Glossary of Health Insurance Terms

A - B - C - D - E - F - G - H - I - J - K - L - M - N - O - P - Q - R - S - T - U - V - W - X - Y - Z

Health insurance includes many terms and phrases that may be unfamiliar. This glossary explains common health insurance and healthcare terms to help you better understand your coverage and make informed decisions about your care.  

A

Allowed Amount: The maximum amount a health insurance plan will cover (pay) a provider for a healthcare service.

B

Benefit Period: A specific time frame during which services are covered under your health insurance. It also defines the time when your benefit maximums, deductibles and coinsurance limits build up. It has a start and end date that generally lasts one calendar year for health insurance plans. Also called a "term year.”
Example: You may have a plan with a benefit period of Jan. 1 through Dec. 31 that covers 10 physical therapy visits. Any additional visits will not be covered and you will have to pay out-of-pocket.

C

Chronic disease management: An approach to manage chronic illness through integrated and coordinated care, including screenings, monitoring and check-ins, patient education and treatment options. The goal is to help improve quality of life by preventing or minimizing the effects of a disease while reducing healthcare costs.

Claim: A payment request from your healthcare provider for services and benefits you received. 

Coinsurance: The percentage of medical costs you must pay each benefit period after you meet your deductible. Depending on your plan's coverage, you and your health insurance will each pay a certain amount. This payment is for covered services only. You may still have to pay a copay.
Example: You have an “80/20” plan. This means your insurance company will pay 80% of your medical bill after you’ve met your deductible. You will have to pay the remaining 20%, which is the coinsurance.

Coinsurance Limit (or Maximum): The maximum amount you pay in coinsurance during a benefit period.

Condition: An injury, ailment, disease, illness or disorder.

Contract: The agreement between an insurance company and the policyholder.

Copayment (Copay): A fixed amount you pay a healthcare provider when you receive a covered service. Your health plan determines which visits require or remit a copay. Copay amounts may vary by service, including prescriptions, lab tests and specialist visits.

Covered Charges: Costs for covered services that your health plan pays for. Limits may apply when you receive services from providers outside your plan's network.

Covered Person: Any person enrolled under a health insurance plan and eligible for covered services.

Covered Service: A healthcare service or medical supply covered by your health plan. Coverage is based on your plan’s benefits.

Creditable Coverage: Health coverage provided through any of the following:

• A group health plan, including church or governmental plans. 
• Health insurance coverage. 
• Medicare Part A or Part B under Title XVIII of the Social Security Act. 
• Medicaid under Title XIX of the Social Security Act, except coverage limited to benefits under Section 1928. 
• A health plan for active-duty military personnel, including TRICARE. 
• An Indian Health Service or 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. 
• Any other plan which gives complete hospital, medical and surgical services. 

D

Deductible: The amount you pay for your covered health services before your health insurance begins to pay. Deductibles apply to a benefit period, typically one year. Learn about deductibles here.
Example: If your plan has a $2,000 annual deductible, you will pay the first $2,000 for covered health care services. After you meet your deductible, your health plan begins sharing the cost of covered services with you. You may still pay coinsurance or other costs, depending on your plan.

Dependent: Anyone who is eligible to be added to or covered by the policyholder’s health insurance plan. This coverage can be for a spouse, partner or child up to age 26.  

Dependent Coverage: The benefits, protections and services under your health insurance that are extended to qualifying dependents.

E

Explanation of benefits (EOBs): A statement showing the total charges for medical services received during a visit, including the cost shares between you and your plan. *EOBs are NOT a medical bill. 

Emergency Medical Condition - A medical problem with sudden, severe symptoms that requires immediate treatment to prevent serious harm. A person with average health knowledge could reasonably expect the condition to:

• Put a person's health at serious risk.
• Put an unborn child's health at serious risk.
• Result in serious damage to the person's body and how his or her body works.
• Result in serious damage of a person's organ or any part of the person.

Emergency room care: Care or services received in an emergency room (ER). 

Experimental or investigational drug, device, medical treatment or procedure: Services that are not approved by the U.S. Food and Drug Administration (FDA) or are not considered the standard of care due to their unknown safety or efficacy.

F

Flexible Spending Account (FSA): An employer-sponsored tax-advantage account that lets you set aside pre-tax money for future, common medical costs and dependent care. FSA funds must be used by the end of the term year or what's leftover will be sent back to the employer. Ask your employer's Human Resources team to provide a list of FSA-qualified costs that you can purchase directly or be reimbursed for. A few common FSA-qualified costs include: 

• Copays for provider visits, chiropractor and psychological sessions 
• Hospital fees, medical tests and services (like X-rays and screenings) 
• Physical rehabilitation 
• Dental and orthodontic expenses (like cleanings, fillings and braces) 
• Inpatient treatment for alcohol or drug addiction 
• Vaccines (immunizations) and flu shots 

Formulary: An approved list of both generic and brand-name prescription drugs covered by a prescription drug plan or another insurance plan offering prescription drug benefits. Also called a drug list. 

Full-time employee (FTE): An employee who works an average of at least 30 hours per week for more than 120 days a year. 

G

Generic drug: A prescription drug that contains the same active-ingredient formula as a brand-name drug but usually costs less. Generic drugs are rated by the FDA to be just as safe and effective as brand-name drugs, 

Group health plan: A health insurance plan offered by an employer or employee organization that provides coverage to employees and their families. 

H

Health Maintenance Organization (HMO): A type of health insurance plan that offers healthcare services only with specific HMO providers. Under an HMO plan, you might have to choose a primary care provider who will refer you to other HMO specialists when needed. Services from providers outside the HMO plan are rarely ever covered except for emergencies.  

Health plan: An insurance plan that defines covered healthcare services, benefits and products, as well as your costs and how they are shared. Examples include HMOs and PPOs. 

Health Reimbursement Account (HRA): An account that lets an employer set aside funds for healthcare costs. These funds can be used to reimburse covered services paid for by employees who take part. An HRA has tax benefits for both employers and employees.  

Health Savings Account (HSA): An employer-sponsored tax-advantage account that lets you set aside pre-tax money for future qualified medical costs. Money deposited into the account is not subject to federal income tax when deposited. Funds can build up and be used from year to year without the risk of being sent back to the employer. HSAs must be paired with certain high-deductible health plans (HDHP).  

Health assessment: A health survey that measures current health, health risks and quality of life. 

HIPAA (Health Insurance Portability and Accountability Act): An act passed by Congress in 1996 that provides a person with the right to access their protected health information (PHI) when requested. Additionally, under the HIPAA Privacy Rule, healthcare providers, organizations and even business associates are required under law to protect and confidentially handle your PHI when it’s transferred, received or shared. 

Hospitalization: Admission to a hospital for care, typically involving an overnight stay. 

I

In-network: Refers to a network of healthcare providers, facilities (such as a hospital), clinic or pharmacy that have a contract with a health insurance plan to provide services at a discounted rate. 

Inpatient care: Care or services that require admission to a hospital or other healthcare facility, such as a skilled nursing facility. 

Institution (institutional): A hospital or other specific facility that assumes total care of the person who is admitted. An institution is considered a residential facility. 

L

Legal guardian: A person legally authorized to care for and make decisions for a child or incapacitated adult. A legal guardian may be a parent or someone appointed by a court.  

Long-term care: Medical and non-medical support for people of any age who needs help with daily activities of daily living, such as eating, bathing or dressing. Care may be provided at home, in an assisted living facility or in a skilled nursing home. 

M

Marketplace: Shorthand for the “Health Insurance Marketplace®” and sometimes known as the “exchange”, this federally run service helps people, families and small businesses enroll in or change an affordable health insurance plan. Shopping and enrollment can be done online, by phone or with in-person help from an agent or broker. 

Maximum out-of-pocket: The limit for how much a member pays per year for healthcare services covered by a plan. Once you reach this limit, all covered services are paid 100%. 

Medical care: Medical services received from a healthcare provider or facility to treat a condition. 

Medically necessary (or medical necessity): Services, supplies, equipment or prescription drugs that are needed to diagnose or treat an injury, illness, disease or medical condition. Also, an insurer must decide if this care is: 

• Accepted as standard medical practice. It can't be experimental or investigational. 
• Not just for your convenience or the convenience of a healthcare provider. 
• The right amount or level of service that can be given to you. 

Example: Inpatient care is medically necessary if your condition can't be treated properly as an outpatient service. 

Medicare: A federal health insurance program for people ages 65 or older and certain younger people with qualifying conditions that helps cover the cost for certain healthcare expenses. 

Medicare Advantage (Part C): A type of Medicare plan offered through private companies that combines the benefits of both Medicare Part A and Medicare Part B. Medicare Advantage often includes prescription drug coverage and can include additional health benefits, like vision, dental and wellness benefits, though it may require a monthly premium. 

Medicare Part A: A program that helps pay for care you receive in a hospital without costing an additional premium. Coverage includes: 

• Inpatient hospital care 
• Skilled nursing facilities following a hospital stay 
• Hospice care 
• Some home healthcare 

Medicare Part B: A program that covers preventive and medically necessary services and supplies not covered by Medicare Part A. Coverage includes: 

• Services from doctors and other healthcare providers 
• Outpatient hospital care (when medically necessary) 
• Home healthcare 
• Durable medical equipment, like wheelchairs, walkers and hospital beds 
• Preventive services, like screenings, vaccines and yearly wellness visits 

Medicare Part D: An optional benefits program for prescription drug coverage. You can join by purchasing a plan and adding it to your Original Medicare Plan or enroll in a Medicare Advantage plan that includes Part D coverage. 

N

Network/network plan: A system of healthcare providers, facilities and pharmacies that are contracted to provide members of a health insurance plan with services and supplies at a discounted price. 

Network provider/In-network provider: A healthcare provider who is part of a health plan’s network. 

Non-covered charges: Charges for services and supplies that are not covered under a health plan. Examples of non-covered charges may include services like acupuncture, weight loss surgery or marriage counseling. Consult your plan for more information. 

O

Open Enrollment Period (OEP): The yearly period from Nov. 1 until Jan. 15 when people are eligible to enroll in a Marketplace health insurance plan. You may still be able to enroll in Marketplace coverage outside of Open Enrollment if you have qualifying life events, such as getting married, having a baby or loss of employment.  

Original Medicare: Federal health insurance that includes hospital coverage (Part A) and medical coverage (Part B), but not prescription drugs or additional benefits. After you meet your deductible, Medicare pays its share of the approved amount, and you pay the remaining coinsurance. 

Out-of-network: Refers to healthcare providers, facilities, such as a hospital, clinic or pharmacy, that don’t have a contract with your health insurance plan and may charge full price for services. 

Out-of-network provider: A healthcare provider who is not part of a plan’s network. Costs associated with out-of-network providers may be higher or not covered by your plan. Consult your plan for more information. Also called “non-network provider.” 

Out-of-pocket cost: The amount you pay for healthcare services. Costs vary by plan, and each plan sets a maximum out-of-pocket limit. Consult your plan for details. 

Outpatient care: Care or services in a hospital or other healthcare facility that doesn’t require a formal admission or overnight stay, including testing, medical treatment or surgery. 

P

Part-time employee: An employee who works an average of less than 30 hours per week. 

Policyholder: The person or business that is the owner of an insurance policy, paying and managing the account. 

PPO (Preferred Provider Organization): A type of insurance plan that offers more extensive coverage with fewer restrictions for in-network healthcare providers. A PPO health insurance plan still offers some coverage for providers who are not part of the plan's network. PPO plans generally offer more flexibility than HMO plans, but premiums tend to be higher. 

Prescription drug(s): Medication that federal or state law requires a prescription to obtain. 

Premium: The amount paid to an insurance provider each month to maintain coverage. Some health plans have lower premiums in lieu of higher deductibles or higher premiums in lieu of lower deductibles. 

Preventive services: Routine healthcare, including checkups, screenings and counseling that helps prevent disease and other health problems or reduce the effects of chronic conditions. 

Pre-existing condition: A medical condition or chronic illness diagnosed before your new health coverage began, such as asthma, diabetes, epilepsy or cancer. 

Primary care provider (PCP): A healthcare professional, such as a doctor, nurse practitioner, clinical nurse specialist or physician assistant, who provides and coordinates care and helps patients access healthcare services.  

Protected Health Information (PHI): Any personal healthcare data or information that can identify an individual, such as name, address, social security number, medical records, lab results or insurance claim forms. 

Provider (healthcare provider): A hospital, facility, doctor or other licensed healthcare professional. 

Q

Qualifying Life Event (QLE): A change in your living situation that can make you eligible for a Special Enrollment Period, allowing you to enroll in health insurance outside Open Enrollment. There are four basic types of QLEs: 

1. Loss of health coverage from turning 26 years old and losing coverage through a parent’s plan, losing existing health coverage, including job-based, individual and student plans or losing eligibility for Medicare, Medicaid or other insurance programs. 
2. Changes in household, such as getting married or divorced, having a baby or adopting a child or a death in the family. 
3. Changes in residence, such as moving to a different ZIP code or county. 
4. Other qualifying events, such as changes to your income that affect coverage you qualify for, becoming a U.S. citizen, leaving incarceration. 

Quality ratings (“star” ratings): A rating system from one to five stars used to compare healthcare plans, with a 5-star rating considered excellent. Plans are evaluated on the quality of healthcare services, member experience, medical care and plan administration. 

R

Referral: A written request from your PCP to see a specialist or receive certain medical services. Many HMOs require a referral for care from providers other than your PCP.  

S

Special Enrollment Period (SEP): A limited time frame that occurs outside of Open Enrollment Period when you can sign up for health insurance. Certain qualifying life events allow you to qualify for SEP, such as moving, getting married, having a baby or adopting a child and losing health coverage. 

Short-term insurance: A type of health insurance that offers temporary coverage for certain services for a set time (6 months or less). This can be if you’re between health plans, outside enrollment periods or when coverage is needed in an emergency. Learn more about short-term health insurance plans. 

Specialist: A provider that focuses on a specific area of medicine to diagnose, manage, prevent or treat certain symptoms of conditions. 

T

Term year: See benefit period. 

TTY: A TTY (teletypewriter or teletype) is a communication device used by people who are deaf, hard-of-hearing or have speech impairment. Electrical signals (beeping sounds) are converted into letters, which are then displayed on a screen. 

U

Urgent care: Immediate treatment for sudden, non-life-threatening illnesses, injuries or conditions that do not require an emergency room visit. 

Urgent care provider: A provider who treats conditions requiring prompt care but not emergency treatment. 

W

Wellness program: A program offered by your employer or health insurance plan aimed at promoting and improving health and fitness through rewards, discounts, memberships and other incentives via participation. Examples include programs, such as smoking cessation, weight management or gym memberships.