Glossary of Terms: 
Disclaimer: The glossary of terms is to be used as tool to achieve a general understanding of terms used throughout this site and the industry. No such term or definition provided within this website or any linking website will be misconstrued as legally binding. The contractual Plan Document supersedes any and all documents and content within this website or linking website.

ACCIDENT
An event, causing bodily injury, which is unforeseen or unintended.

ASSIGNMENT OF BENEFITS
A statement which permits the covered person to authorize payment of healthcare benefits to the provider on whose charges a claim is based.

BENEFIT
The amount payable to a claimant, or assignee, under the coverage provided by the plan.

BENEFIT PERIOD
The period of time during which a covered person may receive benefits.

CLAIM
Notification by a covered person, usally by submission of incurred medical bills or a statement of disability, that consideration be given to determine the amount of coverage for which the covered person is eligible under the plan.

CO-PAY
Partial payment of medical expenses, emergency room services, or prescription drugs required by an individual who is enrolled in a group health insurance plan. For example, a co-payment for a visit to a doctor's office might be 0.

COBRA
The coverage provided under the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1982 (COBRA) and its amendments.

COINSURANCE
Arrangement by which the insurer and the insured share, in a specific ratio, payment for losses covered by the policy, after the deductible is met.

COORDINATION OF BENEFITS
A method of integrating benefits payable under more than one group health plan so that the participant's benfits from all sources do not exceed.

COVERAGE
The benefit, stated in the Employer's Plan, for which the participant is eligible. In a broader sense, it is a type of coverage (such as hospital coverage, Major Medical coverage, etc.).

COVERED CHARGES
Charges for medical care or supplies which, if uncured by a covered person, create a liability for the plan the terms of a group plan.

DEDUCTIBLE
Amount that must be paid by the insured before benefits will be paid by the insurer.

ERISA
The Employee Retirement Income Act of 1974. This act provides new protections and guarantees for employees covered by private pension and welfare plans and for their beneficiaries.

EXCLUSIONS (EXCEPTIONS)
Conditions or circumstances, listed in the policy, for which the insurer will not provide benefits.

EXPLANATION OF BENEIFTS
A document send with each claim payment explaining the payment of the claim.

FAMILY DEDUCTIBLE
A type of deductible which may be satisfied by the combined expenses of all covered family members rather than a single family member; may also be used to refer to a deductible provision whereby, after 2 or 3 family members have satisfied individual deductibles, no further deductible is applied to any family member in that deductible period.

LATE APPLICANT
An eligible person who applies for coverage after the eligibility period.

MEDICAID
A government sponsored health care program in which the federal government shares with the states the costs of providing medical care to the poor and near poor, the blind and disabled children.

MEDICARE
A government sponsored, two-part health insurance program for people 65 and older and some people under 65 who are disabled. Medical payments are handled by private insurance organizations under contract with the government.

OUT-OF-POCKET
The portion of the medical expenses, not paid by the group plan, which must be assumed by the covered person.

PENDED CLAIM
A claim which has been reported but on which final action has not yet been taken.

PLAN DOCUMENT
A booklet, or document, distributed to covered persons, which describes the provisions of their benefit plan. It is also used for claims personnel to determine the appropriate benefits to be applied for persons covered under the plan.

PRE-EXISTING CONDITION
Any physical and/or mental condition or conditions that exist prior to the effective date of health insurance coverage. Many disability policies and individual health plans exclude benefits for any illness or injury for which a person received medical treatment or consultation within a specified time period before becoming covered under the plan.

PRECERTIFICATION
A utilization management program that requires the insured or the health care provider to notify the insurer prior to a hospitalization or surgical procedure. The notification allows the insurer to authorize payment, as well as to recommend alternate courses of action.

PROBATIONARY PERIOD
The length of time a person must wait from the date of entry into an eligible class, or application for coverage, to the date coverage becomes effective.

REASONABLE AND CUSTOMARY
The plan will pay a reasonable fee based on what is usually and customarily accepted as payment for the same service within a geographic area.

REVISION
A change in benefits, terms or conditions of a group case.

TPA (Third Party Administrator)
An employer may choose to be “self-funded” in lieu of a conventional insurance. Therefore, a company will cover the medical expenses up to a particular maximum (Ex. $25,000.00) and then have reinsurance to cover the expenses from that point to the policy maximum (Ex. $1,000,000.00). For companies choosing to operate in this manner, it is usually in their best interest to contract with a Third Party Administrator to oversee their health care plan and examine and process their claims.

While a TPA does not fall under the jurisdiction of the Insurance Commissioner, it does have to comply with the regulations established under ERISA (employee Retirement Security Act of 1974). Another important difference is that the Plan Document for a “self-funded” plan is totally custom designed by the company fitting their own individual needs instead of simply choosing a plan designed by an insurance company. Therefore, a TPA acts an an extension of a business organization designed to work with the company to offer the best health care benefit for its employee.