Affordable Care Act (ACA) 

The comprehensive health care reform law enacted in March 2010 (also known as “Obamacare”) that prevents health insurers from denying individuals with pre-existing conditions. ACA also provides qualifying consumers with subsidies (“premium tax credits”) that lower costs for households with incomes between 100% and 400% of the federal poverty level.

 

Advance Premium Tax Credit (APTC) 

A tax credit provided by the IRS that you can take in advance of filing your taxes for the current tax year to lower your monthly health insurance payment (your premium). If at the end of the year you’ve taken more premium tax credit in advance than you’re due based on your final income, you’ll have to pay back the excess when you file your federal tax return. If you’ve taken less than you qualify for, you’ll get the difference back. More about the APTC here. 

 

Benefits 

The items or services covered under a health insurance plan. A list of the covered benefits (and excluded services) can be found in the health insurance plan’s coverage documents. Examples include wellness and preventative care, maternity and prenatal care, behavioral health, and prescription medications. Some benefits may be included at no cost, while others may require you to make a co-payment or pay a percentage (coinsurance) of the cost for services.

 

Benefit Year 

A year of benefits coverage under an individual health insurance plan. The benefit year for plans bought on or off the Marketplace begins January 1st  of each year and ends December 31st of the same year. Some plans may start in months other than January – for instance when you sign up as a result of a “qualifying life event”.

 

Bronze Health Plan  

One of the 4 plan categories (aka “metal tiers”) in the Marketplace. Bronze plans typically have the lowest monthly premiums but the highest costs when you get care. This tier is a good choice if you don’t need a lot of medical care and want to protect yourself if you get seriously sick or injured.  (See Silver, Gold, and Platinum Health Plans)

 

Catastrophic Health Plan 

This is a type of high-deductible health plan for people under 30 or for those who qualify for a “hardship exemption” (an event that prevents an individual from obtaining health insurance). These plans are meant to protect you in a worst-case scenario (ex: a medical emergency). Monthly premiums are generally low and you pay for all health-related costs out of pocket until you reach the plan’s annual deductible, which is around $8,150 for 2020.

 

Centers for Medicare & Medicaid Services (CMS) 

The federal agency that runs the Medicare, Medicaid, Children’s Health Insurance Programs (CHIP), the federally facilitated Marketplace (FFM).

 

Children’s Health Insurance Program (CHIP) 

The insurance program that provides low-cost health coverage to children in families that earn too much money to qualify for Medicaid but not enough to buy private insurance. CHIP also covers pregnant women in some states.

 

Claim

A request for payment that you or your health care provider submits to your health insurer when you get items or services you think are covered.

 

Consolidated Omnibus Budget Reconciliation Act (COBRA) 

A federal law that enables you to temporarily keep health coverage after your employment ends, you lose coverage as a dependent of the covered employee, or another qualifying life event (QLE). In most cases, if you elect COBRA coverage, your employer may opt to pay some or all of the costs for a limited time (typically 1-3 months). Otherwise, you pay 100% of the premiums, including the share your employer used to pay, plus a small administrative fee. For more on COBRA vs. ACA coverage, check out our blog!

 

Copayment  

A fixed amount ($20, for example) you pay for a covered health care service. In most cases, copays apply only after you’ve paid your deductible. Though in some cases, they are applied immediately.

Example:

Let’s say your health insurance plan’s allowable cost for a doctor’s office visit is $100. Your copayment for a doctor’s visit is $20.

If you’ve paid your deductible: You pay $20, usually at the time of the visit.

If you haven’t met your deductible: You pay $100, the full allowable amount for the visit.

Copayments (sometimes called “copays”) can vary for different services within the same plan, like drugs, lab tests, and visits to specialists.

Generally, plans with lower monthly premiums have higher copayments. Plans with higher monthly premiums usually have lower copayments.

NOTE: Copays and deductibles are both features of most insurance plans.

A deductible is an amount that must be paid for covered healthcare services before insurance begins paying. Copays are typically charged after a deductible has already been met. In some cases, though, copays are applied immediately.

Coinsurance 

Instead of paying a fixed amount up front (a co-pay), the co-insurance is a percentage of the total cost you may be required to pay. For example, you might have to pay 20% of the cost of a surgery over and above a deductible, while the insurance company pays the other 80%.

 

Cost-Sharing Reductions (CSR)

A discount that lowers the amount you have to pay for deductibles, copayments, and coinsurance. In the Marketplace, cost-sharing reductions are also called “extra savings.” If you qualify, you must enroll in a plan in the Silver category to get the extra savings.

 

Deductible 

The amount you pay for your health care services before your health plan starts to pay. With a $2,000 deductible, for example, you pay the first $2,000 of covered services yourself. After you pay your deductible, you usually pay a smaller copayment or coinsurance for covered services, and your insurance company pays the rest.

All Marketplace health plans pay the full cost of certain preventive benefits even before you meet your deductible.

Some plans have separate deductibles for certain services, like prescription drugs.

Family plans often have both an individual deductible, which applies to each person, and a family deductible, which applies to all family members.

Generally, plans with lower monthly premiums have higher deductibles. Plans with higher monthly premiums usually have lower deductibles.

NOTE: Copays and deductibles are both features of most insurance plans.

A deductible is an amount that must be paid for covered healthcare services before insurance begins paying. Copays are typically charged after a deductible has already been met. In some cases, though, copays are applied immediately.

 

Dependent 

A child or other individual for whom a parent or guardian claims as a personal exemption on their tax deductions.

 

Drug List 

A list of prescription drugs that are covered by a prescription drug plan or another insurance plan offering prescription drug benefits.

 

Eligibility of Benefits (EOB)

An EOB is a statement from your health insurance plan describing what costs it will cover for medical care or products you’ve received. The EOB is created when your provider submits a claim for the services you received.

 

The insurance company sends you EOBs to outline:

• The cost of the care you received
• Any money you saved by visiting in-network providers
• Any out-of-pocket medical expenses you’ll have to pay

 

Essential Health Benefits (EHB)

A set of 10 categories of services health insurance plans must cover under the ACA. These include doctors’ services, inpatient and outpatient hospital care, prescription drug coverage, pregnancy and childbirth, mental health services, and more.

 

Exchange 

Another term for the Health Insurance Marketplace (aka Marketplace). A service every state provides to help individuals, families, and small businesses shop for and enroll in affordable medical insurance. Though the phrases “exchange” and “Marketplace” are interchangeable, we reference plans as either “on” or “off” the market.

 

Exclusions 

These are services that are not covered. You are generally expected to pay the full cost of non-covered services out of (your own) pocket.

 

Exclusive Provider Organization (EPO) Plan 

A managed care plan where services are covered only if you go to doctors, specialists, or hospitals in the plan’s network (except in an emergency). You can check to see if a doctor is in your plan’s network using their provider network directory.

 

Federally Facilitated Marketplace (FFM)

In a Federally-facilitated Marketplace, Health and Human Services handle all Marketplace functions. If you live in a FFM state, you can apply for and enroll in coverage through Healthcare.gov or a trusted partner, such as W3ll.

 

Federal Poverty Level (FPL) 

A measure of income issued every year by the Department of Health and Human Services (HHS). Federal poverty levels are used to determine your eligibility for certain programs and benefits, including savings on Marketplace coverage, and Medicaid and CHIP programs.

 

Gold Health Plan 

One of the 4 health plan categories (aka “metal tiers”) in the Marketplace. Gold plans typically have higher monthly premiums but lower costs when you get care. Gold is a good choice if you need a lot of care or would rather pay more upfront and know that you’ll pay less when you get care. (See Bronze, Silver, and Platinum Health Plans)

 

Grace Period 

A short period (usually 90 days), after your monthly health insurance payment is due before a service fee is added to your bill or your coverage is termed due to missed payment. To avoid losing your coverage, make a payment during that time frame.

 

Health Coverage

Legal entitlement to payment or reimbursement for all of your health care costs through a contract with a health insurance company, a group health plan, or a government program like Medicaid or CHIP.

 

Health Insurance

A contract where a health insurer pays some or all of your health care costs in exchange for a premium.

 

Health Insurance Carrier

The company that provides your insurance coverage. Also known as a health insurance company, insurer, payer, or health plan.

 

Health Maintenance Organization (HMO) 

A type of health insurance plan that generally limits coverage to care from doctors who are contracted with a specific, predetermined network of care providers. It usually won’t cover out-of-network care except in an emergency.

 

Healthcare Payer

An entity responsible for the processing of patient eligibility, services, claims, enrollment, or payment.

 

High Deductible Health Plan (HDHP) 

A plan with a higher deductible than a traditional insurance plan. The monthly premium is usually lower, but you pay more costs yourself before the insurance company starts to pay its share.

 

Health Reimbursement Account (HRA)

Employer-funded group health plans where employees are reimbursed tax-free for qualified medical expenses up to a fixed dollar amount per year. Unused amounts may be rolled over to be used in subsequent years. The employer funds and owns the arrangement.

 

Health Savings Account (HSA)

A type of savings account that lets you set aside money on a pre-tax basis to pay for qualified medical expenses. By using untaxed dollars in a Health Savings Account (HSA) to pay for deductibles, copayments, coinsurance, and some other expenses, you may be able to lower your overall health care costs, as well as your overall tax burden.

 

Individual Health Insurance Policy 

Policies for those who don’t receive job-based coverage. Individual health insurance policies are regulated under state law.

 

Individual Coverage Health Reimbursement Arrangement (ICHRA)

A type of HRA that reimburses medical expenses, like monthly premiums, and requires eligible employees and dependents to have individual health insurance coverage or Medicare Parts A (Hospital Insurance) and B (Medical Insurance) or Part C (Medicare Advantage) for each month they are covered by the individual coverage HRA.

 

Lifetime Limit 

A cap on the total benefits you may get from your insurance company over your life span.

 

Medicaid 

A public assistance program based largely on financial need and paid for with public funds collected through taxes. The insurance program provides free or low-cost health coverage to qualifying individuals, low-income people, families, and children, pregnant women, the elderly, and people with disabilities.

 

Metal Tiers 

Plans in the Marketplace are presented in 4 “metal” categories: Bronze, Silver, Gold, and Platinum.

 

Minimum Essential Coverage (MEC) 

All ACA-compliant health plans are required to help all their enrollees pay for certain medical services, no matter their health status or which plan they buy. These services include labs, emergency services, prescription drugs, mental health/substance abuse care, maternity and newborn care, pediatrics services, rehabilitative and habilitative services and devices, ambulatory patient services, preventive and wellness services and chronic disease management, and hospitalization.

 

Network 

The facilities, providers, and suppliers your health insurer or plan has contracted with to provide health care services. The insurer negotiates reduced pricing with these “in-network” entities and often pass along these reductions in costs to consumers receiving and paying for care.

 

Network Plan 

A health plan that contracts with doctors, hospitals, pharmacies, and other health care providers to provide plan members with services and supplies at a lower price than purchasing direct.

 

Non-preferred provider (aka Out-of-Network Provider)

A provider who doesn’t have a contract (is not “in-network”) with your health insurer or plan to provide services to you. If you see an out-of-network provider, you’ll pay more than if you seek in-network care. 

 

Open Enrollment Period 

The yearly period when people can enroll in a health insurance plan. Open Enrollment is typically from November 1st – December 15th.  Dates may vary depending on the type of coverage (re employer-sponsored) and state-by-state deadlines. You can apply and enroll in Medicaid or the Children’s Health Insurance Program (CHIP) any time of year.

 

Out-of-Pocket Costs 

Expenses including deductibles, coinsurance, copayments, and other costs for services that aren’t covered by your insurance plan.

 

Out-of-Pocket Estimate 

An estimate of the amount that you may have to pay for health care or prescription drug costs. The estimate is made before your health plan has processed a claim for that service.

 

Out-of-pocket Maximum 

The most you have to pay for covered services in a plan year. After you spend this amount on deductibles, copayments, and coinsurance for in-network care and services, your health plan pays 100% of the costs of covered benefits.

 

Plan Year 

A 12-month period of benefits coverage under a group health plan.  

NOTE: This year-long period may not be the same as the calendar year.  For individual health insurance policies, this is called a “benefit year”.

 

Platinum Health Plan 

One of the 4 categories (aka metal tiers) of Marketplace plans. Platinum plans typically have the highest monthly premiums of any plan category but pay the most when you get care. This is a good option if you typically receive a lot of care and are willing to pay a high monthly premium, knowing almost all other costs will be covered. (See Bronze, Silver, and Gold Health Plans)

 

Premium 

The amount you pay your health insurance company for your health plan every month. This does not include other health insurance-related costs, such as your deductible, copayments, coinsurance, or out-of-pocket expenses.

 

Qualified Health Plan 

An insurance plan that is certified by the Marketplace, provides essential health benefits, follows the set limits on cost-sharing (like deductibles, copayments, co-insurance, and out-of-pocket max amounts), and meets other requirements under the ACA.

 

Qualifying Life Event (QLE) 

A life change, such as moving, getting married, having/adopting a child, or losing your job, making you eligible for a Special Enrollment Period (SEP), and allowing you to enroll in health insurance outside the annual Open Enrollment Period.

 

Star ratings (or Quality ratings)

Ratings of health plan quality used in the Marketplace. Each rated health plan has an “Overall” quality rating, which accounts for member experience, medical care, and health plan administration. This gives you the ability to quickly compare plans based on quality. Check out our blog for more info on star ratings! 

 

Silver Health Plan 

The most popular of the 4 categories (aka: “metal tiers”) of Marketplace plans. With Silver plans, you pay moderate monthly premiums and moderate costs when you need care. This is a good tier for you if you qualify for “extra savings” — or, if not, if you’re willing to pay a slightly higher monthly premium than Bronze to have more of your routine care covered.

 

NOTE: if you qualify for “cost-sharing reductions” or “extra savings” you can save a lot of money on deductibles, copayments, and coinsurance when you get care — but only with a Silver plan.  (See Bronze, Gold, and Platinum Health Plans)

 

Special Enrollment Period (SEP) 

Any time outside the yearly Open Enrollment Period when you can enroll in health insurance. You qualify for a SEP if you’ve had certain life events, including losing your job, moving, getting married, or having/adopting a child. You have 60 days before or 60 days following the event to enroll in a plan.

 

State-Based Marketplace (SBM) (aka State-Based Exchanges SBE)

Health insurance exchanges offered through a state agency. If your state has a marketplace, you don’t use HealthCare.gov but enroll through your state website.

 

Subsidized Coverage 

Health coverage available at little to no cost to individuals with incomes below certain levels. Medicaid and Children’s Health Insurance Program (CHIP) are examples of this type of coverage. Marketplace plans with premium tax credits are also known as subsidized coverage.

 

Summary of Benefits and Coverage (SBC) 

An easy-to-read snapshot of a health plan’s costs, benefits, covered health care services, and other features that may be important to you.