health insurance

Administration services only plan

This is a contract in which a self funded employee welfare benefit plan contracts with an insurer for administrative services. Insurer acts as a third party administrator

Additional Monthly Benefit

rider that can supplement employer provided disability benefits, cover gaps in social security disability insurance, or help pay for extra intial expenses if a person becomes disabled.

Additional purchase option (APO)

Guaranteed insurabiltiy rider

Business Overhead Expense

This form of insurance reimburses the insured company for business expenses and payroll costs if the business owner/operator becomes disabled

Cash Surrender Value Rider

This rider returns all premiums to the policy owner at age 65 if no claims have been made

Change of occupation provision

Allows insurer to reduce the maximum benefit if the insured switches to a more hazardous occupation without informing the insurer. Also allows insurance provider to reduce premiums if they change to a less hazardous job

Concurrent disability

Applies when multiple events are involved with causing the same disability. Can only claim one benefit

Confined disability

Some disability policies may differentiate benefits based on whether the insured is confined by home or in a hospital. Required the insured to stay indoors

Coordination of benefits

Prices that is used to determine the order in which insurance companies pay a claim

Cost of living adjustment rider

Rider that provides automatic increase in benefits to offset costs of inflation - applies once the insured had filed the claim and received benefits for more than one year.

Delayed disability provision

Covers disabilities that appear within a set time after an accident; allows delayed onset disabilities to qualify for benefits

Disability buyout plan

Buy-sell agreement funded by disability insurance to buy a disabled owners business share

Disability buyout policy

Policy designed to fund a disability buyout plan

Disability income rider

On life insurance - pays 1% of face amount monthly if insured becomes fully disabled

Elective indemnity option

Let’s insured choose lump sum payment for certain injuries- optional rider on disability policies

Guaranteed insurability rider

Allows purchase of more disability coverage later without proving insurability

Guaranteed renewable

Insurer must renew policy to termination age - can raise class-wide premiums but not cancel or change terms

Hospital containment rider

Pays extra daily benefit when insured is in hospital

Impairment waiver

Excludes coverage for specific conditions but allows standard premoum for rest of policy

Income replacement contract

Defines disability as an income loss

Lifetime Extension Riber

Extends disability beyond age 65

Long term disability insurance

Pays monthly benefits for > 2 years

Loss of earnings test

Disability claim valid only if the insureds income drops due to disability

Non-cancelable

Insurer must renew to termination age and cannot change terms or premoums

Occupational coverage

Covers both work and non work related disabilities

Non occupational coverage

Covers disabilities from non job related causes only

Presumptive disability

Automatic benefits for severe losses - loss of two limbs, sight, speech or hearing

Probationary period

Intial 7-30 days when sickness coverage is excluded- prevents adverse selection

Pro rata

Each insurer pays proportional share of a covered claim when multiple policies apply

Recurrent disability provision

If a disability occurs within a set period, its treated as a continuation. After that, it’s a new claim

Residual Disability

Pays partial benefit for reduced income due to part time or limited work

Short term disability insurance

Provides weekly benefits for <2 years bridges to long term benefits

Social Security Rider

Pays temp benedit if ssdi is delayed, denied or less than expected

Temporary disability

Workers como term for short term disability expected to improve

Blue Cross

Part of Blue Cross Blue Shield that covers hospital services

Blue Cross and Blue Shield

Insurance provided that pays participating medical providers directly for a subscribers treatment rather than reimbursing the insured.

Blue Shield

This is the part of Blue Cross and Blue Shield that covers treatment costs of physicians and other medical providers.

Capitation

Compensation method - calculated per patient rather than per service. HMOs pay providers a flat fee per person - if this person never uses the service, the HMO wastes the Capitation fee. If the subscriber heavily utilizes services, provider loses money.

Case management

This is the process by which a specialist within a person’s insurer reviews potentially large claims to discuss treatment alternatives with the insured

Change of life events

Marriage, divorce, birth of a child.

Closed panel network

HMO where providers deliver services within HMO facilities

COBRA group

A group that has 20 or more employees and must comply with COBRA

Co insurance

Cost sharing formula in which subscribers pay a percentage of their medical costs up to an annual maximum

Concurrent review

A form of utilization review in which health care is being review as it is being provided. Monitors appropriateness of care with a focus on cost control

Contributory plan

Group insurance where employer and employee share cost of coverage

Copayment

Fixed dollar amount HMO subscribers pay per visit. Covers admin costs.

Creditable coverage

Defined by Hipaa as previous coverage under another insurance plan where there has not been a break in coverage that lasts 63 days or longer. When an individual changes plans, creditable coverage for pre existing conditions reduces or eliminates any new waiting period

DMO

Dental maintenance organization. Dentists contract with DMO to provide services at agreed fees. Requires primary care dentist. Subscribers are responsible for co-pays and sometimes Co insurance.

Enrollment period

Limited period in which all members may sign up for a group plan

EPO/ Exclusive Provider Organization

Hybrid of HMO and PPO - insured has direct access to any in network provider without a referral, but no coverage is provided for out of network care unless there is an emergency

Extension of benefits

Provision that allows a covered individual to continue receiving benefits for a covered claim, even after coverage ends. Extension may be fixed or for life of claim.

HIPAA

Law passed in 1997 which guarantees American workers have the ability to transfer and continue health coverage when they change or lose their jobs. Also strengthened privacy protections.

HMO

Offers comprehensive prepaid health care services. Emphasize preventative care, but also combine delivery and financing of Healthcare. Subscribers pay fixed periodic fee rather than fee per service

IPA HMOS

Independent practice association - characterized by a network of physicians who work out of their own facilities and participate in the HMO on a part time basis

Multiple employer trust MET

Combines multiple employers (10 or more) into a single poop to provide group insurance. MET holds master contract

Multiple Employer Welfare Agreement (MEWA)

Two or more employers with a common bond who join together to provide health benefits for their employees on a self insured bases. Subject to ERISA. Law treats them as Employee Welfare Benefit plans

Group model HMO (closed panel)

HMO pays a capitation for provider group, group pays the physicians for the services they provide.

Network Model HMO (closed panel)

Similar to Group Model HMO but includes more than one physician group

Open Panel Network

Form.of HMO in which providers deliver services while working out of their own offices on a part time basis

Point of Services plan

Combines in network care similar to HMO with limited out of network care resembling an indemnity plan.

Pre Admission Certification

Evaluating an individuals overall health before being hospitalized for surgery to determine whether requested treatment is medically necessary

Preferred Provider Organization

Sponsored network of health care providers that contract with the PP9 to offer their services to PPO subscribers.

Pregnancy discrimination act of 1978

Amendment to civil rights act of 1964 - pregnant women must be treated the same for employment reasons

Primary care physician PCP

Doctor who provides general medical care for individual network members (typically of HMO or POS plans) and controls referrals

Prospective review

Utilization review that involves analyzing a case before admission to determine the type of treatment that is necessary

Qualifying event (COBRA)

This type of event qualifies workers access to COBRA benefits. Termination, disability, death and divorce.

Retrospective review

Form of utilization review that occurs after medical treatment is provided.

Service basis

Type of coverage in which consumers contract with service providers (BCBS) to obtain medical services from participating providers in exchange for a premium

Service providers

In exchange for a premoum, service providers (BCBS) offer benefits to subscribers in the form of services by participating providers

Small employer

50 or fewer employees generally. Special regulars.

Small model closed panel (HMO)

Provides care through physicians and hospitals that are HMO employees

Taft-Hartley Trusts

These are trusts that are negotiated trusteeships resulting from collective bargaining between a labor union and employer

Third Party Administrators

This is an independent organization that provides administrative services for group insurance sponsors that find it more cost effective than handling such functions in house

HMO must provide

Open enrollment for 30 days- access 24/7

Federal requirements for HMO

• Employer must have at least 25 employees.

• Employer must contribute to plan

• Employer HMO cannot charge more than commercial insurance

• Must stress preventative care and cover family planning services

• Maintain minimum reserves

• Community rating

HMO coverage

• Hospital expenses

• Surgical and medical treatment

• Outpatient medical services

• Diagnosic

• Therapeutic

• Nursing

• Substandard abuse

• Home health

• Prescription drugs

Key HMO characteristics

• Comprehensive Care - essential health services

• Prepaid care - subscribers pay a fixed periodic fee. Copayments for admin costs. Some HMOs pay providers on capitative basis

• Preventative care - stressed. Preventative care without deductible.

• Funding - insurers often sponsor. Can also be self contained or self funded.

• Primary care physician is required

• Local or regional networks, not national

• Emergency care - only covered if life threatening

PPO Characteristics

• Wider choice of physicians than HMO

• Finance Healthcare only - do not deliver

• Trade access to PPO participants for negotiated contract pricing

• Fee for service- cost of service is scheduled and incurred at time of service. Cost sharing in form of coinsurance (hmo has co-pay)

• Provides coverage out of network

• Doesn’t require PCP

• Options- dental or long term care.

Actuarial value

Minimum projected percentage of medical costs that are likely to be covered by a medical expense

Basic hospital expense policies

These policies cover hospital room and board, misc hospital expenses, the use of operating rooms, and supplies

Basic hospital expenses indemnity basis

This contract is a basic hospital policy that sets benefits on an indemnity basis - fixed amount per day for room and board

Basic hospital expenses reimbursement

Basic hospital policy that reimburses insured for hospital costs up to a stated maximum benefit

Basic medical expenses insurance

This is a health insurancd policy that provides “first dollar” benefits for specified and limited health benefits

Basic physician expenses insurance

Coverage for non surgical services provided by a physician

Basic surgical expenses polciies

Pay for costs of surgeons services and anesthesiologist fees

Benefit period

The length of time benefits are paid following a loss or policy period

Bronze plan

As defined by ACA this is a metal tier plan that has an actuarial value that is projected to cover 60% of typical medical costs

Cafeteria plans

Employee benefit plans allowing employees to choose pre tax benefits (health, accident insurance)

Carryover provision

Allows expenses from last 3 months of policy year to count towards next year’s deductible

Certificate of creditable coverage

Proof of prior group coverage when changing employers (required by HIPAA")

Common accident/sickness deductible

One deductible per family if multiple members are affected by the same event

Comprehensive Major Medical Insurance

Combines basic and major medical coverage in one policy

Consumer Driven Health Plan

Includes;

• pre tax savings account

• High deductible policy

• Integrated deductible

Conversion factor

Dollar per unit value used to determine surgical benefits

Corridor deductible

Applies after basic coverage ends; major medical begins once met

Essential Health Benefits

10 AVA mandated coverage without lietime/annual limits

Flat deductible

Fixed amount per event, person or year

Flexible spending accounts

Pre tax employer accounts for medical expenses - use it or lose it

First dollar coverage

Pays claims without deductible