HELPFUL DEFINITIONS
The following are a few definitions that may be helpful when reviewing your health plan choices. More definitions are located in the health plan provider’s certificate of coverage.
Allowed Amount/Charges—The highest amount covered (paid) for a service.
Annual Deductible—The amount you pay for your healthcare services before your health insurer pays. Deductibles are based on your benefit period (typically a calendar year).
Benefit Period—Defines the time period in which benefit maximums accumulate (i.e., deductibles and coinsurance maximums). It has a start and end date and is often a calendar year.
Coinsurance—A stated percent you must pay, for certain covered services only, of allowed charges related to a healthcare provider’s fee after you have paid your annual deductible.
Coinsurance Maximum—The maximum amount you will pay in coinsurance costs during a benefit period before the plan pays 100% (excludes amounts paid toward copayments and deductibles).
Copayment (Copay)—The amount you pay to a healthcare provider at the time you receive services. You may have to pay a copay for each covered visit to your doctor, depending on your plan.
Cost Sharing (Your Share of Costs)—Refers to your portion of medical and dental costs you pay during the benefit period in deductibles, copayments and coinsurances.
Covered Services—A medically necessary service or supply for which the benefit plan will reimburse expenses according to the plan’s limits.
Formulary Brand Name Prescription Drug—A listing of preferred prescription drugs provided by a medical plan that provides a discounted cost to participants. The tiered formulary provides financial incentives for participants to select lower-cost drugs.
Generic Prescription Drug—A prescription drug that is produced by more than one manufacturer. It is chemically the same as, and usually costs less than, the brand name prescription drug for which it is being substituted and will produce comparable effective clinical results.
In-Network Provider—A healthcare provider who is part of the plan’s network.
Inpatient Services—Services received when admitted to a hospital and a room and board charge is made.
Maintenance Medications—Prescription drugs prescribed for chronic, long-term conditions that are taken on a regular, recurring basis. Examples of chronic conditions that may require maintenance drugs are: high blood pressure, high cholesterol and diabetes.
Maximum Out-Of-Pocket Limit (MOOP)—The most you pay out of your pocket during a calendar year before your health plan starts to pay 100% for covered essential health benefits. This limit was established from the Affordable Care Act and includes deductibles, coinsurance, copayments or similar charges and any other expenditure required of an individual that is a qualified medical expense.
Non-Maintenance Prescription Drugs—Medication prescribed for temporary and often short-term conditions, i.e. antibiotics or short-term pain medicines. Non-maintenance drugs are obtained through local in-network retail pharmacies.
Out-Of-Network Provider—A healthcare provider who is not part of the plan’s network. Costs associated with out-of-network providers may be higher or not covered by the plan.
Outpatient Services—Services that do not need an overnight stay in a hospital. These services are often provided in a doctor’s office, hospital or clinic.
Out-Of-Pocket Cost—The amount you pay for medical care expenses that aren’t reimbursed by insurance. Out-of-pocket costs include deductibles, coinsurance and copayments for covered services plus cost for services that are not covered. Each plan has a maximum out-of-pocket (MOOP) cost.
Preferred Provider Organization (PPO)—A type of health plan that provides participants with reduced costs when utilizing services within a network of health providers. This plan also provides covered services outside a network but may result in more out-of-pocket costs to participants.
Specialty Drugs—Specialty drugs are often used to treat rare, complex and chronic conditions. They typically require special handling, administration or monitoring, and they are typically higher cost.
Tier—Terminology used to identify the provider network used by a participant. Also used to specify a prescription drug copay level (ex. Tier 1 = generic medications).