Trying to make sense of today’s complex health insurance marketplace? We’ve developed this useful glossary to help you navigate the terms associated with purchasing employer-sponsored health plan solutions.
An Administrative Services Only (ASO) agreement is when a company self-funds its own employee benefits plan but hires another company to handle specific administrative services, like processing claims.
A balance bill occurs when a provider bills you the difference between what they charged for your care and what your health plan paid. You can tell you have one if the amount you owe on a provider bill is higher than the amount on the Explanation of Benefits (EOB) sent to you by your plan. Balance bills can happen with any plan, but Imagine360 helps our members resolve them.
A benefit year is the 12-month period a health plan is active. Some plans follow the calendar year, while others start and end in the summer or fall.
The Centers for Medicare and Medicaid Services (CMS) is a federal agency that provides health coverage to people through Medicare, Medicaid, the Children’s Health Insurance Program and the Health Insurance Marketplaces. CMS also works to make healthcare better, fairer and more effective for everyone.
Chronic conditions are health problems that typically last a year or more and need regular medical care. Examples include heart disease, diabetes and depression.
Coinsurance is the percentage you and your employer pay for the cost of covered medical services after you meet your deductible (the amount you pay out-of-pocket before your health plan starts to pay).
A copayment is the amount your health plan requires you to pay for a medical visit. It’s usually paid at the time of your visit.
Coordination of benefits is a process used to figure out who pays first when more than one health plan is responsible for covering the same provider claim.
Cost-sharing charges are the portion of your healthcare costs that you’re responsible for paying. These can include deductibles, coinsurance and copayments.
A deductible is the amount you pay out-of-pocket for medical coverage each year before your health plan starts to pay.
Direct contracting is when a health plan makes an agreement with a local health system that you can see its hospitals and providers at fair set prices. They can’t charge you more.
Eligible expenses are the medical costs your health plan covers under your benefits.
An emergency room (ER) is a part of the hospital that’s staffed and equipped to treat severe and life-threatening conditions. Visits to the ER usually cost more than urgent care or primary care, and, depending on the emergency, you may have a long wait.
The Employee Retirement Income Security Act (ERISA) of 1974 is a federal law that sets rules for employer-sponsored health and benefit plans offered by private employers. ERISA doesn’t require employers to offer plans, but if they do it makes sure the plan follows certain standards related to documentation, reporting and protections for employees. ERISA is administered by the U.S. Department of Labor and other federal agencies.
An Explanation of Benefits (EOB) is a statement from your health plan that shows how your benefits were applied to a provider’s claim. It also shows what the plan paid and what you owe the provider. It’s not a bill.
A fully insured health plan is a plan where the employer pay a premium – a set amount – to their insurance carrier. The carrier uses the premium to pay for medical claims the plan covers.
Group health insurance is an insurance plan that provides benefits to employees of a business or members of an organization.
A high-deductible health plan (HDHP) is a type of health plan that often has lower premiums (the amount deducted from your paycheck each month to pay for health insurance) but higher out-of-pocket costs until your plan starts paying for care.
The Health Insurance Portability and Accountability Act of 1996 (HIPAA) is a federal law designed to prevent your personal patient information from being shared without your consent or knowledge.
If a provider is in-network, that means they agreed to provide you care at set prices. They can’t charge you more than the contracted price.
A level-funded plan is a type of self-funded insurance that employers can choose that offers predictable monthly payments and built-in protections like stop-loss coverage. It provides more control and transparency than traditional fully insured plans, with the potential for savings if claims are lower than expected. Compared to fully self-funded plans, level-funded options help reduce financial risk while maintaining flexibility and access to claims data, empowering employers to make more informed decisions about their health benefits.
A type of health insurance that has contracts with healthcare providers and medical facilities to care for members at reduced costs. The providers make up the network.
Maximum out-of-pocket costs are the most you’ll pay for medical services in a year. Once you pay that amount, your health plan will pay all of your covered healthcare costs for the rest of the year.
A narrow network health plan works with a specific group of providers compared to other plans. This type of plan is used to help reduce costs for the health plan and its members.
If your plan with Imagine360 is open access, that means you can choose a provider even if they’re not in-network. They don’t have set prices with your plan but, unlike traditional health plans, we’ll work to reduce your costs so you don’t overpay for care.
Open enrollment is the period when you can sign up for a new health plan, make changes to your current plan or cancel coverage. The period usually lasts only a few weeks.
Out-of-network means that a provider hasn’t agreed to provide set prices to you for care. However, if your health plan with Imagine360 is open access, that means you can choose a provider even if they’re not in-network. Unlike traditional plans, we’ll work to reduce your costs so you don’t overpay for care.
Out-of-pocket costs are medical costs that you pay yourself and aren’t reimbursed by your health plan. They include deductibles, coinsurance and copayments for covered services, as well as costs your plan doesn’t cover.
A pharmacy benefit manager (PBM) is a company that manages prescription drug programs for health plans. PBMs process and pay for prescription drug claims based on the terms of a health plan’s pharmacy benefits.
A Plan Document is a written legal statement that lists the provisions of your health plan. It describes what benefits are available, who is eligible, how benefits are funded, who manages the plan and how changes can be made. All health plans subject to ERISA must have a plan document.
A point of service health plan is when individuals have a primary care provider (PCP) who must refer them to specialists, when needed. In a PPO (preferred provider organization), patients can see out-of-network providers, but they have to pay more of the costs if they’re not referred by the PCP.
With a PPO, also known as a preferred provider organization, a health plan contracts with providers to create a network of providers for the members to use. If a member goes outside that network, they pay more for care.
Preauthorization – sometimes call prior authorization – is a decision by your health plan that a treatment plan, test, prescription drug or other service is medically necessary to ensure your health. Although it may be required before you get certain services, it’s not a promise that your plan will cover the cost.
Preventive care includes screenings and tests that can find conditions early when they may be easier to treat. Other preventive services, such as vaccines, can help protect you from certain illnesses or diseases. Most health plans in the United States are required to provide certain preventive care services at no cost.
A primary care provider (PCP) is your main healthcare provider for non-emergency situations. There are many types of PCPs, including family doctors, nurse practitioners and pediatricians. They can treat common medical conditions, provide preventive care and manage chronic conditions, as well as refer you to medical specialists.
A provider network is a list of health providers that a health plan contracts with to provide medical care to its members.
Reference-based pricing (RBP) is a method that uses a reference point, such as Medicare or the cost of service, to determine the amount a health plan will pay for certain medical services. Unlike traditional health plans that negotiate discounts divorced from the realities of what a hospital actually receives in reimbursements from healthcare payers, reference-based pricing looks at Medicare allowable and actual cost to determine a fair reimbursement. With reference-based pricing added onto a self-funded health plan, companies and its employees save money on healthcare.
Renewal is the yearly process of continuing your health plan coverage or choosing new plan and coverage options.
With a self-funded insurance plan (also known as a self-insured plan), an employer assumes the financial risk for providing healthcare benefits to its employees. Self-insured employers pay for claims out-of-pocket, instead of paying a set premium to an insurance carrier for a fully insured plan. Typically, the employer sets up a trust fund using company and employee contributions to pay claims. The employer can manage the claims themselves or hire a third-party administrator.
Stop loss insurance – sometimes called excess insurance – protects self-funded employers from unexpectedly high claims. Instead of assuming 100% of the risk, stop loss puts a cap on what the employer is responsible for during a contract period.
There are two common types:
In both cases, the carrier reimburses the employer for costs above the agreed-upon threshold, helping stabilize budgets and reduce financial risk.
Telemedicine, or telehealth, is when healthcare providers use technology like phones, apps and video to talk with, diagnose and treat patients in real time without an in-person visit.
A third-party administrator (TPA) is a company that offers administrative support to self-insured health plans. TPAs manage a variety of services and health plan tasks, including collecting premiums, processing medical claims and supporting plan members. The TPA also makes sure that a health plan complies with federal law.
Urgent care is medical care for illness or injuries that need treatment quickly but aren’t typically serious enough to require an emergency room visit. Usually an appointment isn’t required, but there can be a long wait.
A usual, customary and reasonable (UCR) charge is the amount paid for a medical service in a geographic area based on what providers in the area usually charge for the same or similar service.
