| Term |
Definition |
| Attained Age |
An individual's age at his or her last birthday. |
| Benefits |
The amount paid by the insurance company to a claimant
or beneficiary under the policy.
|
| Calendar Year Deductible |
A deductible amount that applies to all eligible medical
or Rx expenses with a date of service during one calendar
year, beginning January 1st and ending December 31st.
|
| Carve Out |
A program separate from the primary group health plan
designed to provide a specialized type of care, such as
a retiree health carve-out.
|
| Claim |
A request for payment for benefit or services received.
|
| Co-insurance |
The insured’s share of covered health insurance
benefits, usually a percentage.
|
| Composite Rate |
A group premium rate that does not differentiate between
age, gender, geographical location, and other demographics.
|
| Co-payment |
The insured’s share of covered health insurance
benefits, usually a flat, preset fee.
|
| Coverage |
The protection provided under a contract of insurance.
|
| Deductible |
The amount stated in the policy that the insured must
pay, if applicable, in the event of a covered loss, before
health benefits are paid.
|
| Experience Rating |
A method of rating, which takes into consideration
the loss history of a particular risk and applies a credit
or debit to future rates accordingly.
|
| FASB 106 |
Financial Accounting Standards Board- This ruling requires
companies to use an accrual accounting liability format
for their retiree health care plan.
|
| Flexible Benefit Plan |
Offered by employers to employees and allows the employee
some choices in the benefits, coverages and limits selected.
|
| Formulary |
A specific list of drugs included in a given plan for
a client. Insured members are covered for those specific
prescriptions when the drugs appear on the formulary list.
|
| GASB |
Governmental Accounting Standards Board. An independent
not-for-profit organization formed in 1984 that establishes
and improves financial accrual accounting and reporting
standards for state and local governments.
|
| Generic Drug |
A drug that is therapeutically equivalent (identical
in strength, concentration, and dosage form) to a brand-name
drug and that generally is made available when patent
protection expires on the brand-name drug. The term is
commonly used to identify a non-brand drug that is sold
at a lower cost and generally requires a lower co-payment
amount by the member selecting the generic drug.
|
| Group Insurance |
Insuring a number of persons under a single master
contract.
|
| Guaranteed Issue |
A group insurance plan in which the insurer does not
require individual persons to provide evidence of insurability
to obtain coverage.
|
| Health Insurance |
Coverage for hospital, physician, and other medical
expenses resulting from illness or injury.
|
Health Maintenance Organization (HMO)
|
A prepaid medical group practice plan that provides
a predetermined medical care benefit package.
|
| HIPAA |
HIPAA is the Health Insurance Portability and Accountability
Act of 1996. HIPAA has national standards for electronic
health care transactions and national identifiers for
providers, health plans, and employers. HIPAA also addresses
the security and privacy of health data. (See HIPAA Privacy Notice and Hartford Privacy Policy)
|
| Insured |
The person or organization to be protected by an insurance
policy.
|
| Insurer |
The insurance company or other organization that is
providing insurance coverage to policyholders.
|
| Loss |
An occurrence, which is reported to the insurance company
and may result in payment to the insured or other claimant.
|
| Medicare |
The U.S. Federal Government plan for paying certain
hospital and medical expenses for those who qualify, primarily
those over 65 years of age.
|
| Multiple Employer Trust (MET) |
A legal trust formed by a health benefit plan sponsor
to combine a number of small unrelated employers for the
purpose of providing group medical coverage on an insured
or group self-insured basis. Claims experience is usually
pooled together.
|
| Open Formulary |
A list of drugs that typically includes a large number
of products and to which new drugs are easily added.
|
| Pharmacy Benefit Manager |
An organization that provides programs and services
designed to help maximize drug effectiveness and contain
drug expenditures by influencing the behaviors of prescribing
physicians, pharmacists, and members.
|
| Policy |
The contact of insurance, which sets forth the promises
of the insurance company and the duties of the insured.
|
| Pre-Existing Condition |
Loss from injury or illness, which occurs earlier than
the date on which insurance became effective.
|
| Preferred Drug List |
A list of preferred pharmaceutical substances for selected
prevalent pharmacologic or therapeutic classes in the
standard formulary; designed to maximize clinical and
economic benefits and used exclusively in support of performance
benefit management.
|
| Premium |
The amount an insurance company charges as consideration
for coverage.
|
| Quote |
An offer made by an insurer to an employer outlining
the terms and conditions for which an insurance contract
will be provided.
|
| Stand-Alone |
A single employer group with its own insurance contract
designed to insure only its retirees. Claims experience
and rates are based only on the one group and not pooled
with other groups.
|
| Third Party Administrator (TPA)
|
An entity that has been contracted by an insurer to administer
identified services. These services may include claims
administration, premium collection, enrollment, and other
administrative functions.
|
| Underwriter |
A person who works for an insurance company accepts or
rejects risks on behalf of the company; his/her duty is
to prevent the adverse selection of risk.
|
| Underwriting |
The process identifies and classifies the potential degree
of risk; the purpose of underwriting is to avoid the adverse
selection of risk.
|
