Affordable Care Act (ACA)
The federal health care reform law enacted on March 23, 2010.
Advanced Premium Tax Credit (APTC)
The Affordable Care Act (ACA) provides a new tax credit to help certain individuals afford health coverage purchased through an exchange/marketplace. 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 of the advance credit payments to apply to your premium 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. Also called premium tax credit or tax credit.
The health care items or services covered under a health insurance plan. Covered benefits and excluded services are defined in the health insurance plan's coverage documents. In Medicaid or the Children’s Health Insurance Program (CHIP), covered benefits and excluded services are defined in state program rules.
An agent or broker is a person or business who can help you apply for help paying for coverage and enrolling in a Qualified Health Plan (QHP). They can help you get coverage through an exchange/marketplace, or directly from a health insurer. They can make specific recommendations about which plan you should enroll in. They’re also licensed and regulated by states. Agents and brokers usually get payments, or commissions, from health insurers for enrolling a consumer into an issuer's plans. Some brokers may only be able to sell plans from specific health insurers.
Catastrophic Health Plan
Health plans that meet all the requirements that apply to other Qualified Health Plans (QHPs). Catastrophic plans differ from other QHPs in that, except for the first three primary care visits per year, these plans pay no benefits until the plan's high deductible is met.
The premium amount you pay each month for health care is generally lower than for other individual plans, but the out-of-pocket costs for deductibles, copayments, and coinsurance are generally higher.
To qualify for a catastrophic plan, you must be under 30 years old or get a "hardship exemption" because the exchange or marketplace determined that you’re unable to afford health coverage.
Children’s Health Insurance Program (CHIP)
Insurance program jointly funded by state and federal government. It provides health coverage to low-income children. In some states, it also covers pregnant women in families who earn too much income to qualify for Medicaid but can’t afford to purchase private health insurance coverage.
A request for payment that you or your health care provider submits to your health insurer when you receive items or health services you think are covered.
Your share of the costs of a covered health care service, calculated as a percentage (for example, 20 percent) of the amount allowed for the service. You pay coinsurance plus any deductibles you owe. For example, if the health insurance or 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.
Copay (or Copayment)
A fixed amount (for example, $15) you 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.
The share of costs covered by your insurance that you pay out of your own pocket. This term generally includes deductibles, coinsurance, and copayments, or similar charges, but it doesn't include premiums, balance billing amounts for non-network providers, or the cost of non-covered or out-of-network services. Cost sharing in Medicaid and the Children’s Health Insurance Program (CHIP) also includes premiums.
A discount that lowers the amount you have to pay out-of-pocket for deductibles, coinsurance, and copayments. You can get this reduction if you get health insurance through an individual exchange/marketplace, your income is below a certain level, and you choose a health plan from the Silver plan category (See Health Plan Categories). If you're a member of a federally recognized tribe, you may qualify for additional cost-sharing benefits.
The amount you owe for health care services your health insurance or plan covers before your health insurance or plan begins to pay. For example, if your deductible is $1,000, your plan won’t pay anything until you’ve met your $1,000 deductible for covered health care services subject to the deductible. The deductible may not apply to all services.
A child or other individual for whom a parent, relative or other person may claim a personal exemption tax deduction. Under the Affordable Care Act, individuals may be able to claim a premium tax credit to help cover the cost of coverage for themselves and their dependents.
Essential Health Benefits (EHBs)
A set of health care service categories that must be covered by certain plans, starting in 2014.The Affordable Care Act make sure nongrandfathered health plans offered in the individual and small group markets, both inside and outside of exchanges/marketplaces, offer a comprehensive package of items and services. These items and services are known as essential health benefits. Essential health benefits must include items and services within at least the following 10 categories (see below). Insurance policies must cover these benefits in order to be certified and offered on an exchange/marketplace. All Medicaid state plans must cover these services by 2014.
They also include information on programs that help people pay for coverage, including ways to save on monthly premiums and out-of-pocket costs, and other programs like Medicaid and the Children’s Health Insurance Program (CHIP). Individuals and families can apply for coverage online, by phone, or with a paper application.
Exchanges are also called “marketplaces.” The exchange run by the federal government is called the Health Insurance Marketplace. States running their own exchange may also name their exchanges – for example, “Access Health Connecticut” or “Covered California.”
The exchanges are just one option for small businesses and for individuals and families who do not qualify for financial assistance on the exchanges. These businesses and consumers also can shop for coverage the same way they always have, through brokers and agents or directly from health insurers.
Explanation of Benefits (EOB)
This is a statement a health plan sends to a health plan member. It shows what the doctor, facility or other provider charged, what your health plan paid, and any money you need to pay.
Flexible Spending Account (FSA)
An arrangement you set up through your employer to pay for many of your out-of-pocket medical expenses with tax-free dollars. These expenses include insurance copayments and deductibles, and qualified prescription drugs, insulin and medical devices. You decide how much of your pre-tax wages you want taken out of your paycheck and put into an FSA. You don’t have to pay taxes on this money. Your employer’s plan sets a limit on the amount you can put into an FSA each year.
You can’t carry over FSA funds. This means that FSA funds you don’t spend by the end of the plan year can’t be used for expenses in the next year. Your employer may grant an exception: if your employer’s FSA plan allows you to use the previous year’s FSA funds for expenses incurred during a grace period of up to 2.5 months after the end of the FSA plan year.
Formulary (also “Drug List” or “Preferred Drug List”)
A list of prescription drugs covered by a pharmacy plan or another insurance plan that offers prescription drug benefits.
Grandfathered Health Plan
A group health plan that was created - or an individual health insurance policy that was purchased - on or before March 23, 2010. Grandfathered plans don not have to make many of the changes required under the Affordable Care Act (ACA). Plans or policies may lose their “grandfathered” status if they make certain significant changes that reduce benefits or increase costs to consumers. A health plan must disclose in its plan materials if it considers itself to be a grandfathered plan and must also advise consumers how to contact the U.S. Department of Labor or the U.S. Department of Health and Human Services with questions. (Note: If you are in a group health plan, the date you joined may not reflect the date the plan was created. New employees and new family members may be added to grandfathered group plans after March 23, 2010.)
A requirement that health plans must permit you to enroll regardless of health status, age, gender or other factors that might predict the use of health services.
Health Maintenance Organization (HMO)
A type of health insurance plan that usually limits coverage to care from doctors who work for or contract with the HMO. It generally won't cover out-of-network care except in an emergency. An HMO may require you to live or work in its service area to be eligible for coverage. HMOs often provide integrated care and focus on prevention and wellness.
Health plan categories (also known as “metallic plan levels”)
Plans sold on an exchange/marketplace are primarily separated into four health plan categories — Bronze, Silver, Gold or Platinum. The categories are based on the percentage the plan pays of the average overall cost of providing essential health benefits to members. The plan category you choose affects the total amount you'll likely spend for essential health benefits during the year. The percentages the plans will spend, on average, are:
This isn't the same as coinsurance, in which you pay a specific percentage of the cost of a specific service.
These categories also apply to health plans sold to individuals and small businesses outside of an exchange/marketplace.
Health Reimbursement Arrangement (HRA)
If you are enrolled in a high-deductible health plan, your employer may offer an HRA to help cover part of your health care costs. Your employer puts money into the fund. You can use the fund to pay deductibles, coinsurance and other covered health care costs. Unused money can usually be rolled over and used in the next plan year. You cannot take your HRA with you if you change or lose your job.
Health Savings Account (HSA)
A medical savings account available if you are enrolled in a high-deductible health plan. The funds put into the account aren't subject to federal income tax at the time of deposit.
Money in an HSA must be used to pay for qualified medical expenses. Unlike a Flexible Spending Account (FSA), funds roll over year to year if you don't spend them. You can take your HSA with you if you change or lose your job.
High-Deductible Health Plan (HDHP)
A high-deductible health plan is a plan that features a higher deductible which usually means that monthly premiums are lower. A member must be enrolled in a HDHP in order to have a health savings account (HSA) or health reimbursement arrangement (HRA). These funds can help members cover part of their deductible as well as other health care costs.
The Health Insurance Portability and Accountability Act of 1996 (HIPAA). This law protects health insurance coverage for workers and their families when they change or lose their jobs. It also requires standards for electronic health care transactions. This law was amended to add privacy rules that became effective April 14, 2003.
In-Person Assistance Personnel Program
Individuals or organizations that are trained and able to provide help to consumers, small businesses, and their employees as they look for health coverage options through an exchange/marketplace, including helping them complete eligibility and enrollment forms. These individuals and organizations must be unbiased – for example, they cannot work for a health insurance company. Their services are free to consumers.
A requirement that all individuals have health insurance coverage. Starting January 1, 2014, if someone doesn't have a health plan that qualifies as minimum essential coverage, he or she may have to pay a fee that increases every year: from 1 percent of income (or $95 per adult, whichever is higher) in 2014 to 2.5 percent of income (or $695 per adult) in 2016. The fee for children is half the adult amount. The fee is paid on the 2014 federal income tax form, which is completed in 2015. People with very low incomes and others may be able to have the fee waived.
A state-administered health insurance program for low-income families and children, pregnant women, the elderly, people with disabilities, and in some states, other adults. The federal government provides a portion of the funding for Medicaid and sets guidelines for the program. States can choose how they design their program, so Medicaid varies state by state and may have a different name in your state.
A federal health insurance program for people who are age 65 or older and certain younger people with disabilities. It also covers people with end-stage renal disease (permanent kidney failure requiring dialysis or a transplant, sometimes called ESRD).
Metallic plan levels
See "Health Plan Categories"
Minimum Essential Coverage
The type of coverage you need to have to meet the individual responsibility requirement (individual mandate) under the Affordable Care Act. This includes individual plans purchased through an exchange or outside of the exchange, most coverage you get through your employer, Medicare, Medicaid, CHIP, TRICARE and certain other coverage types.
A health plan meets this standard if it’s designed to pay at least 60 percent of the total cost of medical services for a standard population. Starting in 2014, if your employer offers coverage that meets this requirement and is affordable (which means it does not cost more than 9.5 percent of your annual income), then you are not eligible for financial assistance on a public exchange, although you can still shop for a plan there.
An individual or organization that's trained and able to help consumers, small businesses and their employees as they look for health coverage options through an exchange/marketplace, including completing eligibility and enrollment forms. These individuals and organizations must be unbiased, meaning they cannot be part of a health insurance company. Their services are free to consumers.
The facilities, providers and suppliers your health insurer or plan has contracted with to provide health care services, often at a discounted rate.
Open Enrollment Period
The period of time during which individuals who are eligible to enroll in a Qualified Health Plan can enroll in a plan through an exchange/marketplace. For 2014, the open enrollment period is October 1, 2013 to March 31, 2014. For plans that begin 2015 or later, the open enrollment period will be October 15 to December 7 of the previous year. Individuals may also qualify for special enrollment periods outside of open enrollment if they experience certain events. (See Special Enrollment Period and Qualifying Life Event)
The open enrollment period applies to plans sold outside of an exchange/marketplace as well – for example, a plan purchased directly from an insurance carrier or through a broker.
Your expenses for medical care that aren't reimbursed by your insurance plan. Out-of-pocket costs include deductibles, coinsurance and copayments for covered services plus all costs for services that aren't covered.
The most you pay during a policy period (usually a year) before your health insurance or plan begins to pay 100 percent of the allowed amount. This limit never includes your premium, balance-billed charges, or health care your health insurance or plan doesn’t cover. In Medicaid and the Children’s Health Insurance Program (CHIP), the limit includes premiums.
A type of plan in which you pay less if you use doctors, hospitals and other health care providers who belong to the plan’s network. POS plans may also require you to get a referral from your primary care doctor in order to see a specialist.
Preferred Provider Organization (PPO)
A type of plan that contracts with medical providers, such as hospitals and doctors, to create a network of participating providers. You pay less if you use providers that belong to the plan’s network. You can use doctors, hospitals and providers outside of the network for an additional cost.
The amount that must be paid for your health insurance or plan. You and/or your employer usually pay it monthly, quarterly or yearly.
Preventive Care/Wellness Services
Routine health care that includes screenings, check-ups, and patient counseling to prevent illnesses, disease, or other health problems. Preventive care services must be covered at no cost to you by your health plan, based on Affordable Care Act (ACA) requirements (unless you are in a grandfathered plan).
Primary Care Physician (PCP)
A physician (M.D. – medical doctor or D.O. – doctor of osteopathic medicine) who directly provides or coordinates a range of health care services for a patient.
Prior Authorization (Also known as “precertification” or “preauthorization”)
Approval from a health plan that may be required before you get a service or fill a prescription in order for the service or prescription to be covered by your plan.
Qualified Health Plan (QHP)
Under the Affordable Care Act, starting in 2014, a QHP is an insurance plan that is certified by the exchange/marketplace. It must provide essential health benefits, follows established limits on cost-sharing (like deductibles, copayments, and out-of-pocket maximum amounts), and meets other requirements. A qualified health plan will have a certification by each exchange/marketplace in which it is sold. Plans sold outside of the exchanges to individuals and small businesses may also be certified as QHPs.
Qualifying Life Event
A change in your life that can make you eligible for a Special Enrollment Period to enroll in health coverage. Examples of qualifying life events are moving to a new state, changes in your income, and changes in your family size (for example, if you marry, divorce, or have a baby).
Special Enrollment Period
A time outside of the Open Enrollment Period during which you and your family have a right to sign up for job-based health coverage. Job-based plans must provide a special enrollment period of 30 days following certain life events that involve a change in family status (for example, marriage or birth of a child) or loss of other job-based health coverage.
A physician specialist focuses on a specific area of medicine or a group of patients to diagnose, manage, prevent or treat certain types of symptoms and conditions. A non-physician specialist is a health care provider who has advanced training in a specific area of health care.
See Advance Premium Tax Credit (APTC)
Programs intended to improve and promote health and fitness. They are usually offered through the workplace, although insurance plans can offer them directly to you. The programs allow your employer or plan to offer you premium discounts, cash rewards, gym memberships and other incentives to participate. Some examples of wellness programs include programs to help you stop smoking, diabetes management programs, weight loss programs and preventive health screenings.