Health Insurance Glossary of Terms
- Annual Limit - Certain benefits of coverage may be limited to a number of visits or a set dollar amount per year.
- Alternative Funding Arrangement - A funding arrangement with the benefits of both self-funding and fully insured arrangements.
- Birthday rule - When both parents of a dependent have health insurance, the birthday rule decides which coverage is primary and which is secondary. Whichever parent has their birthday earlier in the year (regardless of year of birth) is the primary insurance holder and the other parents insurance would be secondary.
- Co-insurance - The percentage of a covered service that you pay after you have paid the deductible and co-pay.
- Co-insurance limit - The limit on the amount of money you pay before the insurance company pays 100% for services for the rest of the plan year.
- Co-ordination of Benefits - The way that your plan pays when coordinating with another insurance plan.
- Co-pay - The fee that you pay for services. Most insurance plans pay 100% after you have paid your co-pay for covered services.
- Deductible - The amount you have to pay out of pocket before your insurance starts paying.
- Deductible carry-forward - Payments for services in the previous year may be subject the the prior year's deductibles.
- Employee Assistance Plan - A benefit for non-medical services such as marital counseling, mental health, etc.
- Experimental/Investigational - Procedures or tests that have not been verified by clinical trials conducted by recognized physicians or scientists. Many insurance providers to not provide coverage for these services.
- Fully Insured - The insurance company pays claims from its own money after collecting the premiums from the insured.
- Incurred But Not Paid - A significant balance sheet item for insurers for claims that have not been paid, but may or may not be received. Incurred But Not Reported plus Reported But Not Paid gives the amount for the Incurred But Not Paid.
- In-Network/Participating/Par Providers - Doctors and other providers who have a relationship with the insurance company.
- Life time maximum - The total amount the company will pay out over the life of the policy. Many insurance policies have a yearly maximum that replenishes so that once that amount is used there will be money left for the following years claims.
- Self-Insured - When a company hires a Third Party Administrator to manage the claims and eligibility of the insurance plan or trust as opposed to having managed by the insurance company.
- Reciprocity - The size of the network of doctors the insurance plan deals with. Full Reciprocity is when your insurance allows you to see any provider anywhere in the country. Limited Reciprocity is when your insurance allows you to see a provider only in a local area. No Reciprocity is when your insurance only allows you to see a select network of providers that the insurance company has purchased access to.
- No-fault - Usually for automobile insurance, if you are injured and your auto policy is no-fault your health insurance becomes a secondary payer and needs the explanation of benefits from the auto insurance carrier before they will pay the claim.
- Out-of-Network/Non Participating/Non-Par Providers - Doctors and other providers that do not have a relationship with the insurance company.
- Out Of Pocket Maximum - The maximum amount to be paid out by the patient.
- Subscriber - The main member on the insurance policy.
- Reserve - The amount of money that needs to be set aside for statutorily required funds for dissolution.