Frequently Asked Questions
- GLOSSARY
•
For Employers • For Employees
• Glossary
Coinsurance
- A policy provision by which the insured person and the insurer share
the covered losses under a policy in a specified ratio. (i.e. 80%
by insurers and 20% by insured).
Copay -
An arrangement where the insured pays a specified amount for various
services and the health carrier pays the remaining charges (i.e. $15
dollar copay per physician office visit).
Coordination of Benefits
- The mechanism used in group health insurance to designate the order
in which the multiple carriers are to pay benefits and to prevent
duplicate payments.
Credentialing
- A review process of potential medical providers to assess their
standing and qualifications.
Deductible
- An amount which a policyholder agrees to pay toward the total amount
of an insured claim.
Deductible Carryover-
During the last three months of a calendar year charges incurred for
health services can be used to satisfy the deductible for the following
year. These credits may be applied whether or not prior calendar years
deductible had been met.
Deductible Credit
- This is a credit given to an individual insured when an employer
moves its medical plan from one insurance company/health plan to another
mid year. The new medical plan will typically give an individual insured
credit for a deductible met under the previous plan.
Gatekeeper
- The primary care physician who must provide or authorize medical
services for the member.
HMO Plan (Health Management Organization)
- Prepaid medical service plan which provides services to plan members.
Medical providers contract with HMO to provide medical services. Members
must use contracted providers. Emphasis is on preventive medicine.
HMO-Open Choice Plan - This is a unique
type of HMO Plan. This plan does not require naming a primary physician.
This plan also allows a patient to receive care outside the approved
network.
Indemnity Plan
- This is a type of medical plan that allows an insured to use any
licensed physician as opposed to being required to use a contracted
network doctor. This plan usually pays a specified percent (example:
80%) toward covered eligible medical expenses. The 80% is usually
a percent of the reasonable and customary fee schedule for a specific
geographical area.
Managed Care - An approach to health
care where the patient receives medical services in a coordinated
manner to eliminate unnecessary and inappropriate changes and services.
Medicare Primary
- Medicare would pay first on claims of active employees age 65 and
older. This situation occurs when an employee aged 65 or older
works
for a firm which employs less than 20 employees. The Medicare
Secondary Payer Rules is a federal law that addresses the issues
as to
whether
medical claims are paid for by Medicare or paid second by Medicare
after the medical plan.
Medicare Secondary
- For insured age 65 and over, Medicare secondary indicates that the
insured’s employer sponsored medical plan would pay first on
claims and Medicare would pay second (this usually occurs in situations
where the plan sponsor/employer employs more than 20 employees).
Negotiated Fee Rate
- This is a fee schedule based on what an insurance company and a
provider agreed to contractually for the services provided by a provider
for a specific procedure or service. Some plans pay claims based on
the negotiated fee rate as opposed to reasonable & customary
Network - A defined group of medical or dental providers typically
linked through contractual arrangements with insurance companies to
supply a full range of primary and acute health services.
Out of Pocket Maximum
- The maximum amount of coinsurance and deductible an individual is
required to pay during a calendar year after which an insurer will
pay 100% of any covered expenses up to the policy limit.
Partially Self-funded -This is a term
usually associated with employer sponsored plans in which the employer
is large enough to pay a certain portion of each insured’s claims.
The insurance company would only pay claims in excess of the specified
maximum elected by the employer. Example- employer agrees to pay 100%
of claims up to 25,000 on each insured. Insurance company pays the
balance.
Participating Providers - Providers
who are under contract to provide medical care.
POS Plan - This plan allows a choice
of whether to receive services from a participating or non participating
provider. However, most of the plans require the insured to select
a primary care physician when using a network provider. The primary
care physician would refer the
patient to an approved specialty care physician.
PPO Plan (Preferred Provider Organization)
- An arrangement whereby an insurance co./health plan contracts with
a group of medical care providers who furnish services at lower than
usual fees in return for prompt payment and a certain volume of patients.
Pre-Certification - The process in which
health care professionals evaluate an attending physicians request
for a patients admission to a hospital to evaluate whether or not
inpatient care is necessary. The health care professional involved
in the evaluation process are employed by the insurance companies
and/or health plans.
Pre-Existing Condition - A physical
condition that existed before the effective date of coverage. Insurance
companies typically limit benefits/coverage for a specified period
of time for a pre-existing condition (usually 12 months or 18 months).
Preventive Care
- This type of care is best exemplified by routine physical examinations
and immunizations. The emphasis is on preventing illnesses before
they occur.
Primary Care Physician
- A family practitioner/general practitioner, internal medicine, a
pediatric doctor, or gynecology doctor. HMOs and most POS (point of
service) plans require a plan participant/insured to select a primary
care physician and access that physician first in order to receive
approval for a specialist care.
Reasonable & Customary
- A charge for health care which is consistent with the going rate
or charge in a certain geographical area, for identical or similar
services.
Stop Loss
- Type of reinsurance which can be taken out by a health plan or self-funded
employer plan. The plan can be written to cover excess losses over
a specified amount, either on a specific individual basis or on a
total basis for the plan over a period of time - usually one year.
Usual and Customary
- A set amount of payment for a specific procedure based on prevailing
fees in a geographical area.
