Terms and Open Enrollment
Deductibles, premiums, network, claims, benefits — what do all these words mean? Health insurance practically seems to have a language of its own. To make it easier, you can check out our list of common terms and get quick definitions that help explain what they mean — in everyday language.
Affordable Care Act – A health insurance reform law aimed at expanding health insurance coverage for people living in the U.S.
Also known as: Patient Protection and Affordable Care Act, Obamacare, health care reform
Benefit – A service, drug or item that your health insurance plan covers. Benefits may include office visits, lab tests and procedures.
Claim – A request for a benefit (including reimbursement of a health care expense) made by you or your health care provider to your health insurer or plan for items or services you think are covered.
COBRA – A federal law that requires group health plans to give continued health insurance coverage to certain employees and their dependents whose group coverage has ended.
Also known as: Consolidated Omnibus Budget Reconciliation Act of 1985
Coinsurance – Your share of the costs of a covered health care service, calculated as a percentage (for example, 20%) of the allowed amount for the service.
You generally pay coinsurance plus any deductibles you owe. For example, if the health insurance or plan’s allowed amount for an office visit is $100 and you’ve met your deductible, your coinsurance payment of 20% would be $20. The health insurance or plan pays the rest of the allowed amount.
Coordination of Benefits (COB) – A process of figuring out which of two or more insurance policies has the main responsibility of processing or paying a claim and how much the other policies will contribute.
Copayment – A fixed amount (for example, $15) you pay for a covered health care service, usually when you receive the service. The amount can vary by the type of covered health care service.
Also known as:co-payment, copay, co-pay
Cost Sharing – The general term that refers to the share of costs for services covered by a plan or health insurance that you must pay out of your own pocket (sometimes called “out-of-pocket costs”).
Some examples of types of cost sharing include copayments, deductibles, and coinsurance. Other costs, including your premiums, penalties you may have to pay or the cost of care not covered by a plan or policy are usually not considered cost sharing.
Deductible – The amount you could owe during a coverage period (usually one year) for health care services your health insurance or plan covers before your health insurance or plan begins to pay.
For example, if your deductible is $1,000, your plan won’t pay anything until you’ve met your $1,000 deductible for covered health care services subject to the deductible. The deductible may not apply to all services.
Dependent – A child, disabled adult or spouse covered by your health plan. A person may need to be a certain age or meet other conditions to qualify as a dependent under your plan.
Effective Date – The date your insurance plan starts covering you.
Essential Health Benefits (EHB) – A set of 10 categories of services that most health insurance plans must cover under the ACA.
These include:
- Ambulatory (outpatient) care
- Emergency services (including emergency room care)
- Hospitalization
- Maternity and newborn care
- Mental health services and addiction treatment
- Prescription drugs
- Rehabilitation services
- Laboratory services
- Preventive care, wellness services, and chronic disease treatment
- Pediatric services (care for infants and children
Evidence of Coverage (EOC) – A document from your insurance company that describes what your health plan covers. It also may give information about your deductibles, copayments, and the kinds of services or products your plan does not cover.
Also known as: explanation of coverage, COC, certificate of coverage, certificate of insurance, schedule of benefits
Explanation of Benefits (EOB) – A list that you get after you’ve received a medical service, drug or item. This list tells you the full price of the service, drug or item that you received. It also tells you how much you may need to pay for it.
Formulary – A list of drugs your health insurance or plan covers. A formulary may include how much you pay for each drug. If the plan uses “tiers,” the formulary may list which drugs are in which tiers. For example, a formulary may include generic drug and brand name drug tiers.
Also known as: Prescription Drug List
Health Insurance Marketplace (Exchange) – A resource where individuals, families, and small businesses can learn about their health coverage options; compare health insurance plans based on costs, benefits, and other important features; choose a plan; and enroll in coverage.
The Marketplace also provides information on programs that help people with low to moderate income and resources pay for coverage. This includes ways to save on the monthly premiums and out-of-pocket costs of coverage available through the Marketplace, and information about other programs, including Medicaid and the Children’s Health Insurance Program (CHIP).
The Marketplace is accessible through websites, call centers, and in-person assistance. In some states, the Marketplace is run by the state. In others it is run by the federal government.
Health Maintenance Organization (HMO) – A network of physicians and other health care professionals that provides and coordinates an individual’s health care services.
Health Savings Account (HSA) – A bank account that lets people put money aside, tax-free, to save and pay for health care expenses.
The Internal Revenue Service (IRS) limits who can open and put money into an HSA.
High-deductible Health Plan (HDHP) – A type of health plan with higher deductibles and lower premiums than most other health plans.
This type of plan may also let you open an HSA.
Indemnity Health Plan – A type of health plan that doesn’t have a network of health care providers like other types of health plans. This type of plan reimburses the member or provider after each billed charge.
Also known as: fee-for-service plan
Medicaid – A federal health insurance program for low-income families and children, eligible pregnant women, people with disabilities, and other adults.
The federal government pays for part of Medicaid and sets guidelines for the program. States pay for part of Medicaid and have choices in how they design their program.
Medicaid varies by state and may have a different name in your state.
Medicare –
A federal health insurance program for people who are 65 or older, certain younger people with disabilities, and people with end-stage renal disease.
Eligible individuals can receive coverage for:
- Hospital services (Medicare Part A)
- Medical services (Medicare Part B)
- Prescription drugs (Medicare Part D)
Together, Medicare Parts A and B are known as Original Medicare.
Benefits can also be provided through a Medicare Advantage plan (Medicare Part C).
Network – The facilities, providers and suppliers your health insurer or plan has contracted with to provide health care services.
Open Enrollment Period – The time when you can choose to enroll in a health plan or re-enroll in a health plan you are already in.
You can usually do this without waiting periods or proof of insurance.
If you are eligible for Medicare, the open enrollment period is the time of year you can enroll or make changes to your Medicare coverage.
Also known as: annual enrollment period, annual election period
Out-of-Pocket Limit – The most you could pay during a coverage period (usually one year) for your share of the costs of covered services.
After you meet this limit, the plan will usually pay 100% of the allowed amount. This limit helps you plan for health care costs.
This limit never includes your premium, balance-billed charges or health care your health insurance or plan doesn’t cover.
Some health insurance or plans don’t count all of your copayments, deductibles, coinsurance payments, out-of-network payments or other expenses toward this limit.
Also known as: out-of-pocket maximum, out-of-pocket threshold
Pre-existing Condition – A health condition that exists before the date that new health coverage starts.
Under the ACA, health insurance companies can’t refuse to cover you or charge you more if you have a pre-existing condition.
Preferred provider Organization (PPO) – A network of medical doctors, hospitals, and other health care providers who work with a health insurance plan to give care at a lower cost.
Premium – The amount that must be paid for your health insurance or plan.
You and/or your employer usually pay it monthly, quarterly or yearly.
Premium Tax Credits – Financial help that lowers your taxes to help you and your family pay for private health insurance.
You can get this help if you get health insurance through the Marketplace and your income is below a certain level.
Advance payments of the tax credit can be used right away to lower your monthly premium costs.
Preventative Care – Routine health care, including screenings, checkups, and patient counseling to prevent or discover illness, disease, or other health problems.
Primary Care Provider (PCP) – A physician, including an M.D. (Medical Doctor) or D.O. (Doctor of Osteopathic Medicine), nurse practitioner, clinical nurse specialist or physician assistant, as allowed under state law and the terms of the plan who provides, coordinates or helps you access a range of health care services.
Qualifying Life Event – A major life change that allows you to make changes to your health plan.
Some major changes include marriage, turning 26, divorce, the birth of a child or the loss of a job.
Referral – A written order from your primary care provider for you to see a specialist or get certain health care services.
In many health maintenance organizations (HMOs), you may need to get a referral before you can get health care services from anyone except your primary care provider. If you don’t get a referral first, the plan or health insurance may not pay for the services.
Renewal – When a covered person chooses to continue coverage under his or her current health insurance plan.
Renewal usually occurs once a year. If you pay your premium, your health insurance company may accept that as your request to renew coverage.
Special Election Period –
A period of time where you can sign up for a health insurance plan outside of the normal time frame.
Most plans have a set time when you can join them. But you may need to change or join a plan at another time if you are in a special situation.
Your insurance plan decides what these special situations are. They may include marriage, turning 26, divorce, the birth of a child or the loss of a job. Check with your insurance to see what special situations they recognize.
Also known as: special circumstances, special enrollment period
Specialist – A physician specialist focusing 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 special training in a specific area of health care.
Summary of Benefits and Coverage (SBC) – A document that lists the plan’s benefits. It may make it easier to compare costs, benefits and coverage between different health plans.
Also known as: SBCS, benefits summary
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.
What is open enrollment?
An open enrollment period is a window of time that happens once a year — typically in the fall — when you can sign up for health insurance, adjust your current plan or cancel your plan. It’s usually limited to a few weeks. If you miss it, you may have to wait until the next open enrollment period to make any changes.
What types of insurance use open enrollment?
If you get health insurance through your job, through Medicare, or through the Affordable Care Act (ACA) marketplace, you will have an open enrollment period. For ACA plans, state-based markets may have open enrollment periods that differ from federal-based marketplaces, as well as special enrollment periods. Visit your state health insurance website to find state-based open enrollment and special enrollment period dates.
What do I need to know about job-based open enrollment periods?
If you get health insurance through your job, your employer sets the open enrollment period. It’s typically in the fall so that your benefits can start at the beginning of the calendar year.
Tips on making the most of open enrollment
Before you choose a plan, you may want to think about the following:
- How much did you spend on health care last year (what was your premium, your deductible and your out-of-pocket costs)?
- Did the amount you/your family spent line up with your health care needs?
- Is your doctor/clinic in network?
- Are your medications covered?
Can I make changes outside of the open enrollment period?
Typically, once you’ve made your benefit elections, you have to wait to make changes until the next open enrollment period. Not always, though. There are certain life events, called Qualifying Life Events, that let you make changes to your benefits outside of the open enrollment period.
What if I missed the deadline for open enrollment?
If you need coverage during a time when annual open enrollment isn’t available and you have not experienced a Qualifying Life Event, you can buy short term health insurance. Short term health insurance can fill health care needs for short amounts of time.
