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Glossary

Terms Definitions

Benefit Package

The set of benefits that an insurance policy covers. The Healthy NY benefit package includes coverage for important health services including inpatient and outpatient hospital services, physician services, maternity care, preventive health services, diagnostic and X-ray services and emergency services.

Brand Name Drug

A prescription drug that has a trade name and is protected by a patent. The patent holder or entity that has obtained the rights to manufacture the drug has the exclusive right to manufacture it. When a patent expires, a generic version of the brand name drug may be available at a lower cost.

Broker

A person licensed to help individuals and businesses choose an insurance policy. A broker is able to provide quotes for the cost of many types of insurance, including Healthy NY. Brokers receive a commission from the insurance company for their work.

Cafeteria Plan

See “Section 125 Plan.”

Carrier

See ”Insurance Company.”

Certificate of Insurance

The document or documents that a member of a group insurance plan receives that provides a summary of general terms regarding coverage, eligibility and benefits. The certificate of insurance is different from an insurance policy.

Certificate of Creditable Coverage

A document your insurance company gives to you when your insurance coverage ends. The certificate includes information about when your coverage started and ended and information about HIPAA rights. This certificate is evidence of your period of previous coverage.

Coinsurance

Some insurance coverage requires you to pay a percentage of the cost of covered medical services. For example, you might pay 20 percent, and your insurance company would pay 80 percent. Your portion of the amount is called coinsurance.

COBRA

The federal Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). COBRA gives workers who work for employers with 20 or more employees and their families the right to continue to purchase group health insurance for limited periods of time when they would otherwise lose coverage due to certain events. This coverage extension is often called “COBRA coverage.”

Qualifying events include voluntary or involuntary job loss, reduction in hours, transition between jobs, death, divorce and other life events. Qualified individuals may be required to pay up to 102% of the premium cost. The length of time that a person may have federal COBRA coverage depends on why the person is losing coverage and can be from 18 to 36 months.

Also see “continuation coverage.”

Continuation Coverage

New York State’s continuation coverage law resembles the federal COBRA. It applies to employers with fewer than 20 employees. Continuation coverage gives workers who work for employers with fewer than 20 employees and their families the right to continue to purchase group health insurance for limited periods of time when they would otherwise lose coverage due to certain events. Qualifying events include voluntary or involuntary job loss, reduction in hours, transition between jobs, death, divorce and other life events. Qualified individuals may be required to pay up to 102% of the premium cost. People eligible for continuation coverage may have up to 36 months of coverage.

New York State continuation coverage also grants people who are eligible for federal COBRA coverage who are not entitled to up to 36 months of coverage under federal law

Copayment

A flat amount that you must pay at the time you receive services. With Healthy NY, copayments are the same regardless of which insurance company provides your coverage.

Creditable Coverage

Refers to health insurance coverage you had before you enrolled in your new health plan.

Deductible

An amount that you must pay before your insurance company will pay for services.

Effective Date

The date that your insurance coverage begins.

Emergency Condition

A sudden medical or behavioral condition that is severe enough that a prudent layperson could reasonably expect the condition to result in placing the person’s health in serious jeopardy or cause impairment, dysfunction or disfigurement if not immediately treated.

Exclusive Provider Organization (EPO)

A type of managed care coverage in which you pay a monthly premium in exchange for services. The monthly premium is the same, regardless of how many services you use in a month. All of your coverage must be obtained in-network. With an EPO, you do not need a referral from your primary care physician to see a specialist. Out-of-network care is not covered.

Explanation of Benefits (EOB)

The insurance company's written summary of a claim. The EOB shows what the provider billed, what the insurance company paid and what you must pay. It also includes an explanation of any denial or reduction in benefits paid.

External Appeal

A request made to the New York State Department of Financial Services when an insurance company denies health care services. Consumers have the right to an external appeal when an insurance company denies services as not medically necessary, experimental/investigational, a clinical trial, a rare disease treatment or out-of-network. Providers have the right to an external appeal when these health care services are denied concurrently or retrospectively. External appeals are reviewed by an independent external appeal agent with medical experts that will either overturn (in whole or part) or uphold the insurance company’s denial.

Formulary

The list of all prescription drugs covered by your insurance policy. The Healthy NY formulary includes generic and brand name drugs.

Generic Drug

A drug that is chemically equivalent to a brand name drug. Generic drugs are often less expensive than brand name drugs. This is because the patent for the brand name drug has expired, so many different manufacturers can manufacture the drug. Generic drugs are sold under the chemical name instead of the brand name.

Group Insurance

Health insurance through a group such as an employer, association, union or other entity.

Health Maintenance Organization (HMO)

A type of managed care coverage in which you pay a monthly premium in exchange for coverage. The monthly premium is the same, regardless of how many services you use in a month. All of your coverage must be obtained in-network. You must select a primary care physician, who will coordinate your care and provide referrals to specialists. With an HMO, you must have a referral to see a specialist. Out-of-network care is not covered.

Health Plan

See “Insurance Company.”

Health Savings Account (HSA)

A savings account that can be opened by someone with a high deductible health plan that can be used to pay for deductibles and qualified medical expenses such as over-the-counter medications on a tax-free basis. Visit the U.S. Department of the Treasury Web site for more information.

High Deductible Health Plan (HDHP)

A health insurance policy that requires you to meet a deductible amount before the insurance policy begins to pay for most services. A high deductible health plan can be used with a health savings account.

HIPAA

The federal Health Insurance Portability and Accountability Act of 1996. HIPAA limits the ability of an employer-based group plan to exclude coverage for pre-existing conditions. It also provides additional opportunities to enroll in a group health plan if you lose other coverage or have a qualifying event. It provides federal protections for personal health information and sets rules on who can and cannot access this information.

Individual Insurance

Health insurance purchased on an individual basis without any involvement by a group or employer. Individual insurance may also cover a spouse and dependents.

Insurance Company

The company that collects premiums and provides insurance coverage in return. An insurance company may be an HMO, commercial insurer or other entity.

Mini-COBRA

See “Continuation Coverage.”

Network

A group of doctors, hospitals and other health care providers contracted to provide services to insurance companies’ customers for less than their usual fees. Provider networks can cover a large geographic market or a wide range of health care services. Insured individuals typically pay less for using a network provider.

Policy

A contract between the policyholder and the insurance company that provides the complete terms regarding coverage, eligibility and benefits. The policy includes any associated documents such as riders and endorsements that have been made a part of the policy.

Premium

The monthly amount that you pay to the insurance company in exchange for insurance coverage.

Premium-Only-Plan (POP)

See “Section 125 Plan.”

Primary Care Physician (PCP)

A provider who provides preventive and routine care and coordinates care and makes referrals to specialists as needed. Generally, HMO members must choose a PCP from a list of participating providers. An internist, pediatrician, family physician, general practitioner or, in some instances, an OB/GYN may be a PCP.

Provider

Health care professionals or facilities that provide health care services. Providers include physicians, hospitals, health care practitioners, labs, clinics, pharmacies or other facilities or practitioners.

Provider Network

See “Network.”

Qualified Medical Expenses

Health care costs that can be paid for on a tax-free basis with a health savings account and that may qualify for other preferential tax treatment. The federal government defines what qualifies as a qualified medical expense. For more information, please visit the Internal Revenue Service’s Web site.

Schedule of Benefits

A document provided by the insurance company that lists the benefits covered by the policy and any deductible, copayments and coinsurance.

Section 125 Plan

A section 125 plan allows employees of a business to between receiving cash compensation or paying for their share of health insurance premiums and other qualified benefits with pre-tax earnings. One common type of section 125 plan is a premium only plan, or “POP.” A POP allows a business and its employees to pay health insurance premiums with pre-tax dollars, saving the employer and employees money. Section 125 refers to the section of the Internal Revenue Code that created the plan.

Sole Proprietor

The only owner and only employee of a business.

Utilization Review

The insurance company’s process of reviewing whether a health care service is medically necessary using clinical review criteria. Utilization review may take place before, during or after the services are rendered. It must be conducted by appropriate administrative personnel or health care professionals and overseen by a licensed physician.

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