Glossary

Actuarial Value

Percentage of total average costs for covered benefits that an insurance plan will cover. Example: 70/30 (Insurer pays 70% and Insured pays 30%).


Affordable Care Act

A Federal law designed to increase access and affordability for: 1). Pre-existing conditions for children. 2). Parents can keep children up to the age of 26 on their insurance. 3). End rescinding health coverage. 4). Ban lifetime limits. 5). Begin phasing out annual limits on health coverage. 6). Guarantees availability of coverage and renewability of coverage. 7).Cannot charge higher rates for women or the presently sick and infirmed.


Annual Household Income

The total income for a family in a calendar year.


Benefits

The health care items or services covered under a health insurance plan. Covered benefits and excluded services are defined in the contract.


Catastrophic Plan

Health plans that provide coverage for high-cost services, such as a medical catastrophe.


Claim

A demand for payment under the insurance policy by Insured to Insurer.


COBRA

A federal law that may allow one to temporarily keep health coverage after employment ends or other qualifying event. Expensive as member now pays 100% of premium.


Contract or Policy

A legal document that sets the terms of effecting insurance.


Co-Insurance

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.


Co-Pay

A fixed amount one pays for a medical visit or medication covered under health plan.


Cost-Sharing

Consumers share the costs of services.

  1. Co-pays cannot be higher than cost of service.
  2. Deductibles are the amount owed for health services before health insurance payments begin.
  3. There is a maximum out-of-pocket limit which member may have to pay within a year.
  4. Some services may be excluded.

Coverage

A contractual arrangement where Insurer will make a payment to Insured if certain event occurs. Specifics are determined in the Contract or Policy.


CYA (Cover Your Assets)

Colorado’s insurance plan available for young adults and low income persons.


Deductible

Amount that needs to be paid by Insured before the health insurance company will start paying benefits.


Effective Date

Date contract starts.


Essential Health Benefits

A set of health care service categories that must be covered by Qualified Health Plans starting in 2014.


Excluded Services

Items or conditions not covered in contract or policy.


Formulary

A list of drugs insurance plan covers. They may include both generic drugs and brand-name drugs.


Grandfathered Health Plan

Used in connection with the 2010 federal health law: A group or individual health plan that was created or purchased before March 23, 2010. Plans or policies may lose their “grandfathered status” if certain significant changes that reduce benefits or increase costs to consumers.


Grievance

A complaint that one communicates to health insurer.


Guaranteed Issue

A health insurance policy or contract that must allow person to enroll regardless of; health, age, gender, or other factors including pre-existing conditions. It doesn’t limit how much one can be charged if enrolled.


Guaranteed Renewal

Requirement that health insurance issuer must offer to renew policy as long as premiums are paid.


Health Carrier

Organization that issues health plan or an organization that agrees to provide health services.


Health Insurance

Contract that requires the health insurer to pay some or all of a person’s healthcare costs in exchange for a premium.


HMO (Health Management Organization)

A specified network of doctors and hospitals who work for or contract with the HMO. Office visits are covered only if in the network and a referral from primary provider may be required to visit specialist, except in case of emergency. These plans focus on Wellness and Prevention. An HMO may require members to live or work in its service area.


Health Plan

Specific set of benefits with specific premium provided by employer, group sponsor, individual, or union.


HSA (Health Savings Account)

Created in 2003 so that individuals covered by high-deductible health plans could receive tax-preferred treatment of money saved for medical expenses. Funds will roll over year to year if not spent.


Indemnify

Insurance is designed to restore the policy holder to the same financial condition enjoyed prior to a loss. The intent is to cover the amount of the actual loss only and to avoid paying amounts that allow an insured to profit from a loss situation.


Indemnity Plan

Plan to reimburse the patient and/or provider for expenses incurred.


Insured

The party to an insurance arrangement to whom, or on behalf of whom, the insurance company agrees to indemnify for losses, provide benefits, or render service.


Insurer

Usually an insurance company that sells coverage to a person or organization. The party that assumes risk and agrees to pay claims or provide services.


Managed Care Organizations

HMO – Health Maintenance Organization
PPO – Preferred Provider Organization
POS – Point of Service


Medicaid

A state-administered health insurance program for low-income families and children, pregnant women, the elderly, and people with disabilities. The federal government provides a portion of the funding and sets guidelines for the program. Colorado’s Medicaid program is operated by the Colorado Department of Healthcare Policy and Financing.


Medicare

A federal health insurance program for people age 65 or older and certain younger people with disabilities.


Network

Providers, hospitals, and suppliers that a health insurer has contracted with to provide health care services.


Open Enrollment Period

The period of time set up to choose insurance from available plans. This is usually done annually.


Out-of-Pocket Expense

Expenses paid for medical care that is not reimbursed by health insurance.


POS (Point-of-Service Plan)

Plan that allows one to pay less if doctors, hospital, and other providers are used in the plan’s network.


PPO (Preferred Provider Organization)

Network of selected doctors and hospitals. Enrollees may go out of network, but incur additional costs and higher deductibles.


Pre-existing Condition

A condition of health or physical condition that existed before the policy was issued.


Premiums

Payments made at regular intervals by the Insured to the Insurer to keep a policy or contract in force.


Preventive Services

Routine health care that includes screenings and check-ups to prevent illnesses, disease or other health issues.


Primary Care

Health providers such as doctors, nurses, nurse practitioners and physician assistants that provide a wide range of health care. They coordinate care with specialists.


Qualified Health Plan

Insurance plan that is certified by Connect for Health Colorado that provides essential health benefits.


Rescission

The retroactive cancellation of a health insurance policy. Under federal law, rescission is illegal except in the case of fraud and intentional misrepresentation of facts.


Self-Insured Plan

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, of they can be sel-administered.


UCR (Usual, Customary, and Reasonable)

The amount a person pays for medical services in a geographic area based on what providers in the area usually charge for the same or similar services.


Well-baby and Well-child Visits

Routine doctor visits for comprehensive preventive health services from infancy to 21-years of age.