Accident-only policies – Policies that pay only in cases arising from an accident or injury.
Agent – A person who represents an insurance company to solicit or sell the company´s insurance products. An agent may represent a single company or multiple companies. An agent must be licensed by the Texas Department of Insurance to legally sell insurance in the state.
Allowed amount – The maximum amount on which payment is based for covered health care services . From the health plan’s perspective, this is the fair price for a health care service. This may be called “eligible expense,” “payment allowance,” “contracted rate,” or “negotiated rate.” If your doctor or hospital charges more than the allowed amount, you may have to pay the difference. This is called balance billing .
Appeal – A request for your health insurance company or plan to review a decision or a grievance.
Balance billing – When a doctor or hospital bills you for the difference between their charge and the allowed amount . For example, if their charge is $100 and the allowed amount is $70, they may bill you for the remaining $30. A preferred provider may not balance bill you for covered services .
Benefits or covered services – The health care items or services covered under a health insurance plan. Covered benefits and exclusions are defined in the health plan’s coverage documents ( policy or evidence of coverage ) and summarized in the summary of benefits and coverage . To review the benefits and exclusions before purchasing a plan, request the plan disclosures .
Capitation – A system where an HMO pays a doctor or hospital a flat monthly fee for the care of each health plan member whether or not any services are delivered.
Carrier – A company or HMO that provides health care coverage.
Certificates of coverage – Printed material showing members of a group health benefit plan the benefits provided by the group master policy.
Closed practice – A primary care physician who isn’t accepting new patients. Note: Even if your physician is on the HMO or PPO list, call to see if the practice is still open for accepting new HMO or PPO participants.
Coinsurance – Your share of the costs of a covered health care service, calculated as a percent (for example, 20%) of the allowed amount for the service. In most plans, after meeting your deductible , you must pay coinsurance until you reach your out-of-pocket limit . For example, if your plan’s allowed amount for an office visit is $100 and you’ve met your deductible, your coinsurance payment of 20 percent would be $20. The health insurance or plan pays the rest of the allowed amount. Usually does not apply to HMOs .
Coinsurance maximum – The most you will have to pay in coinsurance during a policy period (usually a year) before your health plan begins paying 100 percent of the cost of your covered health services. The coinsurance maximum generally does not apply to copayments or other expenses you might be required to pay.
Complications of Pregnancy – Conditions due to pregnancy, labor, or delivery that require medical care to prevent serious harm to the health of the mother or the fetus. Morning sickness and a non-emergency caesarean section aren’t complications of pregnancy.
Coordination of benefits – A group plan provision that stipulates the primary carrier when you have more than one health plan. This ensures that payments made by the carriers do not exceed the cost of the services provided.
Copayment – A fixed amount you must pay for a covered health care service , usually when you get the service. The amount can vary by the type of covered health care service. For example, your plan might charge you $15 for a generic prescription drug, $30 to visit your primary care doctor , and $50 to see a specialist .
Cost-sharing – The share of costs covered by your insurance that you pay out of your own pocket. This term generally includes deductibles , coinsurance , and copayments , but it doesn’t include premiums , balance billing amounts for nonpreferred providers , or the cost of exclusions .
Deductible – The amount you must pay out-of-pocket for covered services before your plan begins to pay its portion of your medical expenses. You usually must meet a deductible each year. For example, if your deductible is $1,000, your plan won’t pay anything until you’ve paid $1,000 out-of-pocket for covered health care services subject to the deductible. If you have a family plan that covers your spouse or dependents, you may have one deductible for the entire family, or you may have to meet a separate deductible for each family member.
Disability benefits – Insurance company coverage that pays for lost wages when you are unable to work because of an illness or injury.
Disclosures – Insurance documents that detail the terms and conditions of a health plan including benefits , exclusions , cost-sharing , service area , and preferred provider network . Disclosures offer information that is more detailed than the plan’s summary of benefits and coverage . You have the right to request a plan’s disclosures before purchasing the plan. After you purchase a plan, you can find this information in your policy or evidence of coverage .
Dread disease policies – Policies that pay only if you contract the illness specified in the policy. (Also called specified disease policies.)
Drug Formulary – A list of generic, brand name, and specialty prescription drugs that are covered by your health plan. Sometimes called the preferred drug list. Use this document to determine which drugs are covered and the level of cost-sharing you will pay.
Durable medical equipment (DME) – Equipment and supplies your doctor orders for your everyday or extended use. Coverage for DME may include oxygen equipment, wheelchairs, crutches, and blood testing strips for diabetics.
Eligible employee – An employee who meets the eligibility requirements for coverage in a group plan. To be eligible to join a group plan, you usually must work full-time for at least 30 hours a week.
Emergency care – Health care services provided in a hospital emergency facility or comparable facility to evaluate and stabilize sudden and severe medical conditions.
Emergency medical condition – An illness, injury, symptom, or condition that is so serious that a reasonable person would seek care right away to avoid severe harm.
ERISA plan – Health plans created under the Employee Retirement and Income Security Act (ERISA) of 1974. These plans are usually self-funded, which means that claims are paid strictly from employer contributions and employee premiums. ERISA plans are regulated by the U.S. Department of Labor, not the state. (Also known as a self-funded plan.)
Evidence of coverage (EOC) – The legal contract associated with health coverage under an HMO . An EOC details your benefits , exclusions , cost-sharing , and rights and responsibilities under the plan.
Evidence of insurability – Proof that you are in good health. Some insurance companies require you to provide information about your medical history and health status to determine whether they will insure you or whether they will exclude certain coverages. In 2014, consumers won’t have to provide this information to purchase a Federal Affordable Care Act-compliant health insurance policy. Insurance companies won’t be able to decline to issue coverage to anyone, regardless of health status. Companies also may not exclude certain coverage based on preexisting conditions.
Exclusions or limitations – Health care services that your health insurance or plan doesn’t pay for or cover. Refer to your policy or evidence of coverage for the full list of exclusions. If you’re shopping for coverage, request the plan’s disclosures .
Exclusive provider organization (EPO) – A type of health insurance plan where services are covered only if you go to preferred providers . Out-of-network care is only covered in an emergency, or if you can’t access the care you need in-network . EPO plans are similar to HMO plans, but EPOs are offered by insurance companies, which are regulated differently than HMOs.
Facility-based provider – A health care professional who works at a health care facility such as a radiologist, anesthesiologist, pathologist, neonatologist, or an emergency department physician who works at a health care facility.
Gatekeeper – The physician selected by HMO members to serve as their personal doctor and provide all basic medical treatments and any referrals to medical specialists. Gatekeepers are prohibited in PPOs and other indemnity health plans. (Also known as a primary care physician.)
Grievance procedure – The required appeal process an HMO provides for you to protest a decision regarding medical necessity or claim payment. Insurance companies have grievance procedures.
Guaranteed renewable – Policies that may not be non-renewed or canceled, except in certain cases. An insurance company may cancel a guaranteed renewable policy for failure to pay premiums, fraud, or intentional material misrepresentation. It also may cancel your policy if the company formally leaves the individual or group health market in Texas.
Habilitation services – Health care services that help a person keep, learn, or improve skills and functioning for daily living. Examples include therapy for a child who isn’t walking or talking at the expected age. These services may include physical and occupational therapy, speech-language pathology, and other services for people with disabilities in a variety of inpatient and outpatient settings.
Health benefit plan – In most cases, health care services provided to employees by an employer. It can be a self-insured plan, a fully insured health plan, or an HMO plan.
Health insurance – A contract that requires your health insurance company to pay some or all of your health care costs in exchange for a premium.
Health care reimbursement accounts – Although not an insurance benefit, these accounts allow you to set aside pre-tax dollars to pay for medical care or medical costs not covered by your regular health benefit plan.
Health maintenance organization (HMO) – A type of health benefit plan that usually limits coverage to care from preferred providers – the doctors who work for or contract with the HMO. Out-of-network care is only covered in an emergency, or if you can’t access the care you need in-network . In an HMO plan, your care is managed by your primary care provider and you need a referral in order to see a specialist . HMO plans are similar to EPO plans, but HMOs are regulated differently than insurance companies.
Health savings account (HSA) – A medical savings account available to taxpayers who are enrolled in a high deductible health plan. Setting money aside in an HSA can help you afford cost-sharing expenses when you need care. The funds contributed to the account aren’t subject to federal income tax at the time of deposit. Funds must be used to pay for qualified medical expenses and roll over year to year if you don’t spend them.
Home health care – Health care services a person receives at home.
Hospital confinement policies – Policies that pay a fixed amount each day you are in the hospital.
Hospital-surgical policies – Insurance policies that cover hospital and surgical services.
Hospitalization – Care in a hospital that requires admission as an inpatient and usually requires an overnight stay. An overnight stay for observation could be outpatient care.
Hospital outpatient care – Care in a hospital that usually doesn’t require an overnight stay.
In-network – Refers to services received from preferred providers , who have a business relationship with your health plan, which means they have agreed to the plan’s allowed amount and will not balance bill you. Services received in-network are covered according to your plan’s in-network cost-sharing provisions.
In-network coinsurance – The percent you pay of the allowed amount for covered health care services to doctors and hospitals who contract with your health insurance or plan. In-network coinsurance usually costs you less than out-of-network coinsurance.
In-network copayment – A fixed amount you pay for covered health care services to doctors and hospitals who contract with your health insurance or plan. In-network copayments usually are less than out-of-network copayments.
Inadequate Network – A lack of available preferred providers qualified to provide a covered service . If you are looking to visit a preferred provider but are unable to due to an inadequate network, you generally have the right to obtain out-of-network care at the in-network level of benefits.
Indemnity plan – A health plan that allows you to go to any doctor or hospital you choose, but requires that you pay for the services yourself and file claims for reimbursement. (Also known as fee-for-service.)
Independent Review Organization (IRO) – If your health insurance company or HMO declines to pay for health care you believe is medically necessary or appropriate, you may request that it contact TDI and request that an independent group (IRO) review the decision. (TDI doesn’t assign IROs for review under self-funded ERISA plans; instead, federal processes apply.) Unless your condition is life-threatening, you must complete the standard appeal process before requesting an IRO review. IROs are not affiliated with your health plan. The health plan must pay for treatment the IRO determines is necessary.
Inpatient medical care – Medical and surgical care usually received in a hospital or skilled nursing home environment.
Lifetime maximum – The total dollar amount a health care plan will pay over a policyholder´s lifetime. The Federal Affordable Care Act prohibits most health plans from including lifetime dollar limits on essential health benefits.
Limited hospital care network – A PPO that uses a preferred provider network that relies on an access plan in order to meet Texas’ network adequacy requirements for hospitals. In contrast to a plan with an Approved Hospital Care Network , you may be at higher risk of balance billing from facility-based physicians .
Local Market Access Plan – Required for any health plan that wants to offer coverage to consumers in an area where they do not meet Texas’ network adequacy requirements. The health plan must ask the Texas Department of Insurance for a waiver and develop a local market access plan. The access plan must describe how the insurer will assist enrollees in obtaining services, mitigate balance billing , and handle out-of-network claims when no preferred provider is reasonably available.
Long-term care benefits – Coverage that provides help for people when they are unable to care for themselves because of prolonged illness or disability. Benefits are triggered by specific findings of “cognitive impairment” or inability to perform certain actions known as “activities of daily living.” Benefits can range from help with daily activities while recuperating at home to skilled nursing care provided in a nursing home.
Major medical policies – Health care policies that usually cover both hospital stays and physicians´ services in and out of the hospital. This is a term that refers to the comprehensive health plans we normally think of when talking about health insurance, and which are subject to the Federal Affordable Care Act.
Managed health care – A system that organizes doctors and hospitals into networks with the goal of lowering costs while still providing appropriate medical services. Many managed care systems focus on preventive care and case management to avoid treating more costly illnesses. Most major medical policies are considered managed health care plans.
Mandated benefits – Health care benefits that state or federal law says must be included in health care plans. The Federal Affordable Care Act created two new types of mandated benefits. Certain preventive health services are required to be covered by most health plans without cost sharing. The essential health benefits package is required to be covered by most individual and small group health plans.
Mandated offerings – Health care benefits that state law says must be offered to the individual, employer or organization sponsoring a group policy. The individual or group sponsor is not required to purchase the benefits.
Medically necessary – Health care services or supplies needed to prevent, diagnose, or treat an illness, injury, condition, disease, or its symptoms and that meet accepted standards of medicine.
Metal level – A system for indicating the amount of coverage a plan provides, to enable consumers to make “apples to apples” comparisons. Plans sold to individuals and small employer groups are separated into four categories – Bronze, Silver, Gold, and Platinum – based on the percentage the plan pays of the average overall cost of providing essential health benefits to members. The percentages the plans pay, on average, are 60% (Bronze), 70% (Silver), 80% (Gold), and 90% (Platinum). These percentages are a reflection of the overall amount of cost-sharing required by a plan across all enrollees . This is different than coinsurance , which is just one type of cost-sharing you pay for specific types of services.
Multiple employer plans – Benefit plans that serve employees of more than one employer and are set up under terms of a collective bargaining agreement.
Multiple Employer Welfare Arrangements (MEWAs) – In general, employee association plans (not set up under a collective bargaining agreement) that provide benefits to employees of more than one employer. MEWAs are generally regulated by both the federal government and the state. If the MEWA assumes all or part of the plan´s insurance risk, it must be licensed by TDI.
Network – A group of providers an insurer contracts with. Each provider in a network is a preferred provider . Insurers negotiate lower medical rates (called allowed amounts or contracted rates) with their network and you receive these discounts when visiting preferred providers.
Network Adequacy – A health plan’s ability to provide its enrollees sufficient access to preferred providers qualified to provide all covered services . Contributing factors to network adequacy include enrollee distance to emergency and non-emergency providers , scheduling wait times, and the number of available area providers. Network adequacy is higher when preferred providers of all types are closer and wait times are minimized.
Non-network providers – Health care providers – doctors, hospitals, and treatment facilities — not under contract with a particular HMO, PPO, or EPO.
Out-of-area – The area outside the counties or ZIP codes in which an HMO provides regular and preventive coverage.
Out-of-network – Refers to services or costs received from nonpreferred providers .
Out-of-network coinsurance – The percent you pay of the allowed amount for covered health care services to doctors and hospitals that do not contract with your health insurance or plan. Out-of-network co-insurance usually costs you more than in-network coinsurance.
Out-of-network copayment – A fixed amount you pay for covered health care services from doctors and hospitals that don’t contract with your health insurance or plan. Out-of-network co-payments usually are more than in-network co-payments.
Out-of-network services – Health care services from doctors and hospitals not in an HMO´s, PPO´s, or EPO’s network. Except in certain situations, HMOs and EPOs will only pay for care received from within its network. If you´re in a PPO plan, you will have to pay more to receive services outside the PPO´s network.
Out-of-pocket – Your expenses for medical care that aren’t reimbursed by insurance. Out-of-pocket costs include deductibles , coinsurance , and copayments for covered services plus all costs for services that aren’t covered by your plan .
Out-of-pocket maximum or limit – The most you will have to pay during a policy period (usually a year) before you no longer have to pay cost-sharing for covered health services . Once you’ve reached your out-of-pocket maximum, your health plan generally pays 100 percent of your covered essential health benefits. You are still responsible for paying your premium . This maximum or limit does not include your premium, balance-billed charges, spending for non-essential health benefits, or spending for non-covered services .
Outpatient services – Services usually provided in clinics, physician or doctor’s offices, hospital-based outpatient departments, home health services, ambulatory surgical centers, hospices, or kidney dialysis centers.
Point-of-service plan (POS) – A type of plan offered by an HMO that allows enrollees the option of receiving services outside of the HMO plan’s provider network . It usually offers fewer restrictions than an HMO or EPO but more than a PPO .
Preexisting condition – Health condition present before enrolling in medical insurance. The Affordable Care Act does not allow health plans to deny coverage, impose exclusions or waiting periods, or charge higher premiums due to a preexisting condition. However, some job-based plans that are grandfathered under the law may continue to take preexisting conditions into account. The ban on preexisting conditions doesn’t apply to Medicare supplement and long-term care insurance plans.
Preauthorization – Approval from a health plan that may be required before you get a service or fill a prescription. When a health plan provides this authorization, it means they agree that the service or prescription is medically necessary. Sometimes called prior authorization, prior approval, or precertification.
Preferred provider – A provider an insurer contracts with. A group of preferred providers makes up an insurer’s network . Insurers negotiate lower medical rates with their network and you receive these discounts when visiting preferred providers. Synonymous to in-network provider.
Preferred provider directory – A list of preferred providers associated with a health plan. This document or website tells you the doctors, hospitals, and other providers within a plan’s network . Synonymous to “list of participating providers” as entitled on a plan’s summary of benefits and coverage page 1.
Preferred provider organization (PPO) – A type of health insurance plan that contracts with doctors and hospitals to create a network of preferred providers that can provide care to enrollees at a discounted cost. PPOs will cover some out-of-network costs, but you will pay more and may be balance billed .
Premium Tax Credit – The Affordable Care Act provides a new tax credit to help you afford health coverage purchased through the Marketplace at healthcare.gov. Advance payments of the tax credit can be used right away to lower your monthly premium costs. If you qualify, you may choose how much advance credit payments to apply to your premiums each month, up to a maximum amount. If the amount of advance credit payments you get for the year is less than the tax credit you’re due, you’ll get the difference as a refundable credit when you file your federal income tax return. If your advance payments for the year are more than the amount of your credit, you must repay the excess advance payments with your tax return.
Primary care provider (PCP) – A doctor who directly provides or coordinates a range of health care services for a patient. HMOs generally have you choose a PCP when you enroll and require a written referral from your PCP before visiting a specialist .
Provider – A doctor, hospital, pharmacist, registered nurse, organization, institution, or person licensed to provide health care services in Texas. The term provider is often used collectively to refer to individuals or facilities that provide health services.
Provider area of practice – A provider’s field of expertise or specialty, such as: internal medicine, family/general practice, pediatric practitioner practice, obstetrics and gynecology, anesthesiology, psychiatry, or general surgery.
Provider network – All the doctors, specialists , hospitals, and other providers who agree to provide medical care to HMO , PPO , or EPO members under terms of a contract with the HMO or insurance company.
Qualifying Life Event – A change in your life that can make you eligible to enroll in health insurance outside of open enrollment . Examples of qualifying life events are moving to a new state, certain changes in your income, and changes in your family size (for example, if you marry, divorce, or have a baby).
Referral – A written order from your primary care doctor for you to see a specialist or get certain medical services. In many Health Maintenance Organizations (HMOs), you need to get a referral before you can get medical care from anyone except your primary care doctor. If you don’t get a referral first, the plan may not pay for the services.
Rehabilitation Services – Health care services that help a person keep, get back, or improve skills and functioning for daily living that have been lost or impaired because a person was sick, hurt, or disabled. These services may include physical and occupational therapy, speech-language pathology, and psychiatric rehabilitation services in a variety of inpatient and outpatient settings.
Self-funded plans – Plans funded strictly from employer contributions and employee premiums. These plans are authorized by the federal Employee Retirement and Income Security Act (ERISA) of 1974 and are regulated by the U.S. Department of Labor. State regulation of these plans is limited. Although an insurance company may be hired to administer the plan, the insurance company assumes no risk. (Also known as ERISA plans.)
Service area – The geographical area in which a plan’s network resides. It is important to know where you are located in regard to your plan’s network coverage.
Skilled nursing care – Care needed after a serious illness. It is available 24 hours a day from skilled medical personnel such as registered nurses or professional therapists. A doctor orders skilled nursing care as part of a treatment plan.
Specified disease policies – Policies that pay only if you contract the illness specified in the policy. (Also called dread disease policies.)
Specified medical limitations – A dollar limit placed on treatment of certain medical conditions or types of treatment. The Federal Affordable Care Act prohibits these dollar limits from applying to benefits contained in the essential health benefits package. Some types of plans not addressed by the law might continue to have these limitations.
Summary of benefits and coverage (SBC) – An easy-to-read summary that lets you make apples-to-apples comparisons of costs and coverage between health plans. You can compare options based on price, benefits , and other features that may be important to you. You’ll get the “Summary of Benefits and Coverage” (SBC) when you shop for coverage on your own or through your job, renew or change coverage, or request an SBC from the health insurance company.
Third-party administrator (TPA) – TPAs administer employee benefit plans under contract with insurance companies, HMOs, and self-funded plans. They are regulated by TDI.
Underwriting – The process insurance companies use to examine, accept, reject, and classify the risks associated with an applicant for coverage. Major medical plans are prohibited from underwriting starting on January 1, 2014.
Urgent care – Care for an illness, injury, or condition serious enough that a reasonable person would seek care right away, but not so severe that it requires emergency room care.
Usual and customary charges – The amount paid for a medical service in a geographic area based on what providers in the area usually charge for the same or similar medical service. The UCR amount sometimes is used to determine the allowed amount.
Utilization review – The review process aimed at helping HMOs and insurance companies reduce health care costs by avoiding unnecessary care. The review includes evaluating requests for medical treatment and determining, on a case-by-case basis, whether that treatment is necessary.