GLOSSARY OF TERMS
Benefits
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| Coinsurance |
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*A policy provision by which the insured person and the insurer
share the hospital and medical expenses resulting from an illness
or injury in a specified ratio (e.g., 80% / 20%), after the
deductible is met. |
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| Copayments
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| *Payments
made by members, in addition to deductibles and coinsurance,
to discourage inappropriate utilization and to help finance
health benefit plans. |
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| Deductible |
| *The
amount of out-of-pocket expenses that must be paid for health
services by the insured before becoming payable by the carrier.
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| Health
Maintenance Organization (HMO) |
| *A prepaid
medical group practice plan that provides a comprehensive predetermined
medical care benefit package. Provides benefits or levels of
benefits only if care is rendered by institutional and professional
providers within a specified network (with some exceptions for
emergency and out-of-area services). |
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| Long-Term
Disability Insurance |
| A
group or individual policy which provides coverage for longer
than a short term, often until the insured reaches age 65 in
the case of illness and for the remainder of his lifetime in
the case of accident. See also Short-Term Disability Insurance. |
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| Major
Medical Insurance |
| **A type
of Health Insurance that provides benefits up to a high limit
for most types of medical expenses incurred, subject to a large
deductible. Such contracts may contain limits on specific types
of charges, like room and board, and a percentage participation
clause sometimes called a coinsurance clause. These policies
usually pay covered expenses whether an individual is in or
out of the hospital. |
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| Out-of-Pocket
Maximum |
| *The
maximum amount of money a person will pay in addition to premium
payments. The out-of-pocket payment is usually the sum of the
deductible and coinsurance payments. |
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| Point-of-Service
Plan (POS) |
| *A health
plan that allows members to choose to receive services from
a participating or nonparticipating network provider, usually
with a financial disincentive for going outside the network.
Members generally must receive a referral from their Primary
Care Physician (PCP) before obtaining healthcare services. |
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| Preferred
Provider Organization (PPO) |
| *A
health plan that allows members to choose to receive services
from a participating or nonparticipating network provider, usually
with a financial disincentive for going outside the network.
Members do not need a referral before obtaining healthcare services. |
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| Primary
Care Physician (PCP) |
| *The physician
in a managed care plan who is responsible for coordinating all
care for an individual patient, from providing direct care services
to referring the patient to specialist and hospital care. |
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| Short-Term
Disability Insurance |
| **A
group or individual policy usually written to cover disabilities
of 13 or 26 weeks in duration, though coverage for as long as
two years is not uncommon. Contrast with Long-Term Disability
Insurance. |
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Reference:
*Employee Benefit Plans: A Glossary of Terms
(Ninth Edition)
Published in 1997 by the International Foundation of Employee
Benefits Plans, Inc.
**Information
Provided by iNSWEB®
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