What Does it Mean?
Administrative Services Only (ASO):
An arrangement in which an employer hires a third party to deliver employee benefit administrative services to the employer. These services typically include health claims processing and billing. The employer bears the risk for health care expenses under an ASO plan.
Explanation of Benefits (EOB):
(Click Here for a Sample .pdf)
Statement sent by health plans to persons who have experienced a claim under the health plan. The explanation of benefits (EOB) details the charges for the services received, the amount the health insurance company will pay for those services, and the amount the insured person will be responsible for paying.
The EOB is extremely important to the policy holder…even if the individual plan they own has a high deductible (purchased to get a lower premium) they still get the benefit of the insurance company’s negotiated prices. Example ( an MRI which may cost $2500 without insurance may only cost $1700 with insurance…you insurance company has already negotiated the rates down with the provider therefore you are only responsible for the negotiated rate. So if you have a $5000 deductible then you will pay the $1700) this $1700 when be used to offset your deductible.
Schedule of Benefits (SOB):
There are many plans in the market place that we consider SOB TRAP, schedule of benefit traps. These plans detail within the policy maximum amounts the plan will pay for almost every conceivable procedure or event. Often the max these plans will pay is $5000 to $7500. These are not what we call comprehensive major medical coverage. They will often leave you with large sums of money out of pocket after they have paid. Many of these plans offer little or no outpatient coverage.
Consolidated Omnibus Budget Reconciliation Act (COBRA):
The Consolidated Omnibus Budget Reconciliation Act of 1985, commonly known as COBRA, requires group health plans with 20 or more employees to offer continued health coverage for employees and their dependents for 18 months after the employee leaves the job. Longer durations of continuance are available under certain circumstances. If a former employee opts to continue coverage under COBRA, the former employee must pay the entire premium, plus a 2% administration charge. SEE COBRA TRAP!
Coordination of Benefits (COB):
A provision in the contract that applies when a person is covered under more than one health insurance plan. It requires that payment of benefits be coordinated by all plans to eliminate over-insurance or duplication of benefits.
Co-payment (Co-pay):
Co-payment is a predetermined fee, in addition to what health insurance covers, that an individual pays for health care services. For example, a PPO may require a $20 "co-payment" for normal services delivered during a physician office visit.
We offer plans that have co-pays for prescriptions, office visits, ER visits, Urgent care visits etc.
Current Procedural Terminology (CPT):
A system of terminology and coding developed by the American Medical Association (AMA) that is used for describing, coding, and reporting medical services and procedures
DRG (Diagnostic Related Group):
A Medicare-developed healthcare cost schedule in which medical service providers are assigned a uniform payment for specific services
Employee Assistance Programs (EAPs):
Mental health counseling services that are sometimes offered by insurance companies or employers. Typically, individuals or employers do not have to directly pay for services provided through an employee assistance program
Flexible Spending Account (FSA):
An employee benefits cash account from which non-taxable withdraws can be made to fund eligible expenses defined by the employer-sponsored plan. The FSA is funded by reductions in salary prior to calculation of federal income and social security taxes. Typically use it or lose it plans. You must spend the money you set aside by the end of the year, unlike HSA plans which rollover year to year.
HCFA Common Procedure Coding System (HCPCS):
Name given to CPT codes (Level I), alphanumeric codes (Level II), and local codes (Level III) used by payers and providers for billing purposes. Within the industry, most refer to Level II national codes as HCPCS codes.
Health Insurance Portability & Accountability Act (HIPAA):
A law passed in 1996, which is also called the "Kassebaum-Kennedy" law. This law expanded health care coverage for persons who have lost their job, or move from one job to another. HIPAA protects persons who have pre-existing medical conditions, and/or problems, based on past or present health, in getting health insurance coverage. This also requires certain major medical carriers to provide individual coverage to person without coverage during a open enrollment periods also without underwriting (in other words you can be sick) however these so called HIPAA plans are extremely expensive to point of being ineffective.
Health Maintenance Organization (HMO):
Prepaid health plans which cover doctors' visits, hospital stays, emergency care, surgery, preventive care, checkups, lab tests, X-rays, and therapy. In a HMO, one must choose a primary care physician who coordinates all care and makes referrals to any specialists that may be required. In a HMO, one must use the doctors, hospitals and clinics that participate in your plan's network. No benefits are paid for non-emergency benefits provided outside the HMO network. This as opposed to PPO plans where you can go to any physician or specialist as long as he or she is in the PPO network.
Health Reimbursement Arrangement (HRA):
A tax-advantaged employee health spending account funded and owned by the employer. Funds remaining in the account at year-end revert to the employer. For the employee, HRAs are a "use it or lose it" proposition.
Health Savings Account (HSA):
Operating similarly to IRAs, HSAs are tax-advantaged savings accounts for health care services. A person must enroll in a qualified High-Deductible Health Plan (HDHP) before they can establish an HAS. These plans are a great option for small business owners and self employed, by funding the HSA the owner positions him or herself to purchase even higher deductible plans in the future thus insuring that they are always purchasing the lowest possible premium. Self insuring is the only way to run the high cost of healthcare insurance!
High Deductible Health Plan (HDHP):
A person must be enrolled in a qualified High-Deductible Health Plan (HDHP) before they can establish a Health Savings Account (HSA). Not all high-deductible health plans qualify for purposes of establishing HSA eligibility. A qualified HDHP benefit design must conform to various federally-mandated requirements, such as a minimum $1000 deductible and a lack of first-dollar benefit provisions. We offer HSA plans with deductibles ranging from $1250 to $10,000.
Medical Savings Account (MSA):
A tax-advantaged personal savings account used in conjunction with a high deductible health policy. Individuals can contribute money to this account on a pre-tax basis to set aside money for qualified medical care and expenses, including annual deductibles and co-payments. For the most part these have been replaced by HSA plans.
National Association of Insurance Commissioners (NAIC):
A national organization of state officials charged with regulating insurance. NAIC was formed to promote national uniformity in insurance regulations.
National Committee for Quality Assurance (NCQA):
A national group responsible for devising and monitoring quality measurements and standards for health care entities
National Drug Code (NDC):
Numerical coding system for drug identification. NDC numbers are assigned by the Food and Drug Administration (FDA) and are typically used to bill payers for the drugs provided to health care beneficiaries
Preferred Provider Organization (PPO):
A network of health care providers with which a health insurer has negotiated contracts for its insured population to receive health services at discounted costs. Health care decisions generally remain with the patient as he or she selects providers and determines his or her own need for services. Patients have financial incentives to select providers within the PPO network. For individuals under 65 we only recommend PPO plans. The majorities of physicians are on most network plans or are on some network plan therefore it is ridiculous someone to purchase traditional any doctor any hospital plan. The cost for traditions plans are as much as 30% higher than PPO plans and do not have the deep cutting negotiated rates the PPO plans have.
Primary Care Physician (PCP):
Under a health maintenance organization (HMO) plan, the primary care physician is usually an insured person's first contact for health care. This is often a family physician, internist, or pediatrician. A primary care physician monitors patient health, treats most patient health problems, and refers patients, if necessary, to specialists.
Reasonable and Customary (R &C) Charge:
A term used to refer to the commonly charged or prevailing fees for health services within a geographic area. A fee is generally considered to be reasonable if it falls within the parameters of the average or commonly charged fee for the particular service within that specific community. "Reasonable and Customary (R&C) Charge" essentially means the same thing as "Usual and Customary (U&C) Charge."
Standard Industrial Classification (SIC):
Coding of businesses by their product or service. This classification is used in group insurance in determining rates for various industries.
Usual and Customary (U&C) Charge:
A term used to refer to the commonly charged or prevailing fees for health services within a geographic area. A fee is generally considered to be reasonable if it falls within the parameters of the average or commonly charged fee for the particular service within that specific community. "Usual and Customary (R&C)" essentially means the same thing as "Reasonable and Customary (R&C) Charge