The percentage of total average costs for covered benefits that a plan will cover. For example, if a plan has an actuarial value of 70%, on average, you would be responsible for 30% of the costs of all covered benefits. However, you could be responsible for a higher or lower percentage of the total costs of covered services for the year, depending on your actual health care needs and the terms of your insurance policy.
Aggregate Family Deductible
In a family plan with an aggregate deductible, an individual deductible is not embedded in the family deductible. Before medical bills can be covered, the entire amount of the deductible must be met. It can be met by one family member or by a combination of family members.
Maximum amount on which payment is based for covered health care services. This may be called “eligible expense,” “payment allowance” or “negotiated rate.” If your health care provider charges more than the allowed amount, you may have to pay the difference. (See Balance Billing.)
Annual Household Income
The total income for a family in a calendar year.
A cap on the benefits your insurance company will pay in a year while you’re enrolled in a particular health insurance plan. Caps are sometimes placed on particular services such as prescriptions or hospitalizations. Annual limits may be placed on the dollar amount of covered services or on the number of visits that will be covered for a particular service. After an annual limit is reached, you must pay all associated health care costs for the rest of the year.
A request for your health insurer or plan to review a decision or a grievance again.
When a provider bills you for the difference between the provider’s charge and the allowed amount. For example, if the provider’s charge is $100 and the allowed amount is $70, the provider may bill you for the remaining $30. A preferred provider, one that is participating in your insurance company’s provider network, may not balance bill you for covered services.
The health care items or services covered under a health insurance plan. Covered benefits and excluded services are defined in the health insurance plan’s coverage documents.
The organization of your treatment across several health care providers. Medical homes and Accountable Care Organizations are two common ways to coordinate care.
Children’s Health Insurance Program (CHIP)
An insurance program jointly funded by states and the federal government that provides health insurance to low-income children and, in some states, pregnant women in families who earn too much income to qualify for Medicaid but cannot afford to purchase private health insurance coverage. In Colorado, this program is called Child Health Plan Plus.
Chronic Disease Management
An integrated care approach to managing illness that includes screenings, checkups, monitoring and coordinating treatment, and patient education. It can improve your quality of life while reducing your health care costs if you have a chronic disease by preventing or minimizing the effects of a disease.
A request for payment that you or your health care provider submits to your health insurer after you receive items or services you think are covered.
A federal law that may allow you to temporarily keep health coverage after your employment ends, after you lose coverage as a dependent of the covered employee, or as a result of another qualifying event. If you elect COBRA coverage, you pay 100% of the premiums, including the share the employer used to pay, plus a small administrative fee.
A kind of cost-sharing in which the insurance company pays for a percentage of the cost of medical treatment, and the patient pays the rest. This is separate from deductibles and premiums. For example, if the health insurance or plan’s allowed amount for an office visit is $100 and you’ve met your deductible, your co-insurance payment of 20% would be $20. The health insurance or plan pays the rest of the allowed amount.
Colorado Young Adult (CYA) Plan
The Colorado Young Adult (CYA) Plan provides coverage for only high-cost services, such as medical catastrophe, or when medical costs exceed a very high deductible. This plan is available to individuals under age 30 at the beginning of the plan year, and may also be available for certain Coloradans with low incomes. The CYA plan is also referred to as a catastrophic plan, or catastrophic coverage, as defined by the Affordable Care Act.
A group health plan that was created – or an individual health insurance policy that was purchased – after March 23, 2010, and that is not compliant with the 2010 federal health law. These plans are allowed to continue through December 31, 2015. Continuation plans are not limited benefit plans, though they may not cover all required benefit categories as required by the Affordable Care Act.
A fixed amount (for example, $15) you pay for a medical visit or for medication that is covered under your health plan, usually when you receive the service. This is considered part of your out-of-pocket costs, separate from premiums and deductibles.
The share of costs covered by your insurance that you pay out of your own pocket. This term generally includes deductibles, coinsurance and copayments, or similar charges, but it doesn’t include premiums, balance billing amounts for non-network providers, or the cost of non-covered services.
The amount you must pay for health care services before your health insurance company will start paying benefits. For example, if your deductible is $1,000, your plan won’t pay anything until you’ve met your deductible for covered health care services that are subject to the deductible. The deductible may not apply to all services.
Dependents are typically children or spouses/partners of insured individuals. When individuals or employees buy health insurance, they usually have the choice to buy a plan that covers their spouse, partner or children. Some plans may allow other individuals in their care to be covered under the plan.
A limit in a range of major life activities. This includes limits on activities such as seeing, hearing, and walking and on tasks such as thinking and working. Because different health insurance programs may have different disability standards, please check the program you’re interested in for its disability standards.
Embedded Family Deductible
In a family plan with an embedded deductible, the plan contains two components; an individual deductible and a family deductible. Both deductible components allow each member of the family plan the opportunity to have medical bills covered prior to the entire dollar amount of the family deductible being met. The individual deductible is embedded in the family deductible.
Evaluation of an emergency medical condition and treatment to keep the condition from getting worse.
Essential Health Benefits
A set of health care service categories that must be covered by Qualified Health Plans and certain plans starting in 2014. Essential health benefits must include items and services within at least the following 10 general categories: ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care.
Health care services that your health insurance or plan doesn’t pay for or cover.
Federal Poverty Level (FPL)
A measure of income level issued annually by the Department of Health and Human Services. Federal poverty levels are used to determine your eligibility for certain programs and benefits. The 2013 Federal Poverty Level for an individual is $11,490 in yearly income and $23,550 for a family of four.
Fee for Service
A method in which doctors and other health care providers are paid for each service performed. Examples of services include tests and office visits.
Flexible Benefits Plan
A benefit program that offers employees a choice between various benefits including cash, life insurance, health insurance, vacations, retirement plans and child care. Although a common core of benefits may be required, you can choose how your remaining benefit dollars are to be allocated for each type of benefit from the total amount promised by the employer. Sometimes you can contribute more for additional coverage. Also known as a Cafeteria plan or IRS 125 Plan.
Flexible Spending Account (FSA)
An arrangement through an employer to pay for out-of-pocket medical expenses with tax-free dollars. These expenses include insurance copayments and deductibles, prescription drugs, insulin and medical devices. You decide how much of your pre-tax wages you want taken out of your paycheck and put into an FSA. You don’t have to pay taxes on this money. Your employer’s plan sets a limit on the amount you can put into an FSA each year.
There is no carry-over of FSA funds. This means that FSA funds you don’t spend by the end of the plan year can’t be used for expenses in the next year. An exception is if your employer’s FSA plan permits you to use unused FSA funds for expenses incurred during a grace period of up to 2.5 months after the end of the FSA plan year.
Flexible Spending Accounts are sometimes called Flexible Spending Arrangements.
A list of drugs your insurance plan covers. A formulary may include how much you pay for each drug. If the plan uses “tiers,” the formulary may list which drugs are in which tiers. Formularies may include both generic drugs and brand-name drugs.
Grandfathered Health Plan
As used in connection with the 2010 federal health law: A group health plan that was created—or an individual health insurance policy that was purchased on or before March 23, 2010. Grandfathered plans are exempted from many changes required under the federal health law. Plans or policies may lose their “grandfathered” status if they make certain significant changes that reduce benefits or increase costs to consumers. A health plan must disclose in its plan materials whether it considers itself to be a grandfathered plan and must also advise consumers how to contact the U.S. Department of Labor or the U.S. Department of Health and Human Services with questions.
A complaint that you communicate to your health insurer or plan.
A requirement that health plans must allow you to sign up for coverage, regardless of health status, age, gender, or other factors that might predict how much you use health services. Guaranteed issue doesn’t limit how much you can be charged if you enroll.
A requirement that your health insurance issuer must offer to renew your policy as long as you continue to pay premiums. Guaranteed renewal doesn’t limit how much you can be charged if you renew your coverage.
Health care services that help a person keep, learn or improve skills and functioning for daily living. Examples include therapy for a child who isn’t walking or talking at the expected age. These services may include physical and occupational therapy, speech-language pathology and other services for people with disabilities in a variety of inpatient and/or outpatient settings.
A contract that requires your health insurer to pay some or all of your health care costs in exchange for a premium.
Health Maintenance Organization (HMO)
A type of health insurance plan that usually limits coverage to care from doctors who work for or contract with the HMO. It generally won’t cover out-of-network care except in an emergency. An HMO may require you to live or work in its service area to be eligible for coverage. HMOs often provide integrated care and focus on prevention and wellness.
Health Reimbursement Account (HRA)
Health Reimbursement Accounts (HRAs) are employer-funded group health plans from which employees are reimbursed tax-free for qualified medical expenses up to a fixed dollar amount per year. Unused amounts may be rolled over to be used in subsequent years. The employer funds and owns the account. Health Reimbursement Accounts are sometimes called Health Reimbursement Arrangements.
Health Savings Account (HSA)
A medical savings account available to taxpayers who are enrolled in a qualified High Deductible Health Plan. The funds contributed to the account aren’t subject to federal income tax at the time of deposit. Funds must be used to pay for qualified medical expenses. Unlike a Flexible Spending Account (FSA), funds roll over year to year if you don’t spend them.
Services to provide comfort and support for persons in the last stages of a terminal illness and their families.
Hospital Outpatient Care
Care in a hospital that usually doesn’t require an overnight stay.
Home Health Care
Health care services a person receives at home.
The percent (for example, 20%) you pay of the allowed amount for covered health care services to providers who contract with your health insurance or plan. In-network co-insurance usually costs you less than out-of-network co-insurance.
A fixed amount you pay for covered health care services to providers who contract with your health insurance or plan. In-network co-payments usually are less than out-of-network co-payments.
Insurance Cooperatives (Co-ops)
A non-profit entity created to provide insurance and owned by those it insures. Cooperatives can be formed at a national, state or local level, and can include doctors, hospitals and businesses as member-owners. Colorado’s insurance cooperative is called the Colorado HealthOP.
Limited Benefit Plan
A health insurance plan that only covers certain benefit categories (such as a hospital indemnity plan, which only covers hospitalization-related costs). This type of coverage is not considered minimum essential coverage, and consumers enrolled in a limited benefit plan will be required to have supplemental insurance in order to have adequate coverage.
Services that include medical and non-medical care provided to people who are unable to perform basic activities of daily living such as dressing or bathing. Long-term services can be provided at home, in the community, in assisted living facilities or in nursing homes. Individuals may need long-term care at any age. Medicare and most health insurance plans don’t pay for long-term care.
A state-administered health insurance program for low-income families and children, pregnant women, the elderly, people with disabilities, and in some states, other adults. The federal government provides a portion of the funding for Medicaid and sets guidelines for the program. States also have choices in how they design their program. Colorado’s Medicaid program is operated by the Colorado Department of Healthcare Policy and Financing.
Medical Loss Ratio (MLR)
A basic financial measurement of how much of the premium is used to pay for medical care versus overhead. . If an insurer uses 80 cents out of every premium dollar to pay its customers’ medical claims and activities that improve the quality of care, the company has a medical loss ratio of 80%. A medical loss ratio of 80% indicates that the insurer is using the remaining 20 cents of each premium dollar to pay for overhead expenses, such as administrative costs, salaries, marketing and agent commissions, and/or retaining some as profit. Federal law sets minimum medical loss ratios for different markets, as do some state laws.
A federal health insurance program for people age 65 or older and certain younger people with disabilities. It also covers people with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant, sometimes called ESRD).
Minimum Essential Coverage
The type of coverage an individual needs to have to meet the individual responsibility requirement under federal law. This includes individual market policies, job-based coverage, Medicare, Medicaid, CHIP, TRICARE and certain other coverage.
The facilities, providers and suppliers your health insurer or plan has contracted with to provide health care services.
Open Enrollment Period
The period of time set up to allow you to choose from available plans, usually once a year.
The percent (for example, 40%) you pay of the allowed amount for covered health care services to providers who do not contract with your health insurance or plan. Out-of-network co-insurance usually costs you more than in-network co-insurance.
A fixed amount you pay for covered health care services from providers who do not contract with your health insurance or plan. Out-of-network co-payments usually are more than in-network co-payments.
Your expenses for medical care that aren’t reimbursed by insurance. Out-of-pocket costs typically include deductibles, coinsurance and copayments for covered services plus all costs for services that aren’t covered.
Out-of-Pocket Limit (OOP)
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. This does not include your premium, balance-billed charges or health care your health insurance or plan doesn’t cover. Some health plans don’t count all of your co-payments, deductibles, co-insurance payments, out-of-network payments or other expenses toward this limit.
Plan Year/Policy Year
The 12-month period when a health plan provides coverage. This 12-month period may not be the same as the calendar year. To find out when your plan year begins, you can check your plan documents or ask your employer. This can sometimes be called a ‘policy year.’
Point-of-Service (POS) Plan
A type of plan in which you pay less if you use doctors, hospitals and other health care providers that belong to the plan’s network. POS plans may require you to get a referral from your primary care doctor in order to see a specialist.
A medical provider who has a contract with your health insurer or plan to provide services to you at a discount. Check your policy to see if you’re allowed to see all preferred providers or if, instead, your health insurance or plan has a “tiered” network and you must pay extra to see some providers.
Preferred Provider Organization (PPO)
A type of health plan that contracts with medical providers, such as hospitals and doctors, to create a network of participating providers. You pay less if you use providers that belong to the plan’s network. You can use doctors, hospitals and providers outside of the network for an additional cost.
The amount that must be paid for your health insurance. You and/or your employer usually pay it monthly, but it may sometimes be paid quarterly or yearly.
Routine health care that includes screenings, checkups, and patient counseling to prevent illnesses, disease or other health problems.
Health services that cover a range of prevention, wellness and treatment for common illnesses. Primary care providers include doctors, nurses, nurse practitioners and physician assistants. They often maintain long-term relationships with you and advise and treat you on a range of health related issues. They may also coordinate your care with specialists.
Qualified Health Plan
An insurance plan that is certified by Connect for Health Colorado, provides essential health benefits, follows established limits on cost-sharing (like deductibles, copayments, and out-of-pocket maximum amounts), and meets other requirements.
A process in which state insurance departments to review rate increases before insurance companies can apply them to you. In Colorado, this is conducted by the Colorado Division of Insurance in the Department of Regulatory Agencies.
Health care services that help a person keep, get back or improve skills and functioning for daily living that have been lost or impaired because a person was sick, hurt or disabled. These services may include physical and occupational therapy, speech-language pathology and psychiatric rehabilitation services in a variety of inpatient and/or outpatient settings.
The retroactive cancellation of a health insurance policy. Insurance companies will sometimes retroactively cancel your entire policy if you made a mistake on your initial application when you buy an individual market insurance policy. Under federal law, rescission is illegal except in cases of fraud or intentional misrepresentation of facts as prohibited by the terms of the plan or coverage.
Rider (exclusionary rider)
A rider is an amendment to an insurance policy. Some riders will add coverage (for example, if you buy a maternity rider to add coverage for pregnancy to your policy.) In most states today, an exclusionary rider is an amendment, permitted in individual health insurance policies that permanently prohibits coverage for a health condition, body part or body system. Under federal law, exclusionary riders cannot be applied to coverage for children. Starting in 2014, no exclusionary riders will be permitted in any health insurance.
A type of plan used primarily by larger companies where the employer collects premiums from enrollees and takes on the responsibility of paying employees’ and dependents’ medical claims. These employers can contract for insurance services such as enrollment, claims processing, and provider networks with a third party administrator, or they can be self-administered.
Special Enrollment Period
A time outside of the open enrollment period during which you and your family have a right to sign up for health coverage. This can be allowed in the event of certain life events, such as marriage, the birth of a child, and loss of a job.
Summary of Benefits and Coverage (SBC)
An easy-to-understand, standardized form that summarizes the benefits and coverage available for each health plan. This information allows customers to make “apples-to-apples” comparisons when looking at different plans. A link to each plan’s SBC is available in the Marketplace when you’re comparing plans
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 for providers that are not contracted with the insurance company.
Health care or services provided by hospitals or health care providers that don’t get reimbursed. Often uncompensated care arises when people don’t have insurance and cannot afford to pay the cost of care.
Waiting Period (Job-based coverage)
The time that must pass before coverage can become effective for an employee or dependent, who is otherwise eligible for coverage under a job-based health plan.
Well-baby and Well-child Visits
Routine doctor visits for comprehensive preventive health services that occur when a baby is young and annual visits until a child reaches age 21. Services include physical exam and measurements, vision and hearing screening, and oral health risk assessments.
A program intended to improve and promote health and fitness that’s usually offered through the work place, although insurance plans can offer them directly to their enrollees. The program allows your employer or plan to offer you premium discounts, cash rewards, gym memberships and other incentives to participate. Some examples of wellness programs include programs to help you stop smoking, diabetes management programs, weight loss programs, and preventative health screenings