee to return to work from an FMLA leave on a part-time basis, or to take the FMLA leave as a reduction in the number of hours worked per day or per week.

 

Rehabilitation

Services such as those provided by a physical, speech or occupational therapist as part of recovery from injury or illness. This may also refer to long-term disability plans that continue some financial assistance while a per­son seeks rehabilitation.

 

Residential treatment

A type of care provided under some plans. Care is provided _4 hours a day, under the supervision of medical professionals, and is generally less intense than the care provided in a hospital.

 

Respite care

Short-term care provided in a patient’s home to give the primary caregiver time off, or short-term child care to provide a break for a parent.

 

Restoration

For dental plans, any inlay, crown, bridge, partial or complete denture to restore or replace teeth or tissue. The term applies to the end result of repairing and restoring structure and function.

 

Restorative services

For a dental plan, services to restore healthy teeth, such as fillings, inlays and onlays.

 

Restorative surgery

Surgery to restore an area seriously injured in an accident, to correct a birth defect that causes a functional disability, or to restore breast tissue which was surgically removed in response to an illness. Where there has been breast disfigurement for a female participant or covered dependent due to illness, surgery or mastectomy, legislation requires certain plans to cover reconstructive surgery on the other breast.

 

Salary replacement percentage

Some plans, such as disability benefit plans, are designed to replace a percentage of the participant’s salary.

 

Scaling

The removal of calculus (tartar) and stains from teeth using dental instruments.

 

Second opinion

A second physician’s opinion concerning the need for a service, such as surgery, recommended by your physi­cian. This may also include a third physician’s opinion if the second opinion conflicts with the first opinion.

 

Service

The company may use an employee’s service to determine eligibility for benefits, vesting, or benefit amounts.

 

Service area

For a plan featuring networks of providers, the geographic area serviced by the network.

 

Sex change/Gender re-assignment

Medical procedures to change a male to a female or a female to a male.

 

Short-term military service

Military service by a participant that is considered short-term by the plan.

 

Sick child care

Special day care designed for children sick enough that their usual care provider will not accept them.

 

Sick leave

Time off, generally paid in full, due to illness or injury. Generally sick leave is for a certain maximum number of days, and may be followed by short-term and long-term disability benefits.

 

Single coverage

Health coverage that covers the employee only; also called employee coverage.

 

Skilled care

24-hour nursing or rehabilitative care that can only be provided under the direction of skilled medical profes­sionals.

 

Skilled nursing facility

A facility that is licensed and accredited to provide inpatient skilled nursing care.

 

Social Security

Federal program of old age and survivor benefits covering most employees and their eligible dependents. The benefits are paid by the OASDHI.

 

Social Security offset

Some programs, including some pension and long-term disability plans, are designed to provide a certain level of total benefit, including expected Social Security benefits.

 

Sojourn

This is often an optional benefit for Short-term business travel programs.  Sojourn is the additional stay in a location for several days for leisure travel.  Example:  if you go to Paris, France on a business trip, but then remained in Paris for 2 days after your trip, this is considered sojourn.  Policies can include or exclude sojourn with a price impact.

 

Speech therapy

Treatment after illness, injury or birth defect to restore a patient’s communication abilities.

 

Status change

Changes that, under federal regulations, permit an employee to make corresponding changes in enrollment for certain benefits at times other than the annual open enrollment period. Such changes include a change in:

                    Eligibility (a child reaches the limiting age for coverage, gets married or leaves school)

                    Employment (beginning or termination of employment or change in work schedule by the employee, a spouse or child)

                    Marital status (marriage, death of spouse, divorce, legal separation or annulment)

                    Number of family members (birth, adoption or placement for adoption, or death)

                    Residence or worksite (to move outside a plan’s service area)

 

Subrogation

A company’s right to recover benefits paid in a lawsuit if the injury was the fault of another. For example, suppose a medical plan pays a participant’s expenses due to injury in a car accident, and later the participant receives a settlement from the driver at fault. The medical plan can recover certain benefits from the partici­pant.

 

Substance abuse or chemical dependency

Both alcoholism and drug dependency as classified by the International Classification of Diseases of the U.S. Department of Health and Human Services.

 

Summary Plan Description (SPD)

A document that ERISA requires be made available to participants and beneficiaries (and the DOL upon request). It must summarize the benefit plan in an easy-to-read format and cover key plan provisions.

 

Surgery

A branch of medicine that treats injuries, deformities and illness through operative methods.

 

Term life insurance

Insurance for a specific period of time that provides only a death benefit (does not have an investment feature to accumulate cash values the way whole life insurance does). Premiums are generally much lower than for cash value life insurance, and also generally increase each year.

 

Tobacco use

Some plans charge different premiums or provide different levels of benefits depending on whether the par­ticipant is a tobacco user. See the plan for the definition, including the length of time the participant must be tobacco-free and whether tobacco use includes snuff and chewing tobacco as well as cigarettes, cigars and pipes.

 

Topical

On the surface. In dental plans, this refers to painting the surface of teeth, such as in fluoride treatment, or applying an anesthetic to the gum surface.

 

Totally disabled

Disabled as defined by the plan.

 

Trauma

Injury; generally, serious and life-threatening injury requiring emergency treatment.

 

Third Country National (TCN)

This is a term referring to individuals who are in transit and/or applying for visas in countries that are not their country of origin and work for a company that has operations outside of their country of origin as well.  An example of this would be a Chinese citizen, working in France for an American company.

 

Ultrasound

Use of high-frequency sound waves to obtain medical information that cannot be gotten by x-rays. Often used to monitor the development of a fetus.

 

Universal life insurance

A flexible form of life insurance in which the policyholder may change the amount of death benefit (with evi­dence of insurability for increases), the amount of premium payments, and when premiums are paid.

 

Urgent

A medical condition with symptoms severe enough that postponing care for more than a given number of hours, such as 4, could seriously harm the patient as defined by the plan.

 

Urgent care

Treatment for an urgent situation.

 

Utilization controls or features

Features designed to control costs and reduce unnecessary care.

 

Variable life insurance

A form of life insurance with steady premiums but a death benefit that fluctuates (above a guaranteed mini­mum) with the value of investments backing the contract.

 

Variable universal life

A form of life insurance with the flexibility of universal life insurance premiums and the investment features of variable life insurance.

 

Vouchers

A dependent care option in which the participant submits periodic vouchers for dependent care to the pro­vider and the employer covers part or all of the cost.

 

Waiting period

See elimination period. Also refers to the days between the filing of a registration for a security with the SEC, and when the security can be legally offered to the public.

 

Waive

To give up a known right on purpose. For example, a participant eligible for certain benefits may have the option to waive those benefits.

 

Well-baby care

Medical care such as checkups and immunizations provided for a healthy baby.

 

Wellness

Wellness includes the idea of being healthy that is, without illness and combines it with the emotional and social aspects of health, to emphasize an overall sense of well-being and holistic health. Consumer driven health plans emphasize wellness to make employees focus on keeping themselves well and thus avoid medical procedures.

 

Wellness (health promotion) programs

A range of programs to promote good health and safety among employees.

 

Whole life insurance

Life insurance that provides death benefit coverage but also includes an investment feature and accumulates cash values. Unlike term insurance, for which annual premiums generally increase with age, whole life insurance generally has a level premium for the length of the policy.

 

X-rays

Radiation of extremely short wavelength that can pass through various solids. X-rays are used to diagnose, photograph, and even treat certain medical conditions. While a patient’s exposure to radiation while an x-ray is being taken is quite low, body parts not being x-rayed may be shielded.

 

Year of service

Some plans determine an employee’s eligibility for participation, vesting, or benefit amounts based on the employee’s service. See the plan for the definition of a year of service.

 

 

 

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