The start of a new year is a time for reflection, resolutions, and reviewing your health insurance. Whether you re-enrolled in the same plan you had in 2019, switched your plan or insurance provider, or have just enrolled in health insurance for the first time, it helps to get familiar with common health insurance terms. We’ve compiled a list of key definitions that can help you better understand and navigate your plan.
· Health Insurance: A kind of insurance coverage that covers medical expenses for illnesses, injuries, and medical conditions. It can reimburse you for expenses or pay your care provider directly.
· Contract: Also known as a “benefit plan year”, the 12-month period that begins on the effective date of your health insurance plan.
· Subscriber: An individual who enrolls in a health insurance plan and is eligible to receive covered health care services. Also known as the policyholder, this person may have dependents who are members of the plan.
· Dependent: A spouse, child, adopted child, or stepchild of the person who carries the health insurance coverage.
· Coinsurance: A sharing of health care costs in which you and your insurance company each pay a percentage.
· Copayment: Also known as a “copay”, a fixed amount that you pay for a certain health care service.
· Deductible: A specific dollar amount that you must pay each year for your health care expenses before your insurance company starts to pay.
· Out-of-pocket maximum: Limits the total amount you must pay each calendar year for health care expenses, including deductibles, copayments, and coinsurance. Monthly health insurance premiums do not count toward the out-of-pocket maximum
· Flexible spending account (FSA): A special account you use to pay for certain medical and dental costs not covered by your health insurance plan. You contribute the money to your FSA, and all of it must be used by the end of the plan year or you will lose it. FSA money is not taxed, so when you pay for healthcare, it's like getting a discount.
· Health savings account (HSA): A tax-free savings account that you may use with a high-deductible health plan (HDHP). The HSA allows you to set aside pre-tax money to pay for qualified health care expenses not covered by the health plan.
· In-network: Doctors and other health care providers who participate in a health insurance plan's provider network and agree to accept the plan's negotiated payment for services. You typically pay less out of your pocket when you use in-network providers.
· Out-of-network: Doctors and other health care providers who do not participate in a health insurance plan's provider network. You may be required to pay more out of your pocket when you use out-of-network providers.
· Prior authorization: A decision by your health insurer or plan that a health care service, treatment plan, prescription drug, or durable medical equipment is medically necessary. This is also sometimes called preauthorization, prior approval, or precertification. Your health insurance or plan may require preauthorization for certain services before you receive them, except in an emergency. Prior authorization isn’t a promise your health insurance or plan will cover the cost.
· Provider: A health care professional or facility that provide you with health care services. There are many types of providers, from hospitals and nursing homes to doctors and mental health counselors.
· Primary Care Provider (PCP): A doctor who provides your everyday care. Your PCP may refer you to a specialist, a doctor who provides services other than primary care – like an allergist or dermatologist.
We know that healthcare can be confusing, that’s why we’re here to help. Click here for more member resources, and check out this healthcare glossary from our partners at ConnectiCare for additional definitions.