Health Insurance

Actual Charge – means the amount actually paid by or on behalf of the insured and accepted by a provider for services provided. Insurance policies that use these terms must use them as defined in this section.

Affordable Care Act (ACA)Legislation signed by President Obama on March 23, 2010, that made historic changes in the availability and delivery of health insurance, Medicaid and health policy nationwide. Commonly referred to as the health reform law, Patient Protection and Affordable Care Act (PPACA), the Affordable Care Act (ACA) and Obamacare. The final provisions of the law went into effect on January 1, 2014, providing a place where individuals and small business owners can shop and compare health insurance plans before enrolling. This law requires all eligible individuals and certain size businesses to have health insurance or pay a fee or tax.

Approved Charge – The dollar amount on which a health carrier bases its payments and your co-payments. This may be less than the actual charge.

Benefit Maximum – The most a health insurance policy will pay for a specified loss or covered service. The benefit can be expressed as either a period of time, a dollar amount or a percentage of the approved amount. Benefits may be paid to the policyholder or a third party.

Certificate Holder – An employee or other insured named to receive benefits under a group health insurance policy.

Chronic Condition – A continuous or prolonged illness or condition. Examples: asthma, diabetes, varicose veins.

Claim – A request for payment for services.

COBRA – Federal law requiring that workers who end employment for specified reasons have the option of purchasing group insurance through the employer for a limited period of coverage (usually 18 months, but in some cases 29 months or 36 months).

Conditionally Renewable – An insurance policy that the company will renew with each premium payment, as long as you meet certain conditions.

Coordination of Benefits (COB) – Provisions and procedures used by health carriers to avoid duplicate payments when a person is covered by more than one policy/contract.

Co-payment (co-insurance) – A specified dollar amount or percentage of covered expenses which a health care policy/contract or Medicare requires a covered person to pay toward eligible medical bills.

Covered Period – The time period for which covered services will be paid.

Covered Person – A person who receives benefits of a health care policy/contract.

Covered Services – Services for which a health care policy/contract will pay.

Deductible – A specified dollar amount of medical expenses which the covered person must pay before a health care policy/contract will pay.

Enrollment Period – Period during which individuals or group members may enroll for coverage under a health care policy/contract

Exclusion – A procedure, service, or condition which a health care policy/contract does not cover.

Experimental/Investigational – Medical treatment/procedures that are not generally accepted as the standard of care in the medical profession. Health care policies/contracts often do not cover these treatments/procedures. Often there is disagreement between doctors and health carriers whether a specific treatment/procedure is experimental/investigational.

Explanation of Benefits (EOB) – A statement from a health carrier showing payments or denials for claims for health care services.

Fee For Service – Health care coverage that does not place restrictions on which doctor one can use. The health carrier pays for the health care expenses you incur.

Free Look – The period during which you may reconsider the purchase of an insurance policy, cancel and get a full refund. Individual health policies have a free look of at least 10 days; Medicare supplement and long-term care policies have 30-day free look periods.

Grace Period – A specified period, usually 30 days, for the payment of a renewal premium after the original premium due date. The coverage remains in effect during the grace period if the premium is paid before the grace period expires.

Group Insurance/Coverage – A contract between an insurer and an employer or other group.

Guaranty Issue – An insurance policy that is issued to anyone, regardless of health.

Guaranteed Renewable – An agreement by an insurance company to insure a person for as long as premiums are paid.

Health Insurance Portability and Accountability Act (HIPAA) – Federal statute that among other things, people who move from one group health care plan to another or who move from a group plan to an individual plan will not have to satisfy a new preexisting condition exclusion period. HIPAA was effective on July 1, 1997.

HIPAA Eligible Individual – A person who meets federal standards for continuing or obtaining health care coverage under the Federal HIPAA.

Health Savings Account (HSA) – A new health coverage option that is similar to a Medical Savings Account (MSA). A major advantage to an HSA is that savings may be carried over from calendar year to another.

Hospital Indemnity Policy – Pays a fixed dollar amount for each day you are in the hospital, regardless of actual hospital bills.

Individual Health Care Coverage – A policy/contract between a health carrier and a covered person.

Individual Mandate – Under the ACA, starting January 1, 2014, consumers and their dependents including children were required to have “minimum essential coverage” or pay a penalty, unless they fit within an exemption. This requirement is commonly known as the “individual mandate.”

Inpatient – A person who has been admitted to a hospital or other health care facility to receive diagnosis, treatment or other health services.

Insured – An individual or organization protected by an insurance policy.

Lifetime Maximum – The total amount a policy/contract will pay during the covered person’s lifetime.

Long-term Care (LTC) – The medical and social care given to one who has a severe chronic impairment over a long period of time.

Loss – The basis for a claim under a policy/contract. In health insurance, loss can refer to medical expenses, resulting from illness or injury.

Loss Ratio – The dollar amount a health carrier pays in claims compared to the amount it collects in premiums. Loss ratio is usually shown as a percentage of claims for every dollar collected.

Maximum Amount – The most a health carrier will pay for a specified loss or covered service. The amount can be expressed as either a period of time, a dollar amount or a percentage of the approved amount. Payment may be made to the covered person or the provider.

Medically Necessary – Treatments or services a health care policy/contract will pay for as defined in the contract. Each policy/contract should define medically necessary.

Medical Savings Account (MSA) – A special kind of account that is eligible for a tax credit when combined with catastrophic care insurance that has high deductibles.

Multiple Employer Welfare Arrangement (MEWA) – An organization of employers who “jointly self-insure” and pool funds to provide health care benefits for their employees.

Open Enrollment – A period of time when new applicants may enroll in a health care plan regardless of their health condition.

Out-of-State Group Policies – A group policy/contract that is sold outside of Oklahoma to a group domiciled in another state.

Outpatient – A patient who receives care at a hospital or other health facility without being admitted to the facility. Outpatient care also refers to care given in other locations such as outpatient clinics.

Pre-existing Condition – An illness or medical condition for which an individual received medical advice, diagnosis, care or treatment.

Effective January 1, 2014, ACA Compliant plans must include new consumer protections. Health insurers can no longer deny applicants or refuse to renew coverage because of a pre-existing medical condition. They also can’t charge a higher premium due to a person’s gender or health condition.

Non-ACA compliant plans continue to medically underwrite, apply pre-existing exclusions and waiting periods and can out-right deny coverage during the claim process.

Pre-certification/Pre-authorization – A requirement that you obtain the health carrier’s approval before a medical service is provided or before services by an out-of-network provider are received. Pre-certification/Pre-authorization is not a guarantee of claim payment however; failure to obtain pre-certification/pre-authorization may result in denial of the claim or reduction in payment of the claim.

Primary Carrier – Health care coverage that pays first when a person is covered by more than one policy/contract.

Provider – A person or organization that provides medical services, such as a doctor, hospital, x-ray company, home health agency, pharmacy, etc.

Rider – A legal document that modifies a health care coverage policy/contract. Riders may extend or decrease coverage or add or exclude specific conditions.

Secondary Carrier – Health care coverage that pays second when a person is covered by more than one policy/contract. The secondary carrier cannot determine its payment until after the primary carrier has made its payment determination.

Self-funded/Self-insured Health Care Plan – A health care plan created to pay benefits from a fund established by an employer or organization. Self-funded/Self-insured plans may be administered by third-party administrators or insurance companies but are not considered products under the authority of OID with an exception in some situation for prescription benefits processed by Oklahoma licensed PBM’s.

Specific Disease Policy – A health insurance policy that covers the expenses incurred only for a specific disease named in the policy. The most common type is cancer insurance. Also known as Dread Disease policy.

Underwriting – The process by which a health carrier determines whether or not and on what basis it will accept an application for coverage.

Usual, Customary and Reasonable (UCR) – The dollar amount a health carrier has determined to be appropriate for a particular medical service that is received from an non-PPO network provider. This amount is often less than the actual charge. Each carrier determines its own UCR amount and not all health carriers use this method for determining payments.

Waiting Period – The time that must pass after coverage begins and before the policy/contract will pay claims for a pre-existing condition. It may also refer to the time you must wait before obtaining health care coverage from a new employer group health care plan.

Waiver – A voluntary surrender of a right or privilege known to exist.

You may not be able to enroll in another plan until the Open Enrollment Period unless you qualify for a Special Enrollment Period. Check your policy first though, to see if there are any limitations on canceling your plan. If you are not enrolled in any health plan, you’ll be responsible for major health expenses, but you won’t face a federal tax penalty.