Key Health Coverage Definitions

Before we run through the plans, let’s make sure we cover all the terminology.

Here is a glossary containing important definitions:

All Inclusive Out-of-Pocket Maximum
The maximum amount associates and their covered dependents will pay in a calendar year. Includes deductibles, coinsurance, and medical and prescription co-pays.

Allowable Charge
The carrier determines if the cost is reasonable for care and/or supplies. Providers that do not participate with the carrier (out-of-network) may ask for full payment of services. Claims may need to be submitted for payment; the carrier will pay the allowable charge to you, less any co-payment or coinsurance after the deductible. This is the same payment that the carrier pays to the participating (in-network) providers. The member is responsible for any balance remaining, after the carrier payment.

Annual Enrollment
A period of time when associates may enroll in or make changes to their health insurance and other benefits plans.

Balance Billing
Amount owed to an out-of-network provider after deductible, coinsurance and co-pays, after the carrier’s payment has been made.

The percentage of health care costs an individual must pay, once a deductible is met. For example, many plans pay 80% or 70% of the cost of care, and the patient is responsible for the remaining 20% or 30%. Some prescription drug costs limit the amount of coinsurance a covered person must pay.

Coordination of Benefits (Birthday Rule)
If both spouses are working and carry dependent coverage, the responsibility for primary coverage falls to the parent having the earlier birthday in the calendar year, regardless of which parent is older. Coordination of Benefits does not apply to prescription drug coverage.

A specified fee an individual pays for health care services or prescriptions. For example, the patient may pay a $30 co-payment for each primary care doctor visit, or $10 for each generic prescription.

The amount an individual must pay for services before a health care plan begins to pay benefits. Most plans have a maximum family deductible that is satisfied by the combined expenses of all covered family members, generally two times the individual amount.

An “aggregate” deductible means that if more than one individual is covered, the full family deductible must be met before expenses are paid. This applies to our Green plan.

Additional members of an associate’s household are eligible to be covered by the group’s policy. Generally, these are the spouse and the children of the associate.

Effective Date
The date on which an insurance policy or benefit plan goes into effect and coverage begins.

Conditions to be met in order to receive a benefit or participate in a group benefit plan. Eligibility varies by plan. For associates, it is generally based on the associate’s full-time equivalent (FTE) status. Eligibility for dependents is based on the benefit, age and relationship to the associate.

Elimination period
The amount of time before the benefit payment will begin. Elimination periods typically refer to disability.

An emergency is defined as:

  • A condition serious enough to cause a prudent person to seek emergency care
  • A situation where a delay in care might cause permanent damage to one’s health
  • A situation where care is received within 48 hours from the onset of the condition

Note: if you use the emergency room and it is not considered an emergency, the claim will not be covered, and you will be responsible for all charges.

Evidence of Insurability (E of I)
A statement or proof of a person’s physical condition, occupation or other factors affecting his/her/their acceptance for insurance. May be required for life insurance over certain levels or for late enrollment.

Explanation of Benefits (EOB)
A statement from a health plan or insurance company sent to a group member who files a claim giving specific details about how and why benefits payments were or were not made. It summarizes the charges submitted and processed, the amount allowed, the amount paid, and the member balance, if any.

Full-Time Equivalent (FTE)
The benefits eligibility status of an associate based on the number of hours scheduled to work each week.

Guaranteed Issue Amount
The amount of life insurance an insurance company is willing to issue without evidence of insurability (proof of good health).

Health Insurance Portability & Accountability Act (HIPAA)
Federal legislation that improves access to health insurance when changing jobs by restricting certain pre-existing condition limitations. HIPAA also guarantees availability and renewability of health insurance coverage for all employers regardless of claims experience or business size.

A person who occupies a hospital bed, crib or bassinet while under observation, care, diagnosis or treatment for at least 24 hours.

Inventory Information Approval System (IIAS)
An electronic inventory system that identifies items that are eligible for purchase through an FSA or HSA.

Lifetime Maximum
The total amount a dental insurance policy will pay over the course of an individual’s lifetime.

Maximum Allowable Charge (MAC)
MAC is a method of reimbursement for charges. MAC is the discounted amount that is paid to an in-network provider for services rendered. A MAC plan pays an out-of-network provider at the same level as an in-network provider. All amounts above the MAC are the responsibility of the associate.

Medically Necessary
Services that are required to prevent harm to the patient or an adverse effect on the patient’s quality of life, as judged against generally accepted standards of medical practice. The term is most often used to determine whether or not a procedure or service is covered by insurance.

Administered by the Social Security Administration, Medicare is the federal government plan for paying certain hospital and medical expenses for those who qualify, primarily those individuals over age 65. Benefits are provided regardless of income level. The program is government-subsidized and government-operated.

Newly Eligible
Refers to individuals that are benefits-eligible for the first time due either to a new hire or status change.

A selected group of physicians, hospitals and other health care providers who participate in a managed care plan and agree to follow the plan’s procedures. Benefits for network care are generally optimized when using services provided by a participating professional.

Plan Year
The calendar or fiscal year on which the records of a benefit plan are kept. Health care plans, deductibles and benefits maximums are reset at the beginning of each plan year. Nemours’ plan year begins January 1.

The ability to retain benefits coverage when changing jobs. For life insurance, this means changing the life insurance coverage to an individual term life policy that continues as long as the insured person pays the premiums.

Pre-Existing Condition
An injury or illness for which you have been diagnosed, received treatment or incurred expenses prior to the plan effective date. This term applies to disability benefits.

Pre-Tax Contribution
Contributions that are deducted from an associate’s paycheck before federal, most state and local, and Social Security taxes are figured, reducing taxable income.

Primary Coverage
The health coverage most responsible for paying your claims if you have duplicate coverage.

Carrier-approved professionals or facilities that provide health care services, including physicians, hospitals, nurse practitioners, chiropractors, physical therapists and others.

Providers, In-Network
Health care professionals and facilities that participate in a specific plan’s network. These also are known as participating or in-network providers. After payment of coinsurance or co-payments, the carrier will pay the remaining balance.

Providers, Out-of-Network
Health care professionals and facilities that do not participate in a specific plan’s network. These also are known as non-participating or out-of-network providers. Expenses incurred from these providers may not be covered or may be only partially covered. After payment of coinsurance or co-payments, the carrier will pay the balance equivalent to the amount paid to an in-network provider; any outstanding monies owed after the carrier’s payment will be the member’s responsibility.

Qualified Life Event (Life Status/Family Status Change)
The only time, other than annual enrollment, when an associate may make changes to some of his/her/their benefits coverage. Qualifying life events include (but are not limited to) marriage or divorce, birth or adoption of a child, death of a spouse or dependent, gain or loss of associate or spouse’s employment, or a change in job status that affects benefits coverage. Changes in coverage must be made within 60 days of the date of the qualifying event.

Legally married spouses of associates are eligible to participate in the Nemours benefits program.

Summary Plan Description (SPD)
A government requirement for a written description of a benefit plan in an easy-to-read form, including a statement of eligibility, coverage, associate rights and appeal procedure. It is provided to participants, beneficiaries and the Department of Labor upon request.

The process of identifying and classifying the potential degree of risk represented by an associate who enrolls in coverage. Plans that require underwriting may ask associates to provide medical or personal information at the time of enrollment. This mostly applies to life insurance.

Waiting Period
The length of time you must be employed before you become eligible for benefits, (i.e., the first of the month following or coinciding with the date of hire).

To intentionally decline coverage in a benefits plan; some plans require proof of coverage elsewhere.