Insurance Glossary
Plain-language definitions of the terms you'll encounter when shopping for health coverage.
Health insurance is full of jargon. This glossary defines the terms Kevin uses most often with clients so when he explains your options, you know exactly what he's talking about.
A
ACA (Affordable Care Act)
Federal legislation that established the health insurance marketplace, required minimum coverage standards, protected people with pre-existing conditions, and created income-based premium subsidies.
Allowable Charge
The maximum amount an insurer will pay for a specific service. Providers who accept your insurance agree to this rate.
Annual Limit
The maximum amount a plan will pay for covered benefits in a plan year. ACA-compliant plans cannot have annual limits on essential health benefits.
C
Carrier
An insurance company that underwrites and administers health insurance plans (e.g., UnitedHealthcare, Blue Cross Blue Shield, Cigna).
Coinsurance
The percentage of costs you pay after meeting your deductible. If your plan has 20% coinsurance, you pay 20% and insurance pays 80% of covered services.
Copay
A fixed dollar amount you pay for a covered service (e.g., $30 per primary care visit, $60 per specialist visit), usually regardless of whether you've met your deductible.
Cost Sharing
The portion of healthcare costs you're responsible for, including deductibles, copays, and coinsurance.
D
Deductible
The amount you pay for covered health services before your insurance plan starts to pay. Example: if your deductible is $2,000, you pay the first $2,000 of covered services each year.
Dependent
A family member (spouse, child) who is covered under your health insurance plan. Children can typically be covered as dependents until age 26.
E
Effective Date
The date your health insurance coverage begins. ACA plans typically start on the 1st of the month following enrollment; private plans may start sooner.
EOB (Explanation of Benefits)
A document sent by your insurer after you receive care that explains what services were billed, what insurance covered, and what you owe. It is not a bill.
Essential Health Benefits (EHBs)
Ten categories of coverage that all ACA-compliant plans must provide: ambulatory services, emergency care, hospitalization, maternity care, mental health, prescription drugs, rehabilitative services, lab services, preventive care, and pediatric care.
H
HMO (Health Maintenance Organization)
A plan type requiring you to choose a primary care physician (PCP) who coordinates all your care. Referrals are typically required to see specialists. Tend to have lower premiums than PPOs but less flexibility.
HSA (Health Savings Account)
A tax-advantaged account you can use to pay for qualified medical expenses. Available only with High-Deductible Health Plans (HDHPs). Contributions, growth, and withdrawals for medical expenses are all tax-free.
N
Network
The group of doctors, hospitals, and providers who have agreed to provide services at negotiated rates for a particular insurance plan. Using in-network providers is almost always less expensive.
NPN (National Producer Number)
A unique identifier assigned to licensed insurance producers by the National Insurance Producer Registry (NIPR). Kevin's NPN is 14158956. You can use it to verify his license at nipr.com.
O
Open Enrollment
The annual period during which you can enroll in, change, or drop an ACA marketplace plan. Runs November 1 – January 15 for most states. Private PPO plans are available year-round.
Out-of-Pocket Maximum
The most you'll pay for covered services in a plan year. After you reach this limit, your insurance pays 100% of covered costs for the rest of the year. Does not include premiums.
Out-of-Network
A provider who has not contracted with your insurance plan. Using out-of-network providers typically costs more — or may not be covered at all, depending on your plan type.
P
PPO (Preferred Provider Organization)
A plan type that lets you see any licensed provider without a referral. In-network care costs less; out-of-network care is covered at a lower rate rather than not at all. Kevin specializes in Private PPO plans.
Premium
Your monthly payment to maintain health coverage, regardless of whether you use any services. Premiums can be partially or fully offset by ACA subsidies for qualifying individuals.
Prior Authorization
Approval from your insurer required before receiving certain services or medications. Required by most plans for non-emergency procedures, specialty drugs, and some specialist visits.
S
Special Enrollment Period (SEP)
A window outside of Open Enrollment when you can enroll in or change an ACA plan due to a qualifying life event — such as losing job-based coverage, getting married, having a baby, or moving.
Subsidy (Premium Tax Credit)
A government payment that reduces your monthly ACA premium. Based on your income and household size. You can apply it directly to your monthly premium or claim it when you file taxes.