| Allowed Amount | Maximum amount on which payment is based for covered health care services. This may be called “eligible expense,” “payment allowance” or “negotiated rate.” |
| Appeal | A request for your health insurer or plan to review a decision or a grievance. |
| Balance Billing | When a provider bills you for the difference between the provider’s charge and the allowed amount. This may not be permitted if the provider has a contract with the insurance carrier. |
| Co-insurance | Co-insurance refers to money that an individual is required to pay for services, after a deductible has been paid. In some health care plans, co-insurance is called “co-payment.” Co-insurance is often specified as a percentage. For example, the employee pays 20 percent toward the charges for a service and the insurance company pays 80 percent. |
| Coordination of Benefits | This is the process by which a health insurance company determines if it should be the primary or secondary payer of medical claims for a patient who has coverage from more than one health insurance policy. |
| Co-payment | A fixed amount (for example, $25) you pay for a covered health care service, usually when you receive the service. The amount can vary by the type of covered health care service. |
| Cal-COBRA | The California Continuation Benefits Replacement Act of 1997 (Cal-COBRA) requires insurance carriers and HMOs to provide COBRA-like coverage for employees of smaller employers (two to 19 employees) not covered by COBRA. Cal-COBRA allows you to continue to purchase health insurance for up to 36 months if you lose your job, or your employer-sponsored coverage is otherwise terminated. |
| COBRA | COBRA is the Consolidated Omnibus Budget Reconciliation Act of 1985, federal legislation that allows you – if you work for an insured employer group of 20 or more employees – to continue to purchase health insurance for up to 18 months if you lose your job, or your employer-sponsored coverage is otherwise terminated. In California, an individual who has exhausted his/her COBRA coverage and does not qualify for any of the COBRA extensions may elect up to 18 months of additional coverage under Cal-COBRA. |
| Date of Service | The date on which a healthcare service was provided. |
| Deductible | The amount you owe for health care services your health insurance or plan covers before your health insurance or plan begins to pay. This amount is paid by you to the health care provider. |
| Denial of Claim | The refusal of an insurance company or carrier to honor a request by an individual (or his or her provider) to pay for health care services obtained from a health care professional. |
| Dependent | A dependent is a person or persons relying on the policy holder for support. This may include the spouse and/or unmarried children (whether natural, adopted or step) of an insured. Dependents with more than one insurance plan will be subject to coordination of benefits. |
| Durable medical Equipment (DME) | Medical equipment used in the course of treatment or home care, including such items as TENS units, Traction Units, Muscle Stimulators Braces, etc. Coverage levels for DME often differ from coverage levels for office visits and other medical services. |
| Excluded Services | Health care services that your health insurance or plan doesn’t pay for or cover. |
| Explanation of Benefits (EOB) | A statement sent from the health insurance company to a member listing services that were billed by a healthcare provider, how those charges were processed, and the total amount of patient responsibility for the claim. |
| Flexible spending Account (FSA) | An arrangement you set up through your employer to pay for many of your out-of-pocket medical expenses with tax-free dollars. These expenses include insurance copayments, deductibles, qualified prescription drugs, and medical devices. FSA’s are governed by I.R.S. rules. |
| Fee for Service | Fee-for-service is a system of health insurance payment in which a doctor or other health care provider is paid a fee for each particular service rendered. |
| Group Health Insurance | A health insurance plan that provides benefits for employees of a business or members of an organization, as opposed to an individual plan. |
| HMO | HMO means “Health Maintenance Organization.” HMO plans offer a wide range of health care services through a network of providers that contract exclusively with the HMO, or who agree to provide services to members at a pre-negotiated rate. As a member of an HMO, you will need to choose a primary care physician (“PCP”) who will provide most of your health care and refer you to HMO specialists as needed. Services provided outside of the HMO model are not usually covered by the insurance carrier. |
| HSA (Health Savings Account | A health savings account (HSA) is a tax-advantaged medical savings account available to taxpayers in the United States who are enrolled in a high-deductible health plan (HDHP). The funds contributed to an account are not subject to federal income tax at the time of deposit. Unlike a flexible spending account (FSA), funds roll over and accumulate year to year if not spent. |
| In-network | In-network refers to providers or health care facilities that are part of a health plan’s network of providers with which it has negotiated a discount. Insured individuals usually pay less when using an in-network provider, because those networks provide services at lower cost to the insurance companies with which they have contracts. |
| Managed Care | A term used to describe a variety of healthcare and health insurance systems that attempt to guide a member’s use of benefits, typically by requiring that a member coordinate his or her healthcare through a primary care physician, or by encouraging the use of a specific network of healthcare providers. |
| Maximum Dollar Limit | The maximum amount of money that an insurance company (or self-insured company) will pay for claims within a specific time period. Maximum dollar limits vary greatly. They may be based on or specified in terms of types of illnesses or types of services. |
| Medically Necessary | Health care services, medical equipment or supplies needed to prevent, diagnose or treat an illness, injury, condition, disease or its symptoms and that meet accepted standards of medicine |
| Network | The facilities, providers and suppliers your health insurer or plan has contracted with to provide health care services. |
| Non-Preferred Provider | A provider who doesn’t have a contract with your health insurer or plan to provide services to you. You may have a higher deductible and copay and pay more out of pocket when you access services through a non-preferred provider. |
| Out of Network Care | Healthcare rendered to a patient outside of the health insurance company’s network of preferred providers. In many cases, the health insurance company will not pay for these services. Or, services provided may be subject to a higher deductible and copay. |
| Out-of-Pocket Limit | The most you pay during a policy period (usually a year) before your health insurance or plan begins to pay 100% of the allowed amount. |
| Over the Counter (OTC) | Drugs/equipment that may be obtained without a prescription. |
| Point of Service (POS) Plan | POS stands for “Point of Service.” POS plans combine elements of both HMO and PPO plans. The patient selects how to access the treatment. Benefits/coverage is based upon whether the treatments/services are under the HMO or the PPO model. |
| PPO | PPO means “Preferred Provider Organization.” With a PPO plan you’ll need to recieve your medical care from doctors or hospitals on the insurance company’s list of preferred providers if you want your claims paid at the highest level, with the least amount of patient cost. |
| Preauthorization | A decision by your health insurer or plan that a health care service, treatment plan, prescription drug or durable medical equipment is medically necessary. Sometimes called prior authorization, prior approval or precertification. Some plans require reauthorization/certification of medical necessity prior to the service being provided. |
| Pre-existing Condition | A pre-existing condition is a medical condition that is excluded from coverage by an insurance company because the condition was believed to exist prior to the individual obtaining a policy from the particular insurance company. |
| Preferred Provider | A provider who has a contract with your health insurer or plan to provide services to you at a discount. |
| Premium | The amount that must be paid for your health insurance or plan. |
| Primary Care Physician | A physician (M.D. – Medical Doctor or D.O. – Doctor of Osteopathic Medicine) who directly provides or coordinates a range of health care services for a patient. |
| Referral | The process through which a patient under a managed care health insurance plan is authorized by his or her primary care physician to a see a specialist for the diagnosis or treatment of a specific condition. |
| Stop Loss | The dollar amount of claims filed for eligible expenses at which point you’ve paid 100 percent of your out-of-pocket and the insurance begins to pay at 100 percent. Stop-loss is reached when an insured individual has paid the deductible and reached the out-of-pocket maximum amount of co-insurance. |
| UCR (Usual, Customary and Reasonable | The amount paid for a medical service in a geographic area based on what providers in the area usually charge for the same or similar medical service. The UCR amount sometimes is used to determine the allowed amount. |
| Workers’ Compensation (W.C.) | An insurance plan that employers are required to have to cover employees who get sick or injured on the job. |
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