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Health and Life Insurance for Individuals, Families and Groups

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Good to Know Health Insurance Terms

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Shopping for health insurance isn’t easy, partly because many healthcare terms are hard to understand. We have supplied you with some “good-to-know” and straightforward definitions of healthcare terms here to help you select a plan that meets your needs.

Please note: Many of these terms apply to many types of insurance in general, but are defined here as they specifically relate to health insurance.

Looking for the Uniform Glossary? The Uniform Glossary, required by the Affordable Care Act, is a list of commonly used healthcare terms and definitions to help you better understand your health plan.

Please note: Terms and definitions may differ from those used in other plan documents describing your coverage

Allowed Amount - The maximum amount payable for covered services.

Anniversary Date - The annual anniversary of when your health insurance coverage became effective.

Benefit Period - This timeframe is often a calendar year for most health plans. It defines the time period when benefits for services are covered under your plan, regardless of when your coverage took effect. This period also applies to benefit maximums, deductibles, coinsurance limits and their accumulation. For example, your plan may cover 10 physical therapy sessions per benefit period, which is specified as January 1 through December 31 in your plan’s documents. So that means if you use more than 10 sessions within that time frame, the 11th session won’t be covered.

Coinsurance - The percentage of allowed charges for covered services you're required to pay each benefit period. Your health insurance plan might cover 80 percent of your medical bill, leaving you responsible for the other 20 percent. This 20 percent is the coinsurance. Coinsurance only applies after you have met any deductible or paid your copayment, if applicable to your plan.

Coinsurance Limit (or Maximum) - The most you’ll pay in coinsurance costs during a benefit period.

Condition - It is an injury, ailment, disease, illness or disorder.

Contract - The agreement between an insurance company and the policyholder. The contract usually includes the group and employee applications, policy certificates and any riders or addenda.

Copayment (or Copay) - A dollar amount you are required to pay a healthcare provider at the time you receive services. For instance, you may have to pay a copayment for each covered visit to your doctor. Not all plans require a copayment.

Covered Charges - These charges for covered services that have been billed under your health plan. Insurance companies have the right to limit covered charges from providers that are outside your plan’s network.

Covered Person - Any person covered under the plan.

Covered Service - A healthcare provider’s service or supply covered under your health plan. Benefits will be provided for these services, based on your plan’s specific coverage.

Creditable Coverage - Coverage of an individual under any of the following:

  • a group health plan, including church and governmental plans;
  • health insurance coverage;
  • Part A or Part B of Title XVIII of the Social Security Act (Medicare);
  • Title XIX of the Social Security Act, other than coverage consisting solely of benefits under Section 1928 (Medicaid);
  • the health plan for active military personnel, including TRICARE;
  • the Indian Health Service or other tribal organization program;
  • a state health benefits risk pool;
  • the Federal Employees Health Benefits Program;
  • a public health plan as defined in federal regulations;
  • a health benefit plan under section 5 (c) of the Peace Corps Act;
  • or any other plan which provides comprehensive hospital, medical and surgical services.

Deductible - A dollar amount you are responsible for paying each benefit period before health plan benefits are provided.

Dependent Coverage - Coverage for all eligible dependents.

Emergency Medical Condition - A medical condition manifesting itself by acute symptoms of sufficient severity, including severe pain, so that a prudent layperson, who possesses an average knowledge of health and medicine, could reasonably expect the absence of immediate medical attention to result in:

  • Placing an individual's health in serious jeopardy, or with respect to a pregnant woman, the health of the woman or her unborn child;
  • Result in serious impairment to the individual's bodily functions; or
  • Result in serious dysfunction of a bodily organ or part of the individual.

Experimental or Investigational Drug, Device, Medical Treatment or Procedure - A drug, device, medical treatment or procedure not approved by the U.S. Food and Drug Administration (FDA) or not considered to be the standard of care.

FSA (Flexible Spending Account) - Typically set up through an employer plan, an FSA allows you to set pre-tax dollars aside for common medical expenses and dependent care. FSA funds must be used by the end of the term-year or the funds will be lost (they will be returned to the employer). You should always check with your employer’s human resource team for a complete list of FSA-qualified expenses that can be purchased directly or reimbursed. A few common FSA-eligible expenses include:

  • Copayments for doctors’ visits, as well as for chiropractor and psychological sessions
  • Hospital fees, medical tests and services, such as X-rays and screenings
  • Physical rehabilitation
  • Dental and orthodontic expenses, such as cleaning, fillings and braces
  • Inpatient treatment for alcohol or drug addiction
  • Immunization and flu shots

HMO (Health Maintenance Organization) - Offers healthcare services exclusively with HMO providers. Under an HMO plan, you may be required to choose a primary care physician (PCP) who will be your main healthcare provider and recommend other HMO specialists when needed. Typically, services received from providers outside of the HMO plan are not covered unless for emergencies.

HRA (Health Reimbursement Account) - A tax-advantaged account that allows an employer to set aside funds to reimburse Covered Services paid for by participating employees.

HSA (Health Savings Account) - A tax-advantaged medical savings account that allows you to save for future medical expenses. Funds contributed to the account are not subject to federal income taxes at the time of deposit. Unlike Flexible Spending Accounts (FSA), funds rollover and accumulate year-to-year. HSAs must be paired with an HSA-compatible high-deductible health insurance plan.

Health Assessment - A health questionnaire that evaluates your health risks and quality of life.

Inpatient - A covered person under a health plan who receives care as a registered bed patient in a hospital or other facility where a room and board charge is made.

Institution (Institutional) - A hospital or certain other facility.

Legal Guardian - An individual who is either the natural guardian of a child or who was appointed a guardian of a child in a legal proceeding by a court having the appropriate jurisdiction.

Long-Term Insurance - A type of health insurance that can be purchased to cover specific services covering a specific amount of time.

Medical Care - Professional services received from a healthcare provider or facility to treat a condition.

Medically Necessary (or Medical Necessity) - A service, supply and/or prescription drug that is required to diagnose or treat a condition and which Medical Mutual determines is:

  • appropriate with regard to the standards of good medical practice and not experimental or investigational;
  • not primarily for your convenience or the convenience of a provider;
  • and the most appropriate supply or level of service which can be safely provided to you. When applied to the care of an inpatient, this means that your medical symptoms or condition require that the services cannot be safely or adequately provided to you as an outpatient. When applied to prescription drugs, this means the prescription drug is cost effective compared to alternative prescription drugs which will produce comparable effective clinical results.

Medicare - A federal program that pays for certain healthcare expenses for people age 65 or older.

Non-Covered Charges - Billed charges for services and supplies that are not covered under the health plan.

Non-PPO Network Provider - A healthcare provider who is not part of a plan’s PPO network.

Outpatient - Services provided in a facility, such as a doctor’s office, hospital or clinic that do not require confinement in a hospital.

Out-of-pocket Cost - Expenses for which you are responsible.

PPO (Preferred Provider Organization) - A network of providers that, when utilized, allows you to get the greatest level of benefits available under a plan. Individuals may go to out-of-network providers, but should expect to pay higher out-of-pocket costs.

PPO Network Provider - A healthcare provider who is part of a PPO plan’s network.

Prescription Drug (Federal Legend Drug) - Any medication that by federal or state law may not be dispensed without a prescription order.

Premium - Periodic payment you make to your insurance provider to obtain and maintain coverage.

Provider (healthcare provider) - A hospital, facility, physician or other licensed healthcare professional.

Short-Term Insurance - Insurance for a limited period of time, usually no more than 12 months, that you can elect to purchase. This insurance may be useful when you are between jobs or a recent graduate.

Urgent Care Provider - A provider that performs services for health problems that require immediate medical attention but are not life-threatening emergencies.

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This calculator shows expected spending for individuals and families in a Silver Plan who are eligible to purchase coverage in the Federally Facilitated Exchange under the Affordable Care Act. Under the law, the maximum contributions to premium will be based on modified adjusted gross income, while estimates in this calculator are based on the annual income entered by the user. Based on the information you provide, you can estimate your monthly premium payments and also estimate how much you may receive in federal assistance. Please remember this is just an estimate.