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Glossary of terms

Quick guide for health insurance terms and acronyms

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Affordable Care Act (ACA): The healthcare reform law enacted in 2010. This term is short for PPACA, or the Patient Protection and Affordable Care Act, and is sometimes referred to as “Obamacare.”


Adjudication: Processing a healthcare claim through a series of edits to determine proper payment.


Allowed amount: Maximum amount on which payment is based for covered health care services. This may be called “eligible expense,” “payment allowance," or "negotiated rate." If your provider charges more than the allowed amount, you may have to pay the difference. (Alsosee Balance Billing and ACA Uniform Glossary


Alternative care: Nontraditional care delivered by providers such as midwives, acupuncturists, naturopaths, massage therapists, and chiropractors.


AMA: American Medical Association


Ambulatory care: Often called “outpatient care,” this is care without being admitted to a hospital. Health services rendered in a physician’s office, a clinic, a hospital’s outpatient facility, or home setting are all examples of ambulatory care.


Ancillary medical services: Covered services that supplement the care furnished by providers. Examples of ancillary services include ambulance service, durable medical equipment, imaging services such as x-rays, laboratory services, prescription drugs, and physical or occupational therapy.


Appeal: A request for your health insurer or plan to review a decision or a grievance again. See ACA Uniform Glossary


ARRA: The American Recovery and Reinvestment Act is also referred to as an economic stimulus bill. On February 17, 2009, President Obama signed the Act, which includes several provisions related to healthcare. In part, the Act creates new opportunities for individuals to qualify for continuation coverage provided by a group health plan. The Act also provides for a subsidy for that continuation coverage for some individuals and their family members.


Balance billing: When a provider bills you for the difference between the provider’s charge and the allowed amount. For example, if the provider’s charge is $100 and the allowed amount is $70, the provider may bill you for the remaining $30. A preferred provider may not balance bill you for covered services. See ACA Uniform Glossary


Behavioral healthcare: Treatment of mental health, chemical dependency, and substance abuse disorders.


Benefit year: The annual cycle in which a health insurance plan operates. Some benefit years follow the calendar year, renewing in January, whereas others may renew in late summer or fall. Deductibles and other benefit year limits typically reset at the beginning of each new benefit year.


Board certified: A physician who has passed an examination given by a medical specialty board.



Carrier: Another name for the insurer, insurance company, or underwriter of risk.


Carryover (Health FSA, HRA, and TFB): Carryover is the ability to carry an unused balance from one plan year to the next. Employers can establish custom rules around carryover, such as the maximum rollover, or if a member must enroll in the new plan year to allow carryover from the previous year.

Carryover is an optional plan provision that can be offered by an employer on health flexible spending accounts, health reimbursement arrangements, or transportation benefit accounts.

The IRS rules related to carryover are different for each plan type:

  • Health FSA – Employer can allow unused balance (up to IRS max) to be carried into the new plan year
  • HRA – Employer can choose any flat-rate limit or 100%
  • TFB – Employer can choose either $0 or 100%


Case management: Case management is typically used for members who have a catastrophic illness or injury or are receiving long-term or specialized care. Case managers help members navigate their plan’s benefits, get the services they need, and help to provide continuity of care and transition planning.


Certificate of creditable coverage (COC): A document that provides proof of a person’s insurance coverage. Under HIPAA laws, health insurers must issue this certificate to individuals when their coverage ends under an employer-provided group health plan, or under certain individual policies.


Chemical dependency services: Services (inpatient or outpatient) related to the treatment of addiction and/or substance abuse disorders.


Claim: A bill submitted by a provider (or a member) to an insurance company to establish that medical services were provided.


Clinic: Healthcare facility that provides preventive, diagnostic, and treatment services to patients in an outpatient setting.


COBRA: Acronym for Consolidated Omnibus Budget Reconciliation Act, a federal law that requires employers to offer continued health insurance coverage to employees whose health and dental insurance coverage terminates. COBRA applies only to groups of 20 or more employees; groups with fewer than 20 employees are subject to state continuation laws.


COB: See coordination of benefits.


COC: See certificate of creditable coverage.


Coinsurance: Coinsurance is how much you owe for a covered healthcare service or prescription, calculated as a percentage of the allowed service amount. View our video, "What is co-insurance?" <link>


Complaint: An expression of dissatisfaction about a specific problem encountered by a member, or about a decision by the insurer (or agent acting on behalf of the insurer). A complaint must include a request for action to resolve the problem or change the decision.


Complications of pregnancy: Conditions due to pregnancy, labor and delivery that require medical care to prevent serious harm to the health of the mother or the fetus. Morning sickness and a nonemergency caesarean section aren’t complications of pregnancy. See ACA Uniform Glossary


Coordination of benefits (COB): When people have more than one health insurance policy, this coordination indicates which insurance plan will pay the claim, or pay the claim first. There are different types of COB provisions. Some types of COB mean that both plans contribute to paying covered expenses and there may be little or no out-of-pocket cost to the member. Other COB provisions only compare the benefits of the two plans and ensure that the benefit is paid at the better of the two possible benefits. When benefits are coordinated, one plan pays benefits first (the “primary coverage”) and the other pays based on the remaining balance (the “secondary coverage”).


Copayment (or co-payment): A fixed amount ($35, for example) you pay for a covered healthcare service, usually when you receive the service. The amount can vary by the type of covered health care service. View our video, "What is copay?" <link> See ACA Uniform Glossary


Cost sharing: When a member is responsible for paying a portion of the cost of care via deductibles, copayments, or coinsurance.


Coverage: Services or benefits provided through a health insurance plan.


CPT: Current procedural terminology are codes used by healthcare professions to identify the medical services provided to a member. CPT codes are usually listed on a member’s explanation of benefits (EOB) statement.


DAW: Dispense as written. These are instructions a doctor writes on a prescription to indicate to a pharmacist that generic or other drugs should not be substituted for the specific (usually brandname) drug that the doctor has prescribed. (Please note, your health plan may only cover generic or preferred brand-name drugs, even if your doctor has indicated DAW on your prescription. Check your plan’s benefits and discuss this with your doctor. Together, you may be able to find a drug that meets your needs and will be covered by your plan.)


Date of service: The date on which a person received a healthcare service.


Deductible: The dollar amount you pay out-of-pocket for covered services before your health insurance plan begins to pay for your care. View our video, “What is a deductible?” <link>

See ACA Uniform Glossary


Dependents: Family members of the subscriber who are eligible for coverage on the subscriber’s plan. 


Diagnosis: The identification of a disease or condition through examination.


DME: See durable medical equipment.


Durable medical equipment (DME): Any healthcare equipment or supplies ordered by a doctor or medical facility.


EFT: See electronic funds transfer.


Effective date: The date on which health insurance becomes effective. 


Electronic funds transfer (EFT): The ability to make electronic payments directly to a bank account. For example, individuals may choose to pay their monthly premiums via EFT instead of mailing a check. Insurance carriers may choose to pay providers via EFT.


Eligibility requirements: The age, service, and other requirements specified by a plan document or employer as pre-conditions to enrolling in a health plan.


Emergency: A medical emergency is any situation where you risk losing your life or a limb if you don’t get immediate medical care. See ACA Uniform Glossary


Enrollee: More often referred to as a member, this is a person or dependent who’s getting coverage on a health plan. 


Enrollment: Process by which an individual becomes covered under a health or dental plan.


ER: Abbreviation for emergency room.


Essential health benefits (EHB): A set of health care service categories that must be covered by certain plans, starting in 2014 as part of the Affordable Care Act. EHB’s include hospitalization, maternity care, emergency care, preventive care and other services. See for more information.


Evidence of coverage: See certificate of creditable coverage (COC).


Exchange: An online marketplace where individuals and small employers can purchase health insurance. Buying health insurance in an exchange is optional; however, most federal assistance to help individuals and families pay for health insurance through an exchange.


Excluded services: Healthcare services that your health plan doesn’t pay for or cover. See ACA Uniform Glossary


Experimental procedures: Services, supplies, treatments, or drug therapies that the health plan has determined are not generally accepted as proven and effective in treating the illness for which their use is proposed. Also called “investigational” or “unproven” procedures.


Explanation of benefits (EOB): Every time you use your health insurance benefits, your insurance company will send you a statement that shows the service you had (like an office visit) and how they applied your benefits to it. This statement is called an Explanation of Benefits. If you need help reading or understanding your PacificSource EOB, please view our "What is an EOB?" video or see our “About your EOB” page. <two links>


Extended care facility: A nursing home type of setting that offers skilled, intermediate, or custodial care.


Flexible spending account (FSA): An employee benefit offered by many companies that allows employees to have pretax dollars withheld from their salaries to pay for unreimbursed medical expenses and dependent-care expenses, such as babysitting or eldercare.


Formulary: Health insurers generally maintain a list, called a formulary, of “preferred” generic and name brand medications. The medications listed on the formulary are usually covered at a higher level than those medications not listed. (The medications not included on the formulary are often referred to as the “non-preferred” brands.) A formulary can also be called a drug list.


FSA: See flexible spending account.   


FSA grace period: An optional plan provision that can be offered by an employer on flexible spending accounts (Health FSA, Dependent Care, and Supplemental Premiums). It is a 2.5-month extension of time to incur services after a plan ends. The 90-day runout for submitting claims begins at the end of the grace period.


Generic drug: A prescription drug that has the same active ingredients as a brand-name drug. Generic drugs usually cost less than brand-name drugs. The Food and Drug Administration (FDA) rates these drugs as safe and effective as brand-name drugs.


Global: All-inclusive. For example, a bill for “global surgery” includes the surgery plus all pre-op and post-op care, or a “global billing” may include all charges for a series of treatments.


Grievance: A complaint that you communicate to your health insurer or plan. See ACA Uniform Glossary


Habilitation services: Healthcare services that help a person keep, learn or improve skills and functioning for daily living. Examples include therapy for a child who isn’t walking or talking at the expected age. These services may include physical and occupational therapy, speech-language pathology, and other services for people with disabilities in a variety of inpatient and/or outpatient settings. See ACA Uniform Glossary


Health Insurance Portability and Accountability Act (HIPAA): Federal legislation designed to improve the portability of health coverage, reduce healthcare costs by standardizing the processing of healthcare transactions, increase the security and privacy of healthcare information, and to make other changes to the healthcare delivery system.


Health reimbursement arrangement (HRA): An IRS-approved, tax-favored benefit that reimburses employees, up to a maximum dollar amount, for qualified medical care expenses not reimbursed by an employer's health plan. HRAs are paid for solely by the employer. Any unused portion of the maximum dollar amount at the end of a coverage period may be carried forward to increase the maximum reimbursement amount in subsequent coverage periods.


Health savings account (HSA): A tax-sheltered savings account that may be used by beneficiaries covered by qualified high-deductible health plans to pay for healthcare expenses not covered by their health plan. Money remaining in the account at the end of the year may be usedin the following year. Contributions to an individual’s HSA can be made by anyone, including the employer, up to an annual maximum.


Home healthcare: Healthcare treatment or services that are received at home. See ACA Uniform Glossary


Hospice services: Services to provide comfort and support for persons in the last stages of a terminal illness and their families. See ACA Uniform Glossary


Hospitalization: Care in a hospital that requires admission as an inpatient and usually requires an overnight stay. An overnight stay for observation could be outpatient care. See ACA Uniform Glossary


Hospital outpatient care: Care in a hospital that usually doesn’t require an overnight stay. See ACA Uniform Glossary


HRA: See health reimbursement arrangement.


HSA: See health savings account.


ICD or ICD-9-CM: International Classification of Diseases, 9th Edition (Clinical Modification); book of narrative/numeric codes used by healthcare providers to classify medical diagnoses.


Individual insurance market: The market for health insurance coverage offered to individuals who do not have access to a group health plan, for example, through their employer. In some states, a group or employer health plan that has fewer than two participants may also be considered part of the individual insurance market.


In-network coinsurance: The percent (for example, 20%) you pay of the allowed amount for covered health care services to providers who contract with your health insurance or plan. In-network coinsurance usually costs you less than out-of-network coinsurance. See ACA Uniform Glossary


In-network copayment: A fixed amount (for example, $15) you pay for covered health care services to providers who contract with your health insurance or plan. In-network copayments usually are less than out-of-network copayments. See ACA Uniform Glossary


Inpatient care: Care provided in a licensed bed in a hospital, nursing home, or other medical or psychiatric institution, usually for at least 24 hours.


Lifetime limit or lifetime maximum: A limit or “cap” on the total amount of benefits that may be paid for a specific service. For example, your plan might have limits on the dollar amounts of benefits it will provide (such as a plan that will pay no more than $300 for foot orthotics over the lifetime of your plan). Or, your plan may have limits on the number of times it will pay for a certain service (for example, the plan may only pay for one liver transplant per lifetime).


Medically necessary: Healthcare services or supplies needed to prevent, diagnose or treat an illness, injury, condition, disease or its symptoms and that meet accepted standards of medicine.See ACA Uniform Glossary


Medicare: The federal health insurance program for older U.S. citizens and the disabled.


Member: Often used in place of “the enrolled” or “the insured” person, the member is anyone covered by the health plan, whether they are the subscriber or a dependent on their policy.


Mental health and chemical dependency parity: Oregon’s mental health parity law, which became effective January 1, 2007. It requires group health insurance policies to cover treatment of chemical dependency and mental or nervous conditions at the same level and with no more restrictions than those imposed for other medical conditions.


MRI: Magnetic resonance imaging—a radiology technology to form pictures of the anatomy and the physiological processes of the body.


Network: The facilities, providers, and suppliers your health insurer or plan has contracted with to provide healthcare services. See ACA Uniform Glossary


Noncovered services: Those services excluded from coverage by your health plan.


Nonemergent condition: Non-life-threatening emergency, a situation treated by routine examinations, diagnostic work-ups for chronic conditions, routine prenatal care, elective surgery, and scheduled follow up visits for prior emergency conditions. Receiving nonemergent care in an emergency room setting is usually not covered by health plans.


Nonformulary covered prescriptions: Drugs that are not specifically listed on an insurer’s formulary are considered nonformulary drugs and typically have a higher cost for the member. (Occasionally an insurer make may a list of prescription drugs that are nonformulary, to make it easier for members to compare.)


Nonpreferred/Nonparticipating provider: A provider who doesn’t have a contract with your health insurer or plan to provide services to you. You’ll pay more to see a nonpreferred provider. Check your policy to see if you can go to all providers who have contracted with your health insurance or plan, or if your health insurance or plan has a “tiered” network and you must pay extra to see some providers. See ACA Uniform Glossary


Nurse practitioner: A registered nurse who has advanced skills in the assessment of physical and psychosocial health status of individuals, families, and groups.


Open enrollment: An annual period, usually occurring shortly before the beginning of a new plan year, during which eligible people can enroll for health insurance benefits and/or change their elections from the previous year. Unless you have a qualifying special event, this is typically the only time of year that you can enroll in a health insurance plan.


OTC: See over-the-counter drug or medicine.


Out-of-area: That area that is outside where the insurance company is making its coverage available for purchase.


Out-of-network coinsurance: The percent (for example, 40%) you pay of the allowed amount for covered healthcare services to providers who do not contract with your health insurance or plan. Out-of-network coinsurance usually costs you more than in-network coinsurance. See ACA Uniform Glossary


Out-of-network copayment: A fixed amount (for example, $30) you pay for covered healthcare services from providers who don’t contract with your health insurance plan. Out-of-network copayments usually are more than in-network copayments. See ACA Uniform Glossary


Out-of-panel provider: Usually called a “nonparticipating” or “non-network” provider, this is a provider who is not a part of the panel of doctors and other providers selected for your healthplan’s provider network.


Out-of-pocket limit (OOP): Your out-of-pocket limit (or out-of-pocket max) is the most you could pay for covered care in a calendar year aside from your monthly premium. See ACA Uniform Glossary


Outpatient: A person who visits a clinic, emergency room, or health facility and receives healthcare without being admitted as an overnight patient.


Outpatient care: Care that does not require an overnight stay in a bed in a licensed hospital, nursing home, or other facility.


Over-the-counter (OTC) drug or medicine: A drug or medicine that is sold lawfully without a prescription.


Participating provider panel: A listing of the providers and facilities that have contracted with your health insurer to provide services at a discount to members.


PBM: Abbreviation for pharmacy benefit manager.


PCP: See primary care provider.


PDL: See preferred drug list.


PHI: See protected health information.


Physician: A person who is licensed and qualified to practice medicine in the state where theirpractice is located.


Physician services: Services performed, facilitated, or provided by a licensed medical doctor. See ACA Uniform Glossary


Plan: The structure of an insurance benefit that helps you pay for your healthcare services. See ACA Uniform Glossary


Plan administration: Management of a health plan, including accounting, billing, personnel, marketing, and legal services.


Plan year: The 12-month period on which a plan operates. Note: The plan year may or may not be the same as the benefit year. Your policy or plan description/handbook should indicate which month is the start of each plan year.


Point of service (POS): Type of health plan in which you may pay less (or have a higher level of benefits) if you use doctors, hospitals, and other healthcare providers that belong to a plan’s network.


Policyholder: The employer or individual to whom the health insurance contract is issued and in whose name the policy is written. In a plan contracting directly with an individual or family, the policyholder is the individual to whom the contract is issued.


Portability: Access to continuous health coverage so that the insured does not lose insurance coverage due to any change in health or personal status (such as employment, marriage, or divorce).


POS: See point of service.


PPACA: Patient Protection and Affordable Care Act, federal legislation enacted in 2010. This is also referred to as ACA or Obamacare.


Preauthorization: This is an approval given in advance by an insurance company to a doctor for certain types of care. See ACA Uniform Glossary


Pre-existing condition: Physical or mental condition of an insured person that existed before enrollment in a health plan. Pre-existing conditions may result in a limitation of coverage or benefits. Pregnancy is not considered a pre-existing condition.


Preferred drug list (PDL): A list of brand name prescription medicines that is more limited than a standard drug formulary. Drugs on the list are selected based on clinical results and economic value.


Preferred provider: A provider who has a contract with your health plan to provide services to you at a reduced rate. See ACA Uniform Glossary


Premium: The fixed monthly fee you pay your insurer to keep your health insurance plan. See ACA Uniform Glossary


Prescription drug coverage: Health insurance or plan that helps pay for prescription drugs and medications. See ACA Uniform Glossary


Prescription drugs: Drugs and medications that require a prescription. See ACA Uniform Glossary


Preventive care: Healthcare focused on preventive measures such as routine physical exams, check-ups, immunizations, etc., and not a specific medical complaint. This type of care is also sometimes referred to as “routine,” “screening,” or “pre-care.”


Primary care: This is routine medical care, normally provided in a doctor’s office. Services may be administered by an internist, family practitioner, obstetrician-gynecologist, pediatrician, or nurse practitioner.


Primary care physician (PCP): A physician who directly provides or coordinates a range of healthcare services for a patient. See ACA Uniform Glossary


Primary care provider (PCP): This may include a primary care physician, but its definition also includes a nurse practitioner, clinical nurse specialist or physician assistant, who provides,coordinates or helps a patient access a range of health care services. For more, view our video, "What is a PCP, and why do I need one?" <link> Also see ACA Uniform Glossary


Provider: A person licensed, certified, or otherwise authorized to administer healthcare services. Examples of providers include physicians, dentists, nurses, pharmacists, and other healthcare facilities or entities.


Qualifying event: Usually you cannot make changes to your health insurance enrollment except during an annual open enrollment period. However, there are special life events, called qualifying events, that may allow you to change your coverage, drop your coverage, or enroll in coverage, even if it's not open enrollment time. There are qualifying events for COBRA and qualifying events for a special enrollment period.


Referral: A process by which a member’s primary care practitioner (PCP) directs them to other providers, usually specialists, for further care. Some health plans require you to get a formal referral from your PCP before you see a specialist or other type of provider. (Please note, a doctor suggesting the names of other providers is not the same thing as a formal (usually written) referral.)


Referral authorization: The processes an insurance company uses for reviewing and authorizing referrals to specialist physicians or other types of providers by primary care practitioners.


Rehabilitation services: Services designed to help you maintain, regain, or improve everyday skills affected by an illness or injury. See ACA Uniform Glossary


Rider: A rider is an amendment to an insurance policy. Some riders will add coverage (such as adding a dental rider to a medical policy), while some riders exclude coverage for a certain service or condition.


Runout period (FSA, HRA, and TFB): At the end of every plan year, a member has a 3-month period to submit any outstanding claims. This is commonly referred to as a 90-day runout. This applies to flexible spending accounts, health reimbursement arrangements, and transportation benefit plans.


SBC: See Summary of Benefits and Coverage


Service area: The geographic area in which a health insurance plan’s benefits are available. Some health insurance plans will not provide coverage outside of the plan’s service area. 


Skilled nursing care: Services or care from nurses, therapists, or technicians in your home or in a nursing home. See ACA Uniform Glossary

Skilled nursing facility (SNF): A facility, either freestanding or part of a hospital, that accepts patients in need of rehabilitation and/or medical care that is of a lesser intensity than that received in a hospital.


SNF: See skilled nursing facility.


Special enrollment: A time outside of the open enrollment period during which you and your family have a right to sign up for health insurance if you experienced certain life events that involve a change in family status (for example, marriage, or birth of a child) or loss of other health coverage.  


Specialist: A physician specialist focuses on a specific area of medicine or a group of patients to diagnose, manage, prevent, or treat certain types of symptoms and conditions. A non-physician specialist is a provider who has more training in a specific area of healthcare. See ACA Uniform Glossary


Subrogation: When healthcare costs of enrollees are the responsibility of an entity other than the insurer, such as workers’ compensation, automobile  coverage, or a third party.


Subscriber: The person responsible for payment of premiums to the insurance company, or whose employment or other status, except for family dependency, makes them eligible for enrollment in a health plan.


Summary of Benefits and Coverage (SBC): A summary of the costs and coverage of a health plan. The SBC must be used by all insurance companies to make it easier for people to compare plans based on price, benefits, or other features.


Tertiary care: Healthcare services which are not available through a community hospital setting. This may include complex cancer procedures, transplants, and neonatal intensive care.


Third-party liability: The circumstance under which a company other than the insurer is responsible for paying a member's claim.


Triggering event: An event or age milestone, which can change the terms of an insurance contract. In the context of COBRA, there are seven qualifying triggering events for COBRA coverage.  


Usual, customary, and reasonable (UCR): The amount paid for a medical service in a geographic area based on what providers in the area usually charge for the same or similar medical service. The UCR amount sometimes is used to determine the allowed amount. See ACA Uniform Glossary


Urgent care: Care for an illness, injury or condition serious enough that a reasonable person would seek care right away, but not so severe as to require emergency room care. See ACA Uniform Glossary


Utilization review: A formal process used by an insurer, or delegated by the insurer, to monitor a patient’s use of healthcare services and evaluate the medical necessity, appropriateness, efficacy, or efficiency of those services, procedures, or settings.



Vision Coverage: Vision coverage is a health benefit that pays for one or more aspects of vision care, such as eye exams and glasses.


Waiting Period: The period before an employee or dependent is eligible to enroll under the terms of a group health plan.


Well-baby and Well-child Visits: Routine doctor visits for comprehensive preventive health services that occur when a baby is young, and annual visits until a child reaches age 21. Services include physical exams and measurements, vision and hearing screening, and oral health risk assessments.


Well-woman care: Routine preventive care services provided to adult women, which may include pap smears, mammograms and other services.


Wellness program: A program of health promotion and disease prevention.


WHCRA or Women’s Health and Cancer Rights Act: A federal law that requires group health plans that provide mastectomy benefits to provide coverage for reconstructive surgery and certain other related benefits.