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Health Insurance Glossary

Home > Health Insurance Glossary

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Health insurance terms, in plain English

Deductibles, coinsurance, HSAs and more, explained without the jargon. Search for a term or jump to a letter, and call us if something still doesn’t make sense.

48 terms

A

Allowed amount
The most a plan will pay for a covered service. In-network providers agree to accept it; out-of-network providers may bill you for the difference.
Appeal
A request for your plan to review a decision to deny a claim or a service. You have the right to an internal appeal and, in many cases, an outside review.

B

Balance billing
When an out-of-network provider bills you for the difference between their charge and the plan's allowed amount. Federal rules now limit this for most emergency care and some in-network hospital visits.
Benefit year
The 12-month period your plan's benefits, deductible and out-of-pocket maximum run on. For many plans it's the calendar year.

C

Claim
A request for payment that you or your provider send to your plan after you get care.
COBRA
A federal law that lets many employees and their families keep employer group coverage for a limited time after leaving a job or another qualifying event, usually by paying the full premium.
Coinsurance
Your share of a covered service's cost, shown as a percentage, after you meet your deductible. For example, with 20% coinsurance you pay $20 of a $100 allowed amount.
Copayment (copay)
A set dollar amount you pay for a covered service, like $30 for a doctor visit. Copays often apply even before the deductible is met.
Cost sharing
The part of covered costs you pay yourself, such as deductibles, copays and coinsurance. Premiums are not cost sharing.
Creditable coverage
For Medicare Part D, prescription coverage expected to pay at least as much as standard Part D. Having it helps people avoid a late enrollment penalty.

D

Deductible
What you pay for covered services each year before your plan starts to share costs. Many plans cover preventive care before the deductible.
Dependent
A family member covered under your plan, such as a spouse or child. Children can generally stay on a parent's plan until age 26.
Drug list (formulary)
The list of prescription drugs your plan covers, usually sorted into cost tiers.

E

Embedded deductible
In a family plan, each person has their own deductible inside the family deductible. Once one person meets theirs, the plan starts sharing that person's costs.
EPO (Exclusive Provider Organization)
A plan that covers care only from providers in its network, except emergencies. Referrals usually aren't required.
Essential health benefits
Ten categories of care that individual and small group plans must cover, including hospital stays, prescriptions, maternity and preventive care.
Explanation of Benefits (EOB)
A statement from your plan after a claim, showing what the provider charged, what the plan paid and what you may owe. It isn't a bill.

F

Flexible Spending Account (FSA)
An employer-sponsored account you fund with pre-tax pay to cover eligible medical costs. Most unused money is lost at year end, though some plans allow a small carryover or grace period.

G

Generic drug
A drug with the same active ingredient as a brand-name drug, usually at a much lower cost.
Grace period
A short window after a missed premium payment before coverage ends. The length depends on your plan.

H

HDHP (High Deductible Health Plan)
A plan with a higher deductible and usually a lower premium. If it meets IRS rules, it can be paired with a Health Savings Account.
Health Reimbursement Arrangement (HRA)
An employer-funded account that reimburses employees for eligible medical costs. The employer owns the account and sets the rules.
Health Savings Account (HSA)
A tax-advantaged savings account paired with an HSA-eligible HDHP. The money is yours to keep, rolls over each year and goes with you if you change jobs.
HMO (Health Maintenance Organization)
A plan that covers care from its network and usually asks you to choose a primary care provider and get referrals to see specialists.

I

In-network
Doctors, hospitals and other providers that contract with your plan, usually at lower costs to you.

L

Level-funded plan
An employer plan with steady monthly payments that funds claims through a set fund, with stop-loss protection. If claims come in low, some money may come back to the employer.

M

Maximum out-of-pocket
The most you'll pay for covered, in-network care in a plan year. After you reach it, the plan pays 100% of covered services. Premiums don't count toward it.
Medically necessary
Care your plan agrees is needed to diagnose or treat an illness, injury or condition and meets accepted standards of medicine.
Minimum essential coverage
The type of coverage that meets the ACA's requirement to have health insurance, such as most employer, Marketplace and Medicare plans.

N

Network
The group of providers your plan contracts with to deliver care.

O

Open enrollment
The yearly window to sign up for a plan or change coverage. Employer plans set their own dates; the Marketplace has its own period each fall.
Out-of-network
Providers that don't contract with your plan. Care from them usually costs more, and some plans don't cover it at all except emergencies.

P

POS (Point of Service)
A plan that combines HMO and PPO features. You pay less in network and usually need referrals, but you can go out of network for a higher cost.
PPO (Preferred Provider Organization)
A plan that lets you see in-network and out-of-network providers, usually without referrals. You pay less when you stay in network.
Preauthorization (prior authorization)
Approval your plan may require before certain services, procedures or drugs are covered.
Premium
The amount you pay each month to keep your coverage, whether or not you use it.
Premium tax credit
A tax credit that lowers monthly premiums for eligible people who buy coverage through the Health Insurance Marketplace.
Preventive care
Routine care like screenings, checkups and many vaccines. Most plans cover in-network preventive care at no cost to you.
Primary care provider (PCP)
The doctor, nurse practitioner or physician assistant you see first for most care. Some plans require you to choose one.

Q

Qualifying life event
A change like marriage, a new baby, losing other coverage or moving that lets you change your plan outside of open enrollment.

R

Referral
A written order from your primary care provider to see a specialist or get certain services. Many HMO and POS plans require one.

S

Special enrollment period
A window, usually 30 to 60 days after a qualifying life event, when you can enroll or change plans outside of open enrollment.
Specialist
A doctor who focuses on one area of medicine, such as cardiology or orthopedics.
Summary of Benefits and Coverage (SBC)
A short, standard document that explains a plan's costs and coverage, so you can compare plans side by side.

T

Telehealth
Care delivered by video or phone instead of in person. Many plans cover it, often at a lower cost.
Tier
A drug list level that sets your cost. Generics are usually the lowest tier and specialty drugs the highest.

U

UCR (usual, customary and reasonable)
The amount a plan considers typical for a service in your area. It can affect what you pay out of network.

W

Waiting period
The time before a new employee's coverage can start. Under the ACA, it can't be longer than 90 days.

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Sources

Definitions are general. Your plan documents and Summary of Benefits and Coverage explain exactly how your plan works.

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MEDICARE DISCLAIMER:

We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options.

Other Important Disclaimers:  Security First Benefits Corporation is a licensed health insurance agent authorized to market Medicare Insurance Plans. This is a solicitation for insurance.  Please note a sales agent may call as a result of your inquiry for a quote.  The benefit information provided herein is a brief summary, not a comprehensive description of benefits. For more information contact the plan. Limitations, copayments, and restrictions may apply. Please note you have no guarantee issue.

Security First Benefits Corporation is not part of the Federal Medicare System.

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