Adjudication

An insurance company’s process of paying or denying submitted claims after comparing them to benefits and coverage requirements.

See “Allowable amount, “Claim,” “Denied claim,” “Exclusion,” and “Explanation of benefits."

Admission

Hospital inpatient care for any medical condition.

Benefit year

The 12-month period used to calculate benefits, premiums, deductibles, and out-of-pocket maximums. Benefit years do not necessarily coincide with calendar years.

Claim

A request for insurer remittance of payment.

See “Adjudication,” “Allowable amount,” “Denied claim,” “Exclusion,” and “Explanation of benefits.”

Coinsurance

The percentage of medical costs for which you are responsible after your deductible has been met.

See “Deductible."

Coordination of benefits

When you are covered by two or more insurance plans, the process of determining which plan will have the primary responsibility of paying a claim and the extent to which the other plan(s) will contribute.

Copayment

A fixed amount you are responsible to pay for a covered medical expense.

See “Covered service/supply.”

Covered service/supply

A medical service or supply that is deemed payable by an insurance company.

See “Non-covered service/supply.”

Date of issue

Date an insurance company issues a policy.

See “Effective date.”

Deductible

The amount of medical costs for which you are responsible before insurance begins to pay. Plans may have an individual deductible (an amount specific to the care of each family member) or a family deductible (an amount toward which all family members’ costs count). Deductibles reset annually.

See “Benefit year."

Denied claim

Benefit-related refusal of an insurance company to honor a request for payment.

See “Adjudication,” “Allowable amount,” “Benefits,” “Claim,” “Exclusion,” and “Non-covered service/supply.”

Dependent

A spouse or child covered by another individual’s policy.

Effective date

Date insurance coverage begins.

See “Date of issue.”

Exclusion

A specific condition, service, place of service, supply, or provider type an insurance policy does not cover.

See “Denied claim,” “Non-covered service/supply,” and “Rider.”

Exclusive provider organization (EPO)

An organization that enters into contracts with healthcare providers and facilities to provide services to its members. Unlike PPOs, EPOs provide no coverage for out-of-network charges, unless there is an emergency.

See “Health maintenance organization (HMO),” “In-network,” “Network,” “Out-of-network,” and “Preferred provider organization (PPO).”

Explanation of benefits (EOB)

An insurance company’s written explanation of how a claim was paid.

See “Adjudication,” “Allowable amount, “Benefits,” “Claim,” “Covered service/supply,” “Denied claim,” “Exclusion,” and “Non-covered service/supply.”

Facility fee

Fee paid to the facility (birth center or hospital) in which you give birth. Not applicable to home births.

See “Professional fee.”

Flexible spending account (FSA)

A tax-advantaged account into which an individual and/or their employer contributes money that is used to pay for certain healthcare costs, including copayments, coinsurance, and deductibles. FSA funds unused by the end of a predetermined time period -- usually a calendar year -- are forfeited.

See “Health savings account (HSA)” and “Health reimbursement arrangement (HRA).”

Gap exception

A waiver from an insurance company that allows you to receive services from an out-of-network provider at an in-network rate. To receive a gap exception, you must demonstrate that the requested services are covered benefits, and that in-network providers are unable or unwilling to provide the requested services.

See "Exclusive provider organization (EPO)," “Health maintenance organization (HMO),” “In-network,” “Network,” “Out-of-network,” and “Preferred provider organization (PPO).”

Group health insurance

Insurance coverage purchased by an employer or other organization for members of a group and their dependents.

See “Individual health insurance.”

Health Insurance Portability and Accountability Act of 1996 (HIPAA)

A federal law that mandates privacy standards to safeguard protected health information (PHI).

See “Protected health information.”

Health insurance

A generic term applying to all types of insurance indemnifying or reimbursing for losses caused by bodily injury or illness, including related medical expenses.

See “Insurance.”

Health maintenance organization (HMO)

An organization that provides healthcare services to its members in exchange for a premium. Unlike PPOs, HMOs provide no coverage for out-of-network charges, unless there is an emergency, and often require a primary care physician’s referral for specialist care.

See “Exclusive provider organization (EPO),” “In-network,” “Network,” “Out-of-network,” and “Preferred provider organization (PPO).”

Health reimbursement arrangement (HRA)

An employer-funded plan that reimburses employees for incurred medical expenses that are not covered by the employer’s standard insurance plan.

See “Health savings account (HSA)” and “Flexible spending account (FSA).”

Health savings account (HSA)

A tax-advantaged account into which an individual and/or their employer contributes money that is used to pay for certain healthcare costs, including copayments, coinsurance, and deductibles. HSAs are designed to complement HSA-qualified high-deductible health plan (HDHPs), which typically offer lower premiums than traditional health plans. With an HSA-qualified HDHP, members can take the money they save on premiums and invest it in an HSA to pay for future qualified medical expenses. HSA funds roll over from year to year.

See “Health reimbursement arrangement (HRA)” and “Flexible spending account (FSA).”

Healthcare sharing ministry

In the United States, an organization that facilitates the sharing of healthcare costs among members who have common ethical or religious beliefs.

In-network

Healthcare providers and facilities who are part of an EPO or PPO insurance plan’s network of preferred providers. Most EPO and PPO plans have different deductibles and coinsurance amounts for in- and out-of-network charges.

See “Exclusive provider organization (EPO),” “Health maintenance organization (HMO),” “Network,” “Out-of-network,” and “Preferred provider organization (PPO).

Individual health insurance

Health insurance plans purchased by individuals for themselves or their families.

See “Group health insurance.”

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Insurance

An economic device transferring risk from an individual to a company and reducing the uncertainty of risk via pooling.

See “Health insurance.”

Insurance policy

Written promise of coverage given to an individual, family, or group of covered individuals that entitles the insured to receive a defined set of benefits in exchange for a defined payment, such as a premium.

Insured

Party or parties covered by an insurance policy.

Lapse

Termination of an insurance policy due to failure to pay the required renewal premium.

Mandated benefits

Insurance coverage required by state or federal law.

Medicaid

A health insurance program created by the Social Security Act of 1965 that pays for medical assistance for low-income individuals and families who cannot afford commercial plans. Medicaid is funded by the federal and state governments, and managed by the states.

Network

The group of providers and facilities with whom an EPO or PPO insurance plan contracts to provider services at discounted rates.

See “Exclusive provider organization (EPO),” “Health maintenance organization (HMO),” “In-network,” and “Out-of-network,” and “Preferred provider organization (PPO).”.

Non-covered service/supply

A medical service or supply deemed unpayable by an insurance company.

See “Covered service/supply.”

Out-of-network

Healthcare providers and facilities who are not part of an EPO or PPO insurance plan’s network of preferred providers. Most EPO and PPO plans have different deductibles and coinsurance amounts for in- and out-of-network charges.

See "Coinsurance," "Deductible,"“Exclusive provider organization (EPO),” “Health maintenance organization (HMO),” “In-network,” “Network,” and “Preferred provider organization (PPO).”

Out-of-pocket maximum

The maximum amount you will pay for medical expenses during a benefit year. The out-of-pocket maximum includes coinsurance, copayments, and deductibles, and excludes premiums. Once this amount is reached, the insurance company will pay all covered medical expenses for the remainder of the benefit year.

See “Benefit year,” “Coinsurance,” “Copayment,” “Deductible,” and “Premium.”

Preferred provider organization (PPO)

An organization that enters into contracts with healthcare providers and facilities to provide services to its members. PPO members can receive covered care from both in-network and out-of-network providers, but pay less for care from in-network providers. Unlike HMOs, PPOs do not require a primary care physician’s referral for specialist care.

See “Exclusive provider organization (EPO),” “Health maintenance organization (HMO),” “In-network,” “Network,” “Out-of-network,” and “Preferred provider organization (PPO).”

Premium

Money charged for insurance coverage.

See “Benefit year.”

Prior authorization

A requirement that a provider obtain from an insurance company the approval to perform a specific service or procedure.

Professional fee

Fee paid to a healthcare provider for a client's care.

See “Facility fee.”

Protected health information (PHI)

Information -- including name, address, birth date, Social Security number, and demographic data, as well as information that relates to an individual’s past, present, or future physical or mental health; the provision of healthcare; and payment for the provision of healthcare -- which reasonably may be used to identify an individual.

See Health Insurance Portability and Accountability Act of 1996 (HIPAA).”

Rider

Expansion of insurance benefits in exchange for an additional premium. A common example is a maternity rider.

See “Benefits” and “Premium.”

TRICARE

Health insurance coverage available to active-duty and retired military personnel and their families.

Verification of benefits (VOB)

The process of contacting an insurance company to verify an insured’s benefit year, coinsurance, deductible, and out-of-pocket maximum, as well as coverage for and exclusions of specific services and places of service, in order to determine estimated costs.

See “Benefit year,” “Coinsurance,” “Deductible,” “Exclusion,” “Out-of-pocket maximum.”