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Glossary

COBRA

Federal legislation that requires employers with 20 or more employees to offer employees (and/or dependents) to continue coverage under the group plan for eighteen to 36 months.

In California, Cal-COBRA applies these regulations to employers with 2 or more eligible employees.

Co-Insurance

The percentage of covered expenses an insured person shares with the carrier. (i.e., for an 80/20 plan, the health plan member's co-insurance is 20%.) Co-insurance starts after the insured pays any deductible and is only required up to the plan's stop loss amount. (see "stop loss.")

Co-pay/Co-payment

The amount a subscriber must pay toward the cost of a particular benefit. For example, a plan might require a $10 co-pay for each doctor's office visit, or $250 for a hospital admission fee.

Deductible

Amount of covered medical bills that must be paid by subscriber before the insurance company starts sharing expenses. Unless otherwise noted, deductibles are on a calendar year basis.

Deductible WAIVED

Some benefits are available with the deductible set aside. These typically include well care exams for adults and children, prescription drugs, and office visit fees.

Health Maintenance Organization (HMO)

An insurance that stresses affordable benefits for preventive care, early diagnosis and treatment on an outpatient basis. Typical HMO benefits have no deductible for out patient care. The office co payment usually covers all services performed by the doctor. Prescription drugs are included, and hospital/surgery care is greatly discounted. Most HMO's require enrollees to see a particular primary care physician (PCP), who acts as the conduit to the medical system. The PCP usually is associated with a larger number of affiliated doctors in a medical group. The PCP will refer the subscriber to a specialist if deemed necessary.

HMO networks are smaller than PPO networks. This restriction in access is balanced by the affordable benefits.

Network

A group of doctors, hospitals and other providers contracted to provide services to insured individuals for less than their usual fees. Provider networks can cover large geographic markets and/or a wide range of health care services. If a health plan uses a preferred provider network, insured individuals typically pay less for using a network provider.

Out-of-Network

Describes a provider or health care facility which is not part of a health plan's network. Insured individuals usually pay more when using an out-of-network provider, if the plan uses a network.

Out-of-Pocket Maximum

This is the “insurance” part of a health plan, because it defines the ceiling on the amount you have to pay for catastrophic expenses through deductibles and coinsurance It is the amount of expenses paid by an individual after which the plan pays 100% for the balance of the year. Amounts in excess of scheduled allowances and other non-covered expenses do not count toward the out of pocket maximum. Family out of pocket maximums can be aggregate (the total expenses by all family members added together) or separate (a certain number of family members must reach their individual out of pocket maximum to initiate the benefit). Quotes display family aggregate out of pocket maximums as a fixed dollar amount and separate out of pocket maximums as the number of out of pocket maximums required per family. Deductibles are included in the out of pocket maximum. (also known as "stop-loss")

Preferred Provider Organization (PPO)

A network or panel of physicians and hospitals that contracts with an insurance company to discount its normal fees in exchange for a source of patients. The insured individual can choose from among the physicians on the panel, generally without any referral. PPO plans allow you to access specialists on your own. Typical PPO benefits have deductibles and/or coinsurance requirements and include prescription coverage.

Schedule of allowable charges

Pre-determined amount the carrier will pay for services provided by non-contracted provider. Generally carriers set the allowable fee schedule at the same level as the negotiated rate for contracting providers. Since there is no contractual obligation on the part of non-contracting providers to accept the fee schedule, the patient is responsible for all charges in excess of the schedule.

Short-term medical

Temporary health coverage for an individual for a short period of time, usually from 30 days to six months.

Stop-loss

The dollar amount of claims filed for eligible expenses at which the insurance begins to pay at 100% per insured individual. Stop-loss is reached when an insured individual has paid the deductible and reached the out-of-pocket maximum amount of co-insurance. (also known as "Out-of-Pocket Maximum")

UCR

Short for usual, customary, and reasonable, which is a method that some carriers use to determine allowable charges for non-contracted providers. Usual means the charge that a given provider usually charges, customary means what is generally charged in the geographic area, and reasonable takes into account extenuating circumstances. Different carriers have various methods of calculating UCR.