Insurance Term Glossary
The following glossary is meant to provide individuals with commonly used words and phrases in the insurance industry. This list is not exhaustive, but is meant to give individuals a better understanding of basic insurance terms.
Benefit Duration
A benefit period duration is the length of time which the insured member is covered for specified benefits.
Broker
A broker, or an agent, is a licensed individual who helps individuals decide, apply, and enroll in coverage. They are licensed and regulated by state and federal laws and can make specific recommendations about which plan(s) to enroll in.
Coinsurance
Coinsurance is the share of the costs for a covered health care service, calculated as a percent of the allowable amount for the service after the deductible has been met.
Example: If the policy's allowed amount for an office visit is $100 and you've met your deductible, if your coinsurance is 20%, your payment would be $20. The insurance carrier would pay 80%, which is $80.
Copayment
A copayment is a fixed amount notated in the summary of benefits that is paid by the insured member for a covered health care service.
Deductible
A deductible is the amount paid by an insured member prior to the insurance carrier or policy beginning to cover services. After the deductible, a member is typically responsible for a copayment or coinsurance up to plan maximum. A deductible may not apply to all services.
Example: If the deductible is $1,000, the member pays the first $1,000. Then the carrier would pay a percentage of the balance due and the member would pay the copayment or coinsurance listed per their policy rules.
Dependent
A dependent is an eligible family member that is covered under the policyholder's plan, such as a spouse, partner, or child.
Durable Medical Equipment
Durable medical equipment is ordered by a health care provider and may include: wheelchairs, oxygen equipment, crutches or blood testing strips.
Elimination Period
An elimination period is the length of time between the beginning of an injury or illness and time that a member begins to receive benefits from the insurance carrier.
Excluded Services
Excluded services are health care services that the insurance plan or carrier does not cover.
Network
An insurance network (in-network coverage) includes facilities, providers, and suppliers that the plan is contracted with to provide health care services to you at a lower cost.
Out-of-Pocket Maximum
An out-of-pocket maximum is the maximum amount of responsibility a member will have to pay for covered services. When the member reaches their out-of-pocket maximum, the health plan pays 100% of the costs. Premiums do not count toward the out-of-pocket maximum.
Open Enrollment Period (OEP)
An Open Enrollment Period (OEP) is the annual period when a member is allowed to enroll in a health insurance plan or make changes to your existing coverage for the new plan year.
Primary Care Physician (PCP)
A primary care physician is the provider that coordinates a member's medical care.
Provider
A provider is a physician, health care professional, or health care facility that is licensed, certified, or accredited as required by state law.
Summary of Benefits and Coverage (SBC)
A summary of benefits (SBC) is an official summary from the carrier of the plan's costs and coverages.
Special Enrollment Period (SEP)
A Special Enrollment Period (SEP) is the time outside of the annual open enrollment period that a member is able to enroll in health insurance or make changes to an existing policy. One may qualify upon specific life events, including but not limited to: losing health coverage, aging out, getting married, having a baby, moving, etc. There is a 30 or 60 day time limit following the event to enroll in coverage, depending on the employer.
Specialist
A specialist is a doctor or health care professional who is trained or licensed in a specific area of medicine or special area of practice.
Example: An example of a medical specialist is an oncologist or a dermatologist.
Waiting Period
A waiting period is the time immediately following the hire date that an employee must wait until benefits are effective.
Example: If an employee is hired on 1/5/23 and the waiting period is 1st of the month after 30 days, their benefits would be effective on 3/1/23.
This glossary is intended to provide individuals with general information regarding insurance terms and is not an exhaustive list nor is it intended to replace or serve as substitute for the official plan documents or summary of benefits provided by the carrier. These definitions are subject to change.