We know there are a lot of insurance terms, so we've compiled this list to help you get a better understanding of all these complexities.
COBRA: Consolidated Omnibus Budget Reconciliation Act (COBRA) is a law that gives workers and their families the right to continue their group health benefits provided by their employer’s plan for a certain period of time in the event that they lose health insurance coverage because they are separated from employment, or if there is a reduction of hours that causes them to lose coverage.
Coinsurance: The percentage of the cost of a service/fee you will be responsible for after the deductible (if any) is met.
Copay: The dollar amount you have to pay for a specific type of service or visit regardless of its cost before the deductible is met for all plans except HDHPs. Copays count toward the out-of-pocket maximum but not the deductible.
PCP: Primary care provider (e.g. family/general practitioner) you coordinate care through
Specialist: A provider in a specialized practice area (e.g. cardiologist, etc).
Cost-sharing: How cost is divided between the member and the insurance carrier for services/care. Examples of cost sharing are co-pays, coinsurance, and deductibles.
Deductible: The amount a member must pay out-of-pocket for covered health services before the carrier begins to pay.
Deductible rollover: Most health plans have annual deductibles. Some plans permit participants to apply the money that they spend towards the deductible in the fourth quarter to the following year’s annual deductible.
Embedded deductible: Having an embedded deductible means that no individual is responsible for meeting more than their individual deductible, even if they are on a family plan. All plans that customers have access to have an embedded deductible (with exception of U8 which has deductibles that are non-embedded). This means all members are subject to the individual deductible).
Non-embedded deductible: Having this means the total family deductible would need to be met before the plan starts paying for the health care services incurred by any individual family member.
POS plan: Point of Service; provides in- and out-of-network coverage. Traditionally speaking, POS plans are “gated,” meaning a member must choose a primary care provider (PCP) who is the “point of service.” All Aetna POS plans accessed through Justworks are “open access,” meaning participants do not need a referral from a PCP to see a specialist.
EPO plan: Exclusive Provider Organization; provides in-network coverage only without pre-authorization (except in life or death emergencies). EPO plans do not require members to elect primary care physicians or require referrals in order to see specialists.
High-Deductible Health Plan: High Deductible Health Plan; a plan that meets the criteria of an HDHP as defined by the IRS.
For 2023, the plan must have a deductible of no less than $1,500 for employee-only coverage and $3,000 for family coverage.
For 2023, annual out of pocket expenses cannot exceed $7,500 for employee-only coverage and $15,000 for family coverage.
HMO plan: Health Maintenance Organization; regional networks with a limited number of providers and the plans always require a referral to see a specialist.
Out-of-pocket Maximum/Payment Limit: the most a member would have to pay for qualifying services in a calendar year. The carrier covers 100% of the cost for qualifying claims after this is exceeded.
Preventative care: services that are required to be covered at 100% and the deductible is waived for the services (e.g. wellness visits, women’s health visits, etc.).
PPO: Preferred Provider Organization is a healthcare organization that has agreed to provide health care through a network. Care may also be provided by out of network providers but higher fees may apply.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.