Common health insurance terms

A

Affordable Care Act (ACA)

Also known as Obamacare or the health care law, ACA is the abbreviated name for the Patient Protection and Affordable Care Act which was signed into law in 2010 under the leadership of President Barack Obama. Its goal is to make health care more affordable and accessible for millions of Americans.

Annual enrollment period (AEP)

Also known as the open enrollment period (OEP), the AEP is the specific time each year when you can buy a health insurance plan, renew the plan you already have, or switch to another plan.

Appeal

An appeal is a member’s formal request for a health insurer to reconsider a decision, such as not to pay a claim.

B

Brand-name drugs

A brand-name drug is a patented, FDA-approved drug. It is usually produced by a single manufacturer with a product name under which the drug is advertised and sold. Newer drugs are generally only available as brand-name drugs. After the original patent expires, a brand-name drug may have a generic equivalent.

C

Chronic conditions

These are ongoing medical conditions, such as asthma or diabetes.

Claim

A claim is a request for payment that you or your health care provider submits to your health insurer when you receive care. Insurance claims are reviewed by your health insurer to make sure they are for covered services. If so, payment will be made in accordance with the terms and conditions of your health insurance plan.

Coinsurance

The percentage you pay for some covered medical services under your health plan. For instance, if your coinsurance is 20 percent, your health insurance company will pay 80 percent of the cost of covered services; you will pay the remaining 20 percent. The amount you pay is typically not based on the full price of the service. It is based on a discounted rate negotiated by your insurance company.

Consolidated Omnibus Budget Reconciliation Act (COBRA)

If you recently lost your job, the Consolidated Omnibus Budget Reconciliation Act may allow you to temporarily maintain the same health benefits you had with your employer’s plan. However, you may be responsible for paying the full monthly premium. It’s available to most employees whose employer coverage has been terminated.

Copay

A copay, or copayment, is a flat fee you pay when you see a doctor or receive other medical services. For example, under your health plan, your copayment could be $20 to see a doctor or $100 to go to the emergency room.

Cost-sharing

Also known as out-of-pocket costs, cost-sharing is the amount of money you pay for a health care service in the form of copays, deductibles, and coinsurance. This is in addition to the premium or monthly rate you pay to be a member of your health plan.

D

Deductible

A deductible is the amount you pay each year before your health plan starts paying for services. For example, if your plan has a $1,000 deductible, you will need to pay the first $1,000 of the costs for the health care services you receive. Once you have paid this amount, your insurance will begin to pay a portion or all of your health care costs, depending on the plan.

Dental insurance

A type of insurance to help offset the cost of oral care, including routine dental check-ups, cleanings, X-rays, and even orthodontics, depending on the plan. Sometimes your medical plan may include dental coverage, and sometimes you may need to purchase a stand-alone plan.

Dependent

A child or other individual for whom a parent, relative, or another person may claim a personal exemption tax deduction. Under the Affordable Care Act, individuals may be able to claim a premium tax credit to help cover the cost of coverage for themselves and their dependents.

Direct Point-of-Service (DPOS)

A Direct Point-of-Service plan allows you to use any doctor or hospital, whether in or out of network. Members pay less when they choose doctors and hospitals in the network and more for out-of-network doctors and hospitals.

Durable medical equipment

Durable medical equipment includes, but is not limited to, hospital beds, crutches, canes, wheelchairs, walkers, peripheral circulatory aids, cervical collars, traction equipment, physiotherapy equipment, oxygen equipment, and ostomy supplies. You should always check with both your provider and your health plan to determine whether an item is considered to be durable medical equipment.

E

Essential Health Benefits

A list of benefits that all individual and small group plans must provide under the Affordable Care Act. This includes many basic services such as doctor visits and hospital stays. Benefits also include preventive care, maternity care, and mental health services.

Exclusive Provider Organization (EPO)

An Exclusive Provider Organization plan only covers services from in-network providers except for emergency care, for which you may use out-of-network providers. However, unlike an HMO, an EPO doesn’t require you to choose a specific primary care physician.

F

Flexible Spending Account (FSA)

This is a tax-advantaged account that allows you to pay for qualified medical expenses not covered by your plan, such as copays, deductibles, coinsurance, and certain services. An FSA is typically funded by you as an employee (but your employer can fund it as well) and does not need to be paired with a health plan. Typically, unused funds left over at the end of the year are returned to your employer, but employer’s rules may vary. Talk to your benefits administrator for more information.

Formulary

A formulary is a list of prescription drugs that your health plan has selected for their medical effectiveness, positive results, and value. You save the most money with your health plan by choosing drugs on the formulary, especially if they are generic drugs.

G

Generic drugs

Generic drugs have the same active ingredients as their brand-name drug counterparts. They usually cost less than brand-name drugs and are considered by the U.S. Food and Drug Administration (FDA) to be just as safe and effective. For individuals who must take several medications regularly, generic drugs offer the advantage of being an affordable alternative to brand-name drugs.

Get Covered New Jersey

Get Covered New Jersey is the state’s official Health Insurance Marketplace. It is where individuals and families can easily shop for and buy health coverage, and it is the only place where qualifying individuals can receive financial help to lower their monthly premiums.

Group health insurance

Health insurance you receive through your employer. Typically, your employer shares some of the costs of the monthly premiums with you.

H

Health Care Law

See Affordable Care Act.

Health Insurance Marketplace

The Health Insurance Marketplace, or Health Insurance Exchange, is a federal government website where you can compare and buy health plans from various health insurers. Some states, such as New Jersey, have their own separate Marketplace. See Get Covered New Jersey about New Jersey’s health insurance marketplace.

Health Maintenance Organization (HMO)

An HMO is a type of health plan that requires you to select a family doctor, often called a primary care physician or PCP. You need a referral from your PCP to see a specialist in the HMO network, such as a cardiologist (heart doctor). Typically, only emergency services are covered if you go outside the HMO’s network of participating providers.

Health Reimbursement Account (HRA)

This is a tax-advantaged account that is typically paired with a high-deductible health plan to help you pay for qualified medical expenses not covered by your plan. Because an HRA account is owned and funded by an employer, it does not travel with you if you change health plans or jobs.

Health Savings Account (HSA)

An HSA helps you set aside money for health expenses on a tax-free basis. You don’t pay taxes on the money you put in, the money you take out if it is used for qualified expenses, or any money you earn on the account. An HSA must be paired with a high-deductible health plan that meets IRS guidelines. Qualified medical expenses include out-of-pocket costs (copays, deductibles, and coinsurance) along with some services not covered by a health plan, such as LASIK surgery. You own your HSA account. So, if you change plans or jobs, the account travels with you.

High-Deductible Health Plan (HDHP)

An HDHP is a health plan with a high minimum deductible that a member must reach before the health plan begins to pay for covered services. Health Reimbursement Accounts and Health Savings Accounts may be paired with an HDHP to help offset the costs of the high deductible. HDHPs typically offer a lower monthly premium than other health plans and give members more control over their health care dollars.

I

In-network providers

These are the doctors, hospitals, labs, and other health care providers who contract with a health insurance company to deliver services to members. They usually charge discounted rates for their services, so you’ll save the most money by visiting in-network providers. Some health plans only cover services received from in-network providers.

Individual and family health insurance

If you don’t have the option of buying health insurance through your employer, you can purchase an individual or family health insurance plan directly from a health insurance company.

International health plans

A type of health insurance to help offset the cost of medical care when traveling or living abroad. See Travel insurance below.

M

Member

A member is a person who is insured by a particular health plan. Members typically receive access to a network of providers, coverage for certain health services, and often tools and wellness programs.

Metallic levels

To make it easier to compare health plans, the federal government created four levels of coverage: platinum, gold, silver, and bronze. Platinum health plans have the highest premiums but have the lowest costs each time you receive care. Bronze health plans have the lowest premiums but have the highest costs each time you receive care. Gold and silver plans offer more of a balance. There is a fifth level of coverage called ”catastrophic,“ but this type of plan is only available to individuals under the age of 30 or who are experiencing extreme financial hardship.

Monthly rate

See Premium.

O

Open enrollment period

See Annual enrollment period (AEP).

Out-of-network providers

These are the doctors, hospitals, labs, and other health care providers who DO NOT have a contract with a health insurance company. Some health plans include coverage (at a higher cost) for out-of-network providers, and some may not cover their services at all.

Out-of-pocket costs

Also known as cost-sharing, these are the expenses you pay for care in the form of copays, deductibles, and coinsurance. This is in addition to the premium or monthly rate you pay to be a member of the health plan.

Out-of-pocket maximum

This is the maximum amount you will have to pay for care during the plan year. It does not include your premium, just out-of-pocket costs such as copays, deductibles, and coinsurance. Any care you receive after you meet your out-of-pocket maximum is covered 100 percent. For example, if your out-of-pocket maximum is $6,000 and you reach this amount, your health plan will cover any additional costs for covered services in full (some exclusions may apply; see your benefits for details).

P

Point-of-Service (POS)

A POS plan combines elements of an HMO and a PPO. As with an HMO, you will need to select a primary care physician. But like a PPO, you can receive medical care from both in- and out-of-network providers. You’ll pay less when you get a referral to an in-network doctor or hospital and more if you choose an out-of-network doctor or hospital.

Precertification

This may also be called preapproval, pre-authorization, or prior authorization. Basically, you may need approval from your health plan before you receive certain tests, procedures, or medications.

Preexisting condition

Any condition, illness, or injury for which medical advice or treatment was recommended or received before a person obtains health insurance. Examples include diabetes, heart disease, and cancer. The ACA guarantees that no one can be denied health insurance due to a preexisting condition.

Preferred Provider Organization (PPO)

A PPO is a type of health plan that allows you to see providers both in and out of the network. You pay lower costs when you see network providers. But you can also see providers outside the network if you’re willing to pay more for their services.

Premium

Sometimes called a monthly rate, a premium is the set dollar amount you pay each month for health insurance.

Preventive care

These are services that are intended to help you stay healthy and/or detect some diseases in the early stages. Examples include flu shots, mammograms, colonoscopies, and cholesterol tests.

Primary care doctor

See Primary care physician (PCP).

Primary care physician (PCP)

A primary care physician (PCP), or primary care doctor, is another term for your family doctor or the doctor you see for most of your health care needs. A PCP focuses on preventive care and treating routine injuries and illnesses and may recommend a specialist as needed.

Providers

These are health care professionals and facilities, such as doctors and hospitals.

Q

Qualifying life events

A change in circumstance that may allow you to enroll in coverage outside of the annual open enrollment period, such as getting married, moving, or losing coverage through an employer.

R

Referral

If you have an HMO plan, your primary care physician (PCP) will need to write you a referral before you see other network providers, such as a dermatologist or a cardiologist.

Retail clinic

A retail clinic is a space within a pharmacy or other retail store that is staffed by nurse practitioners. You can use these clinics to receive care when your doctor is not available and your injury or illness is minor, such as a sore throat, earache, or skin rash. Care at a retail clinic will cost you less than the same care if received in a hospital emergency room.

S

Special enrollment period (SEP)

This is a period of time outside of the open enrollment period in which you may be eligible to apply for an individual and family health plan. If you experienced a qualifying life event, such as getting married, giving birth to or adopting a baby, losing your coverage, or moving into a new service area, you may qualify for a SEP.

Specialist

A specialist is a physician who provides care for certain conditions in addition to the treatment provided by your primary care physician (PCP). For example, you may need to see an allergist for allergies or an orthopedic surgeon for a knee injury.

Specialty services

These are services above and beyond what health plans are required to cover, such as prescription drug, vision, dental, and life and disability insurance. They are also sometimes referred to as ancillary services.

Subsidy

A subsidy is financial assistance offered by the federal government to help offset the costs of individual and family health insurance plans. Depending on family size and household income levels, some people may be eligible for a lower premium, lower cost-sharing, or both. See if you may qualify for a subsidy.

Summary of Benefits and Coverage (SBC)

The federal government requires all health plans to use a standard template to describe the benefits, cost-sharing, and coverage limitations and exceptions included in the plan.

T

Tax credit

A tax credit can be used to lower your monthly insurance payment (premium) when you enroll in a plan through a government health exchange like healthcare.gov or nj.gov/getcoverednj. Your tax credit is based on the estimated income and household information you put on your application.

Telemedicine

Also called virtual care, telemedicine is a secure online video or phone consultation with a health care professional.

Tiered network plan

A tiered network plan divides a provider network into groups called ”tiers“ based on cost and, in many cases, quality measures. You can visit doctors and hospitals from any tier, but you’ll save the most on your out-of-pocket costs if you stay within a particular tier. For example, Tier 1 may offer the lowest out-of-pocket costs, Tier 2 may be a bit higher, and Tier 3 may have the highest out-of-pocket costs. These tiers give you an option to save when you choose to see certain health care providers that offer more cost-effective care.

Travel insurance

A type of insurance to help offset the cost of medical care when traveling or living abroad. Get more information on travel insurance.

U

Urgent care center

A stand-alone clinic where board-certified doctors treat illnesses or injuries requiring immediate medical attention. You can use these centers when your doctor is not available and your health problem is not life-threatening but requires immediate attention, such as a cut requiring stitches or a sprain. Care in an urgent care center will cost you less than the same care if received in a hospital emergency room. For life-threatening conditions, such as severe shortness of breath or chest pain, sudden or unexplained loss of consciousness, severe abdominal pain, or a cut or wound that won’t stop bleeding, go to the closest emergency room.

V

Virtual care

See Telemedicine.

Vision insurance

A type of insurance designed to help offset the costs of eye care, such as routine eye check-ups, glasses, and contacts. Sometimes vision coverage is included with your medical plan, and sometimes you may need to purchase a stand-alone vision plan.