| Annual Limits |
A cap on the benefits your insurance company will pay in a year while you’re enrolled in a particular health insurance plan. |
| CLASS Act |
Community Living Assistance Services and Support Act. A publicly sponsored long term care plan that offers a level of guaranteed issue coverage. |
| Co-insurance |
The percentage of allowed charges for covered services that you’re required to pay. For example, the health insurance may cover 80% of charges for a covered hospitalization, leaving you responsible for the other 20%. |
| Co-payment |
A fixed dollar amount paid by an individual receiving a health care service covered by the member’s plan. |
| Deductible |
The amount you must pay for covered care before your health insurance begins to pay. |
| Dependent |
A person who receives health coverage through a spouse, parent, or other family member who is the policyholder. |
| Donut Hole |
Most plans with Medicare prescription drug coverage (Part D) have a coverage gap (called a “donut hole”). After you and your drug plan have spent a certain amount of money for covered drugs, you have to pay all costs out-of-pocket for your prescriptions up to a yearly limit. Once you have spent up to the annual limit, your coverage gap ends and your drug plan helps pay for covered drugs again. |
| Early Retiree Reinsurance Program |
A program that provides reimbursement to eligible employer sponsored plans for a portion of the costs of health benefits for early retirees and early retiree’s spouses. Learn more about the Early Retiree Reinsurance Program. |
| Effective Date |
The date that health insurance coverage begins. The enactment date of the health care reform legislation is March 23, 2010. |
| Employer Mandate |
Beginning in 2014 employers will be required to offer minimum essential health benefit packages or pay a set portion of the cost of those benefits for use in the Exchanges. An employer who has 50 or more employees is subject to penalties if it fails to offer to its employees health coverage or if the coverage is not affordable or provide minimum value.
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| Essential Health Benefits |
A set of health care service categories that must be covered by certain plans including doctor office visits, hospitalizations, and prescriptions. Starting with plan years or policy years that begin on or after September 23, 2010, health plans can no longer impose a lifetime dollar limit on spending for these services and all plans, except grandfathered individual health insurance policies, must phase out annual dollar spending limits for these services by 2014. |
| Exchange |
A new competitive insurance marketplace where individuals and small businesses can purchase affordable and qualified health benefit plans. |
| Flexible Spending Account (FSA) |
An account where you contribute money from your salary before taxes are withheld then get reimbursed for your out-of-pocket health care and dependent care expenses. Employees or employers both fund the account. Amounts in the account at the end of the plan year cannot be carried over to the next year. |
| Free Choice Voucher |
An employer that provides and contributes health coverage for employees must provide free choice vouchers to each employee whose required contribution is between 8.0% and 9.8% of the employee’s household income. The employee’s income cannot be greater than 400% of the federal poverty level and they cannot be enrolled in the health plan. The Free Choice Voucher program was repealed in April 2011.
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| Grandfathered Plan |
A group health plan that was created—or an individual health insurance policy that was purchased—on or before March 23, 2010. Plans or policies may lose their “grandfathered” status if they make certain significant changes that reduce benefits or increase costs to consumers. In November 2010, an amendment to grandfathered plans was issued which allows employers to change insurance companies as long as the changes do not result in significant cost increases, a reduction in benefits or other changes described in the original grandfather rule.
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| Guaranteed Issue |
A requirement that health plans must permit you to enroll regardless of health status, age, gender, or other factors that might predict the use of health services. |
| HHS |
Department of Health and Human Services |
| Health Reimbursement Account (HRA) |
An HRA is funded solely by an employer and pays for qualified medical expenses up a maximum dollar for a coverage period. Any unused amounts can be carried over for reimbursements in later years. |
| Health Savings Account (HSA) |
An account created for individuals who are covered under high-deductible health plans (HDHPs) to save for medical expenses that HDHPs do not cover. Contributions are made into a tax-exempt savings account by the individual or the individual’s employer and are limited to a maximum amount each year. All unused amounts carry over during an individual’s lifetime. |
| Lifetime Limits |
A cap on the total lifetime benefits you may get from your insurance company. After a lifetime limit is reached, the insurance plan will no longer pay for covered services. |
| Medical Loss Ratios |
The fraction of revenue from a plan’s premiums that goes to pay for medical services. If an insurer uses 80 cents out of every premium dollar to pay its customers’ medical claims and activities that improve the quality of care, the company has a medical loss ratio of 80%. |
| Medicare |
A program under the U.S. Social Security Administration that reimburses hospitals and physicians for medical care provided to qualifying people over 65 years old. Learn more about Medicare. |
| Out-of-Pocket Limit |
The maximum amount you will have to pay for covered services in a year. This includes the coinsurance and sometimes the deductible.
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| PPACA |
Patient Protection and Affordable Care Act (enacted March 23, 2010) |
| Pre-existing Condition Insurance Plan |
A new program that will provide a health coverage option for you if you have been uninsured for at least six months, have a pre-existing condition, and have been denied coverage by an insurance company. This program will provide coverage until 2014 when you will have access to affordable health insurance choices through an Exchange. Learn more about the Pre-existing Condition Insurance Plan. |
| Preventive Coverage |
Routine health care that includes screenings, check-ups, and patient counseling to prevent illnesses, disease, or other health problems. See the services that are considered preventive under the health care reform law. |
| Rescission |
The retroactive cancellation of a health insurance policy. Under the Affordable Care Act, rescission is illegal except in cases of fraud or intentional misrepresentation of material fact as prohibited by the terms of the plan or coverage. |
| Subsidies |
The Affordable Care Act offers subsidies to people who might have a difficult time purchasing insurance. Subsidies are available to those with household incomes of up to 400% of the federal poverty level. |
| Wellness Programs |
A program intended to improve and promote health and fitness that’s usually offered through the work place, although insurance plans can offer them directly to their enrollees. |
