COBRA – Abbreviation for Consolidated Omnibus Budget Reconciliation Act of 1985. Part of this law requires employers to continue offering health coverage for enrollees and their dependents for a period of time after an enrollee leaves the employer. Typically, the employee pays the entire monthly premium when covered by COBRA.
Co-Payment – A fixed sum and/or percentage that an enrollee pays for specific health services, regardless of the total charge for service (the insurer pays the rest of the total charge). For example, an enrollee may pay $15 co-payment and 20 percent of the total charge for each doctor’s visit, $75 for each day in the hospital, and $25 for each prescription.
Co-Insurance – The portion of covered health care costs for which the covered person has a financial responsibility, usually according to a fixed percentage.
Deductible – A predetermined annual amount an enrollee must pay before the insurer will begin paying their portion of covered expenses. For example, if the plan has $300 deductible, the insured person would be responsible for the first $300 for his/her health care bills.
Drug Formulary – A listing of prescription medications (name brand and generic) which are preferred for use by the health plan, and which will be dispensed through participating pharmacies to covered persons. This list is subjected to periodic review and modification by the pharmacy benefit management plans.
Eligible Person/Employee – One who meets the requirements specified to qualify for coverage under a health plan.
Eligibility Date – The defined date a covered person becomes eligible for benefits under an existing contract.
Evidence of Coverage – A detailed description of the benefits included in the health plan. An evidence/certificate of coverage is required by state laws and representative fo the coverage provided under the contract issued to an employer.
Health Maintenance Organization (HMO) – Plan participants obtain comprehensive health care services from a specified list of in-network providers who receive a fixed periodic prepayment from the insurer. Plan participants’ access to in-network providers is controlled by a primary-care physician or gatekeeper. HMO’s typically do not have a deductible.
Medically Necessary – The evaluation of health care services to determine if they are: medically appropriate and necessary to meet basic health needs; consistent with the diagnosis or condition and rendered in a cost effective manner; and consistent with national medical practice guidelines regarding type, frequency, and duration of treatment.
Medicare – A nationwide, federally administered health insurance program which partially covers the cost of hospitalization, Medicare care, and some related services for eligible persons. Medicare has two parts: Part A-covers inpatient costs. Medicare pays for pharmaceutical services provided in hospitals, but not for those provided in outpatient settings. Also called Supplementary Medical Insurance. Part B-covers outpatient costs (i.e. physician office visits, lab, and x-ray).
Members – Participants in health plan (subscribers/enrollees and eligible dependents), who make up the plan’s enrollment.
Pre-exisiting Condition – Any medical condition that has been diagnosed or treated within a specified period immediately preceding the covered person’s effective date of coverage under the group contract.
Preferred Provider Organization (PPO) – Plan participants may seek care from an in-network provider or from an out-of-network physician or gatekeeper. Typically, the patient pays more for services from an out-of-network provider.
Premium – The amount paid by an enrollee and/or employer to an insurance company/carrier of coverage.
Preventive Care – Comprehensive care emphasizing priorities for prevention, early detection, and early treatment of conditions, generally including routine physical examination, immunization, and well person care.
Primary Care – Basic or general health care, traditionally provided by family practice, pediatrics, and internal medicine.
Primary Care Physician (PCP) – A physician the majority of whose practice is devoted to internal medicine, family/general practice, and pediatrics.
Provider – A physician, hospital, group practice, nursing home, pharmacy, or any individual or group of individuals that provides a health care service.
Referral – The recommendation by a physician and/or health plan for a covered person to receive care from a different physician or facility.