Employee benefits chap 5

exclusive provider organization

A variation of preferred provider organizations (PPOs). This type of managed care plan does not offer reimbursement for services provided outside the established network of health care providers.

premium

Amount of money an individual or company pays to maintain insurance coverage

health-care plans

Cover the costs of services that promote sound physical and mental health, including physical examinations, diagnostic testing, surgery, hospitalization, psychotherapy, dental treatments and corrective prescription lenses for vision deficiencies.

single coverage

Extends health insurance benefits only to the covered employee.

copayment

Nominal payments individuals make for office visits to their doctors or for prescription drugs.

family coverage

Offers health insurance benefits to the covered employee and his or her family members as defined by the plan (usually, spouse and children).

prepaid plan

Pays health-care providers a fixed amount according to the number of individuals covered by the plan.

single-payer system

Refers to a health care system in which the government regulates the health care and uses taxpayer dollars to fund health care such as in Canada and some other economically developed countries. Often referred to as universal health care systems because the government ensures that all its citizens have access to quality health care regardless of ability to pay.

self-funded plan

Under this type of health-care plan, the employer determines what benefits to offer, pays medical claims for employees and their families, and assumes all of the risk.

Patient Protection and Affordable Care Act

A comprehensive law that mandates health insurance coverage and sets minimum standards for insurance. Contains two mandates: individual mandate and employer mandate.

coinsurance

A feature of health insurance programs that refers to the percentage of covered expenses or a fixed dollar amount paid by the insured.

National Association of Insurance Commissioners

A nonprofit organization that addresses issues concerning the supervision of insurance within each state. Specifically, the NAIC has three main objectives: maintaining and improving state regulation, ensuring the reliability of insurance companies in matters of financial condition, and promoting fair, just, and equitable treatment of policyholders and claimants.

essential benefit

A requirement of the Patient Protection and Affordable Care Act of 2010, include items and services within 10 categories, for example, ambulatory patient services, emergency services, and hospitalization.

experience rating

A system that establishes higher contributions (to fund insurance programs) for employers with higher incidences of claims (i.e., more people using the insurance).

preferred provider organization

A type of managed care plan that refers to a select group of health care providers who agree to furnish health care services to a given population (for example, Company B's employees) at a higher level of reimbursement than under fee-for-service plans.

Cadillac Tax

Based on a provision of the Patient Protection and Affordable Care Act (PPACA), a tax that is - implementation time to be determined (TBD) - collected from employers that offer high-cost employer-sponsored health plans

Fully insured plan

Based on contractual relationship with one or more insurance companies to provide health-related services for employees and their qualified dependents.

point-of-service plan

Combine features of fee-for-service systems and health maintenance organizations (HMOs). This type of managed care plan is almost identical to PPOs except, like HMOs, it requires the selection of a primary care physician.

insurance policy

Contractual relationship between an insurance company and beneficiary that specifies the obligations of both parties. For example, a health insurance company specifies that it will cover the cost of physical examinations, and a life insurance company agrees to pay a spouse an amount equal to double of his deceased wife's annual salary.

inpatient benefits

Covered expenses associated with hospital stays.

outpatient benefits

Covered expenses for treatments in hospitals not requiring overnight stays.

underwriting

Decision process insurance companies rely upon to decide whether to offer insurance.

usual, customary, and reasonable charges

Defined as not more than the physician's usual charge, within the customary range of fees charged in the locality, and reasonable, based on the medical circumstances.

primary care physician

Designated by HMOs to determine whether patients require the care of a medical specialist. This functions to control costs by reducing the number of medically unnecessary visits to expensive specialists.

managed care plan

Emphasize cost control by limiting an employee's choice of doctors and hospitals. They also provide protection against health care expenses in the form of prepayment to health care providers.

morbidity table

Express annual probabilities of the occurrence of health problems. In general, insurance companies set insurance rates higher as the probability of death or the occurrence of health problems increases.

group coverage

Extends health insurance coverage to a group of employees and their dependents under a single master contract.

individual coverage

Extends insurance protection to a named employee and possibly to his or her dependents including children and spouse.

mortality tables

Indicate yearly probabilities of death based on factors such as age and sex established by the Society of Actuaries. Insurance companies rely on these tables in the underwriting process.

grandfathered plan

Individual and group health plans already in existence prior to the enactment of the Patient Protection and Affordable Care Act of 2010 (PPACA).

Non-grandfathered plan

New health plans (or preexisting plans that have been substantially modified after March 23, 2010) are referred to as

Health Maintenance Organization Act

Promoted company use of health maintenance organizations (HMOs) by providing HMOs with financial incentives subject to becoming federally qualified.

fee-for-service plan

Provide protection against health care expenses in the form of cash benefits paid to the insured or directly to the health care provider after receiving health care services. These plans pay benefits on a reimbursement basis.

multiple-payer system

Refers to a system in which there is more than one party responsible for covering the cost of health care, including the government, employers, labor unions, employees, or individuals not currently employed (e.g., retirees, the unemployed, and employees whose employer does not pay for health care coverage).

out-of-pocket maximum

Refers to the maximum amount a policyholder must pay per calendar year or plan year. Includes the deductible, copayments, and coinsurance.

employer mandate

Requires that companies with at least 50 full-time equivalent employees are required to offer affordable health insurance to its full-time employees or face possible penalties.

individual mandate

Requires that individuals who can afford to purchase health insurance must do so either by participating in an employer-sponsored plan or by purchasing health insurance coverage independently.

deductible

The amount an individual pays for services before insurance benefits become active.

hospitalization benefits

The items that an insurance company will provide coverage for, related to stays in the hospital such as the cost of the room and necessary medical supplies.

indemnity plan

Traditional health insurance plans in which the insurance company agrees to pay a designated percentage of the costs for health insurance procedures and the insured (i.e., recipient of the insurance benefit) agrees to pay a designated percentage.