Health Insurance Terms

Most Commonly Used Words and Their Meanings

What Does that Mean?

Associate Health Plan – Association health plan is not a group health insurance plan. You are subject to underwriting based on your health history. Your plan is an individual. Group plans are customized to ensure that all members of the group are “sharing” the same risk, regardless of each member health conditions. Everyone in the group is charged the sane premium. There is an annual charge to participate in the association, so that you can have health coverage. A group plan is your employer-sponsored benefits and should not be misconstrued.

Covered Expense is the medically necessary usual and customary charges for services, supplies, care, or treatment covered under the plan.

COBRA (Consolidated Omnibus Budget Reconciliation Act of 1986) is a continuation of benefits from your employer when you leave your job. It allows you to continue to participate in your employer’s group health plan at your own expense, which is 102% of the premium rate. It is usually more expensive than what you have been used to paying, because your employer pays for all or some of the costs. COBRA is generally good for eighteen (18) months and sometimes can be extended to thirty-six (36) months if there is a major medical condition. You have sixty-three (63) days to get an individual plan or other types of coverage.

Co-Pay is the amount the insured is required to pay for specific covered expenses.

Credible-Continuous Coverage is verification from the insurance carrier that you were insured. It is a letter from the health insurance company that shows the length of coverage you had. It is often needed if you are applying for HIPPA or a limited plan, so that your pre-existing condition would still be covered.

Discount Plan provides a reduced price for doctors and/or services rendered through its network. It is NOT insurance.

HIPPA (Health Insurance Portability and Accountability Act of 1996) allows you and your family to qualify immediately for comparable health insurance coverage as when you were employed. A proof of COBRA coverage has been exhausted or a decline letter is required to be eligible. A HIPPA plan is expensive and most people cannot afford it.

HMO (Health Maintenance Organizations) is health care in which you pay a fixed monthly fee regardless of the type or level of services provided. HMOs are for-profit business. They have to make money and often, this means that doctors must see as many patients as possible each day and minimize costs for the organization. It is not really insurance, but a health care provider. All services must be approved by your primary physician. Services are provided by physician who are employed by or under contract with the HMO. Depending on the type of the HMO, services may be provided in a central facility, or in a physician’s own office.

Limited Plan is a plan that provides reduced benefits. There may be a restriction for services such as: diagnostic testing, x-ray, emergency room, outpatient surgery, hospital stay, to name a few. This type of coverage is generally very inexpensive. However, you do have more out of pocket expense.

Period of Confinement begins on the date the insured person is admitted to a hospital or outpatient surgical facility for treatment of an injury or sickness.

PPO (Preferred Provider Organization) allows you to choose any doctor or hospital within a network of preferred providers. it allows you freedom to seek services outside of the network at a non-negotiated fee without approval from your primary physician. This allows you the flexibility to go outside of the network to specialists and hospitals for services. You have more control over your own healthcare decisions that you would with a HMO.

Usual and Customary charges is the smallest of 1) actual charge, 2) usually made for the covered expense by the provider who furnishes it, 3) prevailing charge made for a covered expense in a geographical area by those of similar standards, or 4) negotiated rate it provides for a covered expense