GLOSSARY OF KEY INSURANCE TERMS THAT ARE GOOD TO KNOW

AD&D – Accidental Death and Dismemberment - - Accident insurance that pays the insured or beneficiary in case of bodily injury or death due to an accident, that is not natural causes.
Cadillac Plans - - These plans are called “gold-plated” insurance plans. They are usually defined by the total cost (what you pay for a non-group plan or what the employee and employer pay collectively for a group plan) rather than what the insurance covers. Starting in 2014, there will be a 40 percent tax for individuals whose insurance plan costs over $10,200 annually and for a family whose plan cost over $27,500 annually. Monies over those two annual amounts will be taxed. For example, if your family plan costs $30,000 annually (what you and your employer pay together for the year), than you will be taxed 40 percent on $2,500 (the difference of what your total cost minus the $27,500).
Calendar Year - - The amount of time between January 1 and December 31. The 12 month period beginning January 1 and ending at 12:00 midnight on December 31, the last day of the year. See Policy Year.
Certificate of Creditable Coverage (CCC) - - A certificate issued by an insurance company that gives written verification of the existence of insurance, dates of coverage, and thus is proof that a person has or has had valid medical insurance.
Claims - - The legal maximum allowable amount of money due an insured person from an insurance company to pay for an incurred medical expense. Usually a claim is made in the form of a written notification to the insurance company requesting payment for medical care received, care that is covered under the terms of the insurance policy.
COBRA - - Consolidated Omnibus Budget Reconciliation Act. This law makes it possible for individuals who have been on group health insurance to continue their insurance coverage in spite of job loss for certain periods of time, usually for 18 months from time of termination. COBRA also allows 23 year olds and older dependents to stay with the parents’ coverage for the duration of 18 months.
Co-insurance - - A percentage of the medical costs to be shared by the insurer and the insured after the deductible has been met. In an “80/20 to $5000” plan, the insured will pay his deductible (e.g. $500) and also 20 percent (the co-insurance) of the first $5000 of medical costs. Then the insurance company will cover everything. Note that Co-insurance is not the same as Co-pay.
Continuous Coverage - - Health insurance coverage that is not interrupted by a lapse of 63 days or more.
Co-pay / Co-payment - - A certain amount of money, usually a fixed preset dollar fee, paid by a person who has insurance at the time medical care is received. This fee is in addition to any deductible and co-insurance limits.
Covered Expenses - - Medical expenses that the insurance company will cover based on the insurance policy purchased, thus expenses that qualify for reimbursement. A summary of “covered expenses” is listed in the Schedule of Benefits.
Deductible - - The amount of medical costs to be covered by the insured before the company begins to cover costs.
Deductible Carry Forward - - Expenses incurred during a certain period (e.g. the last month, the last three months) of a Calendar Year will be applied toward satisfaction of the Deductible for the next Calendar Year, but only if the Deductible was not met during the prior Calendar Year.
Dependent - - Usually a spouse and/or children who are legally dependent on the insured. Depending on the insurance plan, dependents may qualify for insurance coverage on the insured’s policy.
Effective Date - - The date when the insurance coverage begins, becomes effective. The day when coverage for medical care begins.
Eligible Medical Expenses - - A medical expense that an insurance company will cover. For example, many insurance policies will not cover plastic surgery, so it would not be an eligible medical expense.
Exchanges - - An organized marketplace for the purchase of health insurance set up as a governmental (usually State government) or quasi-governmental entity to help individuals and business purchase the most cost-effective plans in that State. The US federal government has mandated each State to have at least two exchange plans available for individuals and businesses. The exchanges will bring together private health insurance companies through government minimum requirements to compete for business among individuals and businesses. Exchanges are another option for health insurance and will be predominately run by private health care companies with State and Federal government overseeing the process.
Fulfillment Kit - - Materials sent to the client after they have been approved for insurance coverage. The kit usually contains the Medical ID card, a Certificate of Coverage, a detailed explanation of the insurance plan, information concerning filing claims, and contact information for the insurance company.
HIPAA - - The Health Insurance Portability and Accountability Act. This is also known as the Kassebaum-Kennedy Act enacted by the US Congress in 1996. It includes basic requirements for health insurance privacy and portability of health insurance, thus avoiding exclusion of coverage for pre-existing medical conditions.
In-Network, Out-of-Network - - Medical facilities and practitioners that have contracted with the insurance companies to provide discounted rates. Those facilities that have not contracted are considered “Out-of-Network.” The insured will save money by using “In-Network” providers and facilities.
In-patient - - A patient admitted for at least a 24-hour residence (or at least overnight) in a medical facility where he is being treated.
Insurance Broker - - An individual who works as an intermediary between a person wanting insurance and one or more insurance companies to guide them in the purchase of insurance.
Lifetime Maximum - - The maximum amount an insurance company will provide for all medical care received. The usual limits are $1,000,000; $3,000,000 or $5,000,000.
Maximum Limit, Maximum Coverage - - The maximum amount an insurance company will provide for all medical care received. The usual limits are $1,000,000; $3,000,000 or $5,000,000. (Same as Lifetime Maximum)
Medical Evacuation (MedEvac, medivac) - - Timely and efficient evacuation and in-route care of ill or injured persons, usually by air transportation, to a place where they can receive adequate medical care.
Online Fulfillment - - Electronic communication of Medical ID card, certificate or indication of coverage, information on the policy purchased, how to file a claim, and the insurance company’s contact information.
Out-patient - - A patient who receives medical treatment at a clinic or hospital, but is not admitted for an overnight stay.
Out-of-pocket - - Direct outlays of cash that will not be reimbursed by the insurance company. This will include deductibles and co-insurance limits.
Policy Year - - The amount of time from the effective date of the policy that comprises one full year. For example, if the effective date begins April 14, 2009, the coverage will end at midnight, April 13, 2010.
Pre-certification - - The need to check with the insurance company before receiving medical care, generally for major medical procedures, to confirm if the medical care received will be covered by the insurance company.
Pre-existing Condition - - Any medical condition that the insured has prior to contracting for insurance coverage.
Premium - - Payment for insurance, the amount paid by the insured to the insurance company for health insurance coverage.
Preventive Care (Wellness Benefit, Well-care) - - Medical care given in advance of symptoms to prevent illness or injury. Generally includes emphasis on healthy behavior, regular testing, screening for diseases, routine physical examinations and immunizations.
Rider (Waiver) - - A formal written statement by the insurance company to the insured amending and modifying coverage, e.g., adding or excluding coverage. It could involve waiving coverage for a certain medical condition like cancer, hepatitis or adding coverage for such conditions.
Schedule of Benefits (SOB) - - A list of the benefits, amount of coverage provided in a health insurance policy, usually one or two pages in length.
Self-funded insurance - - A self-funded (self-insured) health plan is a type of job-based health insurance coverage, where the employer pays the claims with its own funds. This is different from fully insured plans, where the employer contracts with an insurance company, such as Aetna or Blue Cross Blue Shield, and the insurer covers the employees and dependents.
Term Life Insurance - - An insurance plan that covers a person for a specified period of time (a day, week, year(s)), but not for his whole life. It only pays benefits if the person dies.
Traditional Health Plans - - Plans that are provided by private health insurance companies such as Blue Cross, Health Net, United Health Care, Humana, Aetna, etc. These plans are your typical HMOs, PPOs, HSAs, and no co-pay plans.
Trip Cancellation - - Provides reimbursement for non-refundable trip payments and deposits if a trip is canceled for illness, death or other specific unforeseen circumstances The "trip cancellation" benefit covers you in the event you have to cancel prior to your trip due to a covered reason listed in your travel insurance policy prior to your departure date.
Trip Interruption - - Trip interruption plans typically reimburse you for pre-paid non-refundable travel expenses if an unexpected crises (e.g., death of a family member, sickness, airline strike, travel supplier bankruptcy, among other crises) occurs during your trip causing it to be cancelled, interrupted or delayed.
Underwriter - - (1) The company that receives the insurance premium and accepts the responsibility to cover medical costs; (2) The employee in an insurance company who decides whether or not the insurance company should assume the risk of offering the insurance to an individual or group; (3) An insurance agent.
Usual, Reasonable & Customary (UCR) - - The amount an insurance company will pay for a covered medical expense based on the customary charges of all medical providers in a given geographic area for a similar service.
Waiting Period - - A period of time the insured must wait before some or all of the coverages offered in an insurance plan begin and the insured can receive benefits.
Waiver (Rider) - - A formal written statement by the insurance company to the insured amending and modifying coverage, e.g., adding or excluding coverage. It could involve waiving coverage for a certain medical condition like cancer, hepatitis or adding coverage for such conditions.
Wellness Benefit (Preventive Care, Well-care) - - Medical care given in advance of symptoms to prevent illness or injury. Generally includes emphasis on healthy behavior, regular testing, screening for diseases, routine physical examinations and immunizations.