Benefits Glossary of Commonly Used Terms
30-Day Rule: Guideline set-forth by IRS, stating that all healthcare elections must be made within 30 calendar days of date-of-hire or qualifying event.
457: Voluntary Retirement Plan similar to a 401k, but only available to non-profit, organizations that allows employees to invest a certain amount of pre-tax dollars into a retirement account. For UToledo the vendor is Ohio Deferred Compensation.
403b: Voluntary Retirement Plan similar to a 401k, but only available to government employees, that allows participants to invest a certain amount of pre-tax dollars into a retirement account. UToledo 2009 vendors include ING, TIAA-CREF, Valic & Ameriprise.
A
ARP: Alternative Retirement Plan (ARP) is available to full time, benefits eligible employees, in which they may take employee and the University’s retirement contributions and invest them privately, in lieu of investing with the state plans.
B
Beneficiary: Person whom the participant (employee) names as the owner of their account, in the event of their death.
C
Certification of Credible Coverage: A written certificate issued by a group health plan or health insurer that shows prior health coverage (credible coverage) and is used to satisfy waiting periods for plans with pre-existing conditions.
COBRA: Consolidated Omnibus Budget Reconciliation Act of 1985. Statute that requires employers to offer the option of purchasing continued benefit coverage to qualified employees/beneficiaries, who would otherwise lose group health insurance as result of a qualifying event.
Convertibility & Portability: Provision that allows terminated employees to change existing life insurance policy to a private plan (convertibility) or continue coverage at the same or reduced benefit amount to a stipulated age, depending on coverage (portability).
CDHP (Consumer Directed Healthcare Plan): Health Plan used in conjunction with an HSA, with a minimum deductible over $1000 for single plans and $2000 for family plans. Also have higher out-of-pocket maximums than traditional plans.
Coordination of Benefits (COB): Provisions to avoid duplicate payments from multiple insurance policies.
Co-Insurance: Co-insurance begins once the participant reaches his/her annual deductible at which point the participant and the university will split the cost of the claim amount. For example the university will pay 90% while the participant pays 10%. Co-insurance becomes 100% covered by the University usually when the annual out-of-pocket maximum is reached.
Co-Pay: The fixed amount the participant pays at the time of service, usually does not reflect actual cost of service. Payment goes directly to health care provider and does not count towards deductible or out-of-pocket maximums.
D
Deductible: Annual amount that must be initially reached by participant before services are eligible to be paid by co-insurance.
Domestic Partner: Any person that meets all qualifications to be registered by the University as a covered spouse without certificate of legal marriage.
Dual Coverage: Refers to the fact that no employee may be simultaneously covered as an employee and a dependent on the University’s health care plan; nor can an individual be covered as a dependent on more than one University plan. Not to be confused with Secondary Coverage.
Durable Medical Equipment (DME): Medical equipment (ventilator, wheelchair etc.) that may be prescribed for a patient’s use for an extended period of time.
E
EAP: Program offering support services that address a variety of concerns such as legal support, counseling, eldercare/dependent services, stress management etc.
EPO (Exclusive Provider Option): Only offers payment for services rendered by an in-network provider.
Evidence of Insurability: A procedure used, most usually in the case of life insurance, that takes in to account an applicant’s physical condition and medical history, which is then evaluated by Insurance Provider to determine if risk of coverage is acceptable for applied level of coverage.
Exclusion: Specific services or conditions that are not covered under guidelines of plan design.
Explanation of Benefits (EOB): Statement sent to participant from insurance provider that lists services rendered, amount billed and amount paid. Statement is not a bill but a document used for record keeping purposes.
F
Flexible Spending Account (FSA): Special account employees are offered in which they are allowed to deduct pre-tax dollars from their current pay to use for reimbursement of medical expenses occurred. Accounts have a set maximum amount and do not rollover from one year to the next.
Formulary: Refers to detailed list of coverage levels for drugs listed under Prescription plan.
G
Group Term Life Insurance: Life insurance obtained by the employer for the use of the employee. Life Insurance has no cash value and is only obtainable while actively employed.
H
HIPPA: Health Insurance Privacy and Portability Act, a set of federal guidelines that protect coverage levels for employees and also sets forth regulations on how employees’ private information is handled and protected.
HSA: A Health Savings Account is used in accordance with a high deductible health care plan, or CDHP, in which employees and the University will place pre-tax dollars in an account for payment of medical expenses. Unlike an FSA it does rollover from one calendar year to another and may be used after separation from University.
I
In-Network: Refers to services acquired through a physician or health care provider that have an existing contact for service payment with insurance provider.
J
K
L
Lifetime Maximum: Refers to maximum dollar amount insurance coverage will pay in any one participant’s lifetime for services rendered under insurance contract. Usually set in the $1 to $2 million range.
M
Medical Necessity: Services defined as necessary for the participant and non-elective, definitions vary by plan design.
N
Network: Refers to group of contracted physicians and other health care providers that have contracts pre-determining coverage limits and payment policies for services offered. Contracts are usually set with lower prices in mind than that of non-contracted providers.
Non-Network: Refers to physicians and other health care providers that do not have contracts with insurance carrier to determine coverage limits and payment policies. Participant’s usually required to pay higher due to balance billing from provider.
O
Open Enrollment: Annual period in which participants may make changes to health care coverage without necessity of qualifying event or penalty of 30-day rule. Usually one month in length held near the end of every year. All changes made to plans are effective as of January 1 the following calendar year.
Out-of-Network: Refers to services acquired through a physician or health care provider that does not have an existing contact for service payment with insurance provider.
Out-of-Pocket Maximum: The dollar amount a participant is expected to pay out-of-pocket in any one calendar year. Once Out-of-Pocket Maximum is met Co-Insurance becomes 100%.
P
Portability: See Convertibility & Portability
POS (Point-Of-Service): Type plan similar to a PPO, offers in-network and out-of-network benefits but requires the selection of a Primary Care Physician. Also requires PCP referral to receive services from a specialist or out-of-network provider. In-network services paid for at a higher amount.
PPO (Preferred Provider Organization): Type of plans that offers coverage for in-network and out-of-network health care providers. In-network services paid for at a higher amount. Unlike POS does not require referrals or the selection of a PCP.
Pre-Authorization: Process that requires participant or health care provider to in charge of participants care to notify insurance provider, in advance, of participants course of care. Also known as Prior Authorization.
Provider: Refers to physician or hospital in charge of care of participant.
Primary Care Physician (PCP): Used in a POS plan, serves as general physician, and from which participants must be referred to specialists and out-of-network providers, if necessary.
Primary Coverage: Refers to insurance plan that will determine initial eligibility and payment of claims. After which secondary coverage, if applicable, will process and determine further payment if eligible.
Premium: Amount of money employee pays monthly for insurance coverage. Usually deducted pre-tax from each pay check twice a month. This does not include co-payments or deductible.
Preventive Care: Refers to approved services rendered to prevent illness, does not include diagnostic treatment. Examples would include, check-ups, physicals, Wellness Checks, Cleanings and Exams (Dental) etc . . .
Prior Authorization: See Pre-Authorization.
Q
Qualifying Event: Life changing event such as birth, death, marriage, divorce, loss of coverage, change in job status etc . . . upon which a benefits eligible employee would have 30 days from date of event to make any necessary changes to health care coverage. Only time persons may make changes to health care coverage outside of annual open enrollment.
R
Reasonable & Customary: Refers to amount insurance providers use to determine payments on services, most usually the amount paid on out-of-network services. Determined using historical data collected by the claims administrator for providers’ charges within specific geographic areas and independent claims research. Updated periodically to ensure current data and payment.
S
Secondary Coverage: Acts as supplemental coverage to primary coverage. After claims are processed and/or paid by primary coverage, claims may then be reprocessed to determine if claims are eligible for further payment by secondary coverage. Not to be confused with Dual Coverage.
Self-Funded: University assumes financial responsibility for health insurance losses incurred by membership. Benefits are controlled by University and a Third Party Administrator (TPA) is used to handle claims processing and development of networks.
Specialist: Refers to eligible physician or health care provider that offers specific services rather than general. Examples include, Allergists, ENT, Chiropractors etc . . .
Stop-Loss Insurance: Used to protect against overwhelming or unmanageable financial risk. Used most usually by self-funded organizations.
T
TPA (Third Party Administrator): Used for administrative services of insurance plan such as claims processing and network development. Usually used by self-funded organizations.
U
Utilization: Amount of usage insurance plan experiences in certain time period. Utilization data is used to determine Premium amounts and other coverage amounts.
V
Vesting: Refers to an individual’s eligibility and access to full retirement account rights
and amounts. Usually achieved after fixed time period.
VRP (Voluntary Retirement Plans): Refers to investment plans such as 403b or 457 that house pre-tax retirement contributions.
W
Wrap-Network: Process where network is extended to out-of-network areas, usually at the national levels to allow for more providers to be covered at the in-network level.
Women’s Health and Cancer Right’s Act (Janet’s Law): Federal law that provides important protections for individuals who have undergone a mastectomy.