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Familiarity with commonly used terms can help you become a more knowledgeable healthcare consumer.

Brand Name Drug:
FDA approved prescription drugs marketed under a specific brand name by the company that manufactures it.

COBRA:
This federal law allows employees and dependents who are enrolled in an employer-sponsored plan to temporarily continue receiving health coverage after certain qualifying events like termination or divorce.

Co-Insurance:
Co-insurance refers to the amount of money that a member is required to pay for healthcare services, after any required deductible has been paid. Co-insurance is often specified by a percentage. For example, the employee pays 15% toward the charges for a covered service and the insurance company pays 85%.

Co-payment:
The flat fee you pay each time you utilize a healthcare service or fill a prescription.

Deductible:
The specified amount you must pay for healthcare in a plan year before the plan will begin to cover all or a portion of your costs. Some plans have no deductible.

Dependent:
A family member or other individual who meets the eligibility criteria established by HSS for enrollment in an available healthcare plan.

Dental Maintenance Organization (DMO):
An entity that provides dental services through a closed network. DMO participants can only obtain service from network dentists and typically need pre-approval from a primary care dentist before seeing a specialist.

Effective Date:
The actual date your healthcare coverage is scheduled to begin. You are not covered until the effective date.

Employer Contribution:
The amount your employer pays toward the cost of your health plan premiums.

Explanation of Benefits (EOB):
Written, formal statement sent to PPO enrollees that lists the services provided and costs billed by their health plan.

Evidence of Coverage (EOC):
The Evidence of Coverage gives details about the benefits and exclusions of your health plan and explains how to get the care you need. The EOC is an important legal document and is your contract with your Plan provider. It explains your rights, benefits and responsibilities as a member of your Plan. It also explains the Plan Providers responsibilities to you. The EOC should be reviewed in conjunction with this benefits guide because the guide does not list every service, every limitation or every exclusion of your Plan.

Exclusions:
The list of conditions, injuries, or treatments that are not covered under your health insurance policy. Exclusions can be found in your plan document called the Evidence of Coverage.

Formulary:
A comprehensive list of prescription drugs that are covered by a medical plan. The formulary is designed to assist physicians in prescribing drugs that are medically necessary and cost effective for members. The formulary is updated periodically.

Generic Drug:
FDA approved prescription drugs that are a therapeutic equivalent to the Brand Name Drug, contain the same active ingredient as the Brand Name Drug, and cost less than the Brand Name Drug equivalent.

Health Maintenance Organization (HMO):
An entity that provides health services through a closed network. Unlike PPOs, HMOs either employ their own staff or contract with groups of providers. HMO participants typically need pre-approval from a primary care provider before seeing a specialist.

In-Network:
Providers or healthcare facilities which are part of a health plan’s network of providers with which it has negotiated a discount. Enrollees usually pay less when using an in-network provider, because those networks provide services at lower cost to the insurance companies with which they have contracts.

Lifetime Maximum Benefit:
The maximum amount a health plan will pay in benefits to an insured individual during that individual’s lifetime.

Open Enrollment:
The period of time when you can change your health benefit elections without a qualifying event.

Out-of-Network:
Providers or healthcare facilities which are not in your health plan’s provider network. Some plans do not cover Out-of-Network service costs. Others charge a higher co-payment for this type of service.

Out-of-Pocket Costs:
The actual costs you pay–including premiums and co-payments–for your healthcare.

Out-Of-Pocket Maximum:
The amount of money that an individual must pay out of their own pocket, before an insurance company will pay 100% for an individual’s healthcare expenses.

Out-of-Area:
A location outside the geographic area covered by a health plan’s network of providers.

Preferred Provider Organization (PPO:
An entity that contracts to provide healthcare services to subscribers at negotiated, often discounted, rates.

Premium:
The amount charged by an insurer for healthcare coverage. This cost is usually shared by employer and employee.

Primary Care Physician (PCP):
The doctor (or nurse practitioner) who coordinates all your medical care and treatment. HMOs require all plan participants be assigned to a PCP.

Qualifying Event:
A change in your life situation that allows you to make a change in your benefit elections outside Open Enrollment. This includes marriage, domestic partnership, separation, divorce or dissolution of partnership, the birth or adoption of a child and the death of a dependent as well as obtaining or losing other healthcare coverage.

Reasonable and Customary Charges:
The average fee charged by a particular type of healthcare practitioner within a geographic area. Often used by medical plans as the amount of money they will approve for a specific test or procedure. If the fees are higher than the approved amount, the individual receiving the service is responsible for paying the difference.