Health Insurance Glossary C - F

For this health insurance glossary C-F, please note that definitions of terms may vary among insurance companies and across states.

For this health insurance glossary, please note that definitions of terms may vary among insurance companies and across states.

C

Cafeteria Plan: Generic term for an employee benefit plan that allows employees to select from among various choices of group insurance plans for life, medical expense, disability, dental, vision and other plans to meet their respective needs. Also called Flexible Benefit Plans.

Calendar Year Deductible: Amount payable by an insured during a calendar year before an insurance plan begins to pay for medical claims.

Capitation: A method of compensation sometimes employed by health insurance companies, in which payment is made to a healthcare provider on a per-patient rather than a per-service basis. Under capitation a doctor may be paid a fixed amount each month to serve as the primary care physician for a specific number of plan members assigned for care, regardless of the amount of care each member needs.

Carrier: Any insurer, managed care organization, or group hospital plan, as defined by applicable state law.

Carry-over Provision: A provision of some health insurance plans allowing medical expenses paid for by the member in the last three months of the year to be carried over and applied toward the next year's deductible.

Case Management: When a member requires a great deal of medical care, the health insurance company may assign the member to case management. A case manager will work with the patient's healthcare providers to assist in the management of the patient's long-term needs with the objective of ensuring that the member's health insurance benefits are being properly utilized and that non-covered services are avoided.

Certificate of Insurance: A summary statement of coverage issued to an individual member under a group insurance contract outlining the benefits and principle provisions applicable to the member as evidence of coverage. Also called Certificate of Coverage.

Chiropractic: Services provided by a licensed chiropractor.

Chronic Condition: A medical condition is that may or may not be serious but is permanent, recurring or long lasting.

Claim: A bill for medical services rendered, typically submitted to the insurance company by a healthcare provider.

Coinsurance: The amount that a patient is obliged to pay for covered medical services after satisfaction any co-payment or deductible required by the health insurance plan. Coinsurance is typically expressed as a percentage of the charge or allowable charge for a service rendered by a healthcare provider.

Company: The insurance company that is offering a health insurance plan.

Comprehensive Major Medical Insurance: A policy designed to offer protection given by both a basic medical plan and a major medical insurance policy. It is often characterized by rich benefits of a low deductible, low co-pays, a high coinsurance feature and high maximum benefits, and can cost high premiums.

Concealment: Deliberate failure or omission by an applicant to reveal material facts about health history or conditions to the insurer.

Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA): Federal legislation allowing an employee or an employee's dependents to maintain group health insurance coverage through an employer's health insurance plan, if the employer has 20 or more full time employees, at the individual's expense, for up to 18 months in certain circumstances. COBRA coverage may be extended beyond 18 months under certain conditions. COBRA rules typically apply when an employee loses coverage through loss of employment or due to a reduction in work hours. COBRA benefits also extend to spouses or other dependents in case of divorce or the death of the employee.

Contributory: A group insurance plan issued to an employers under which both the employer and employees contribute to the premium cost. Typically a minimum ofseventy-five percent of employees must participate.

Coordination of Benefits (COB): This is the process by which a health insurance company determines if it should be the primary or secondary payer of medical claims for a patient who has coverage from more than one health insurance policy.

Co-Payment: A specific charge that a health insurance plan may require that a patient pay for a specific medical service or supply, also referred to as a "co-pay."

Creditable Coverage: The purpose of this is to give an insured credit for prior healthcare coverage. Upon termination of coverage, the insured is given a “Certificate of Creditable Coverage” that will show the length of time of coverage and the termination date. It’s importance is in securing replacement coverage. It is a factor in determining coverage for preexisting conditions.

D

Date of Service: The date on which a healthcare service was provided.

Deductible: A specific dollar amount that a health insurance company may require that the patient pay out-of-pocket each year before the health insurance plan begins to make payments for claims. Not all health insurance plans require a deductible. As a general rule the lower the deductible the higher the premium.

Department of Health and Human Services: A department of the US federal government responsible for certain social service functions, such as the administration and supervision of the Medicare program.

Dependent Coverage: Health insurance coverage extended to the spouse and unmarried children of the primary insured member. Certain age restrictions on the coverage of children usually apply.

Drug Formulary: A list of prescription medications selected for coverage under a health insurance plan. Drugs may be included on a drug formulary based upon their effectiveness, safety and cost-effectiveness. Some health insurance plans may require that patients obtain preauthorization before non-formulary drugs are covered and may require that a patient pay a greater share of a non-formulary prescription.

Drug Maintenance List: A list of commonly prescribed drugs intended for patients' ongoing or long-term use.

Drug Utilization Review (DUR): The process by which health insurance companies evaluate the use of prescription drugs for appropriateness in the treatment of a patient.

Durable Medical Equipment (DME): Medical equipment used in the course of treatment or home care, including such items as crutches, knee braces, wheelchairs, hospital beds, prostheses, etc.. Coverage levels for DME often differ from coverage levels for office visits and other medical services.

E

Effective Date: The date on which health insurance coverage comes into effect.

Eligibility Date: The date on which a person becomes eligible for insurance benefits.

Eligibility Requirements: Conditions that must be met in order for an individual or group to be considered eligible for insurance coverage.

Eligible Dependent: A dependent, usually a spouse or child, of an insured person who is eligible for insurance coverage.

Eligible Employee: An employee who is eligible for insurance coverage based upon the employer stipulations of the group health insurance plan.

Eligible Expenses: Expenses defined by the health insurance plan as eligible for coverage.

Eligible Person: A person who is eligible for insurance coverage even though he or she may not be an employee, but rather a member of a covered organization, association or union.

Emergency Room: A hospital or medical facility entry portal in which services are provided when a patient visits for an emergency condition. An emergency condition is any medical condition of recent onset and severity that would lead to a prudent layperson to believe that the condition, sickness, or injury is of such a nature that failure to obtain immediate medical care could seriously jeopardize the patient’s health or life.

Employee Contribution: The portion of the health insurance premium paid by the employee, usually deducted from wages by the employer.

Employer Contribution: The portion of an employee's health insurance premium paid by the employer.

Employment Retiree Income Security Act of 1974 (ERISA): Federal legislation designed to protect the rights of retirees and beneficiaries of benefit plans offered by employers.

Enrollment: The process through which an approved applicant is signed up with the health insurance company and coverage is made effective.

Enrollment Period: The period of time during which an eligible employee or other eligible person may sign up for a group health insurance plan.

Estimated Cost: The amount quoted as an anticipated cost of a health plan, subject to change based on patient medical history, plan underwriting practices, optional benefits selected and other relevant factors.

Evidence of Insurability: An individual or family health plan applicant may be asked to confirm personal health conditions in writing through a questionnaire and/or through a medical examination or physicians report to assess risk and insurability. For a group health insurance applicant , evidence of insurability is only required in specific cases, such as when a group member fails to enroll during the enrollment period or has discontinuity of prior coverage.

Examination: This typically refers to a medical examination on a patient performed as part of an application for a life or health insurance plan.

Exclusions: Specific conditions, services or treatments for which a health insurance plan will not provide coverage.

Exclusive Provider Organization (EPO): An organization contracted with a single, exclusive healthcare service provider network and for which there are no out-of-network benefits.

Experimental Procedures: Any healthcare services, supplies, procedures, therapies or devices the effectiveness of which a health insurance company considers unproven and which are generally excluded from coverage.

Explanation of Benefits (EOB): A statement sent from the health insurance company to a patient listing services that were billed by a healthcare provider, how those charges were processed, and the total amount of patient responsibility for the claim.

Extended Coverage: A provision of some health insurance plans allowing for coverage of certain healthcare services for a continuing condition after the member is no longer covered on the plan.

Extension of Benefits: A provision of some health insurance plans that allow for coverage to be extended beyond a scheduled termination date. The extended coverage is made available only when the member is disabled or hospitalized as of the intended termination date, and continues only until the patient leaves the hospital or returns to work.

F

Fee-For-Service Plan: A health insurance plan that allows the patient great freedom in choosing healthcare providers and that typically pays a percentage of charges for services and that requires a deductible amount paid by the patient. This plan model allows more options, but may cost more. Also known as an “Indemnity Plan.

For a term beginning with A or B, go to Glossary A-B;

For a term beginning with G, H, I, J, K, L or M, go to , go to Glossary G-M;

For a term beginning with N, O, P or Q, go to Glossary N-Q;

For a term beginning with R, S, T, U, V, W, X, Y or Z,, go to Glossary R-Z;