Glossary of Terms for Members
The handling of all functions of a group benefit plan once it has been sold such as claims processing, customer service, employee communications, etc.
Agent of Record
The licensed agent (aka Broker) that you, the employer group, choose to administer your benefits plan.
ASO (Administrative Services Only)
A contract between an insurer or Third Party Administrator (TPS) to provide certain administrative services to a self-funded employer.
An authorized representative of the group who solicits insurance contracts and services on the group’s behalf even though he may be paid commissions by the insurance company.
Cafeteria Plan/Section 125
A flexible benefit plan, which generally complies with the requirements of IRC Section 125 and offers a choice of two or more benefits or a choice between cash and one more benefit.
To review and make a judgement on a claim based on eligibility, fee schedules, usual and customary fees and charges, and benefit coverage.
COBRA (Consolidated Omnibus Budget Reconciliation Act)
A federal mandate, COBRA requires you to offer benefits plans to those no longer in your employ for up to 18 months. The covered individual must pay all costs for the plan. Continuation may also be required for up to 36 months for dependents who lose coverage under the plan due to certain events. COBRA continuation applies to medical, dental, Flex, vision, prescription drug and all other health type coverage. It does not apply to disability of life coverage.
The activities undertaken by your TPA and associated carriers to keep your costs as low as possible. Activities can include pre-certification, case management, mandatory second opinions and benefit incentives and so on.
Employee Benefit Plan
A plan established or maintained by an employer or employee organization to provide employees with a certain benefit such as medical insurance.
The process of adding an employee to the plan, helping them with paperwork, and educating them on the nuances of the benefit plan.
A document signed by the employee as a notice of their desire to participate in the benefits of the plan. It may include health questions and questions relating to dependents who are being enrolled for coverage with the employee.
EOB (Explanation of Benefits)
A document that is sent to explain how the claim was adjudicated. It is not a bill. The EOB may or may not accompany a reimbursement check. It includes information on how to contact the carrier and also the claim appeal process. If a check is not issued, the EOB summarizes how the claim was adjudicated (i.e. to deductible, denied as duplicate, etc.).
Fee for Service
The cost of services rendered.
Any person who has discretion over plan assets, benefit levels, accounting and record keeping, investments or benefit/eligibility decisions. A fiduciary has a duty under federal law to operate the plan in a prudent (conservative) manner and in the exclusive interest of the persons covered under the plan.
FMLA (Family and Medical Leave Act) Federal Law
The FMLA, as it relates to benefit plans, requires an employer with 50 or more employees within a 75 mile radius to provide up to 12 weeks of unpaid leave per 12 months in certain situations, during which the employee must continue to be treated as an active employee under the benefit plan. In addition, upon return from FMLA leave all eligibility periods and exclusions will be waived unless such provisions would have applied had the person not gone on FMLA leave. The individual’s job is protected throughout.
Fully Insured Plan
A benefit plan which is purchased by the employer for fixed monthly premiums paid to the insurance company who bears the risk. The employer pays a set amount for each covered member each month, without regard to actual claims costs incurred.
Health Insurance Portability and Accountability Act
HMO (Health Maintenance Organization)
A form of insurance whereby, the HMO pays providers on a capitated (negotiated) rate regardless of the actual cost services provided.
ID Card (Identification Card)
A pocket size printed card issued to members covered under your plan.
An approach to controlling costs and thereby utilization, quality and cost of medical care using a variety of cost containment methods focused on members’ paying more for higher cost care options and less for less costly care options.
The Affordable Care Act (ACA) provides for “essential health benefits,” defined as health treatment and services benefits in sections 1302(a) and (b). The combined benefit requirements apply to all policies sold in Exchanges and in the small group and individual markets as of October 1, 2013. Mandated benefits may change as federal health care reform evolves.
Government-sponsored health benefits for individuals 65 and older and for certain individuals with disabilities. The rules specify whether the insurance plan or Medicare pay benefits first.
PDA (Pregnancy Discrimination Act)
PDA prohibits discrimination in employment based on pregnancy. As it relates to benefit plans, PDA requires that if medical benefits are offered to employees, those benefits will treat pregnancy in the same manner and subject to the same provisions as any other sickness.
A comprehensive and detailed description of all provisions of the plan. The plan document is generally written in technical language.
POS (Point of Service) Gatekeeper
A form of insurance which utilizes a primary care provider to control access to medical services but, as opposed to an HMO or PSO, provides an out of network benefit.
PPO (Preferred Provider Organization)
An organization which contracts with providers of medical services (physicians and hospitals) to render services at discounted or pre-set fees to members of the PPO, in exchange for prompt payments and increased patient volume. The PPO then sells access to its network of providers to insurance companies and self-funded plans.
PSO (Provider Service Organization)
An HMO which is owned and operated by the providers rather than an insurance company.
The continuing of services to a plan who has been with the TPA or insurer during the past year.
An arrangement under which some or all of the risk associated with a benefit plan is not covered by an insurance contract. The plan sponsor is responsible for that portion of the risk that is not insured.
Plans in which the employer and employees contribute, with contributions going to a trust fund to pay health care claims. In such a plan, a participant’s contribution obligation is set forth in a plan document or plan enrollment form, and is periodically deducted from the participant’s paycheck.
SPD (Summary Plan Description)
A comprehensive description of plan benefits, eligibility provisions and all limiting factors, which is written in a manner that will be easily understood by the average employee.
TPA (Third Party Administrator)
An outside company who provides professional services to the plan and employer such as collection of premiums, payment of claims, maintenance of eligibility records and other clerical services. A TPA operates on a service only basis and does not accept any risk under the plan.