Insurance & Employee Benefits
DEFINITIONS OF HEALTH INSURANCE TERMS
In February 2002, the Federal Government’s Interdepartmental Committee on Employment-
ASO (Administrative Services Only) – An arrangement in which an employer hires a third party to deliver administrative services to the employer such as claims processing and billing; the employer bears the risk for claims.
before a copayment applies.
Flexible spending accounts or arrangements (FSA) -
Flexible benefits plan (Cafeteria plan) (IRS 125 Plan) – A benefit program under Section 125 of the Internal Revenue Code that offers employees a choice between permissible taxable benefits, including cash, and nontaxable benefits such as life and health insurance, vacations, retirement plans and child care. Although a common core of benefits may be required, the employee can determine how his or her remaining benefit dollars are to be allocated for each type of benefit from the total amount promised by the employer. Sometimes employee contributions may be made for additional coverage.
Fully insured plan -
Group purchasing arrangement – Any of a wide array of arrangements in which two or more small employers purchase health insurance collectively, often through a common intermediary who acts on their collective behalf. Such arrangements may go by many different names, including cooperatives, alliances, or business groups on health. They differ from one another along a number of dimensions, including governance, functions and status under federal and State laws. Some are set up or chartered by States while others are entirely private enterprises. Some centralize more of the purchasing functions than others, including functions such as risk pooling, price negotiation, choice of health plans offered to employees, and various administrative tasks. Depending on their functions, they may be subject to different State and/or federal rules. For example, they may be regulated as Multiple Employer Welfare Arrangements (MEWAs).
Health Care Plans and Systems
medical group to provide care to the HMO’s membership. The group practice
may work exclusively with the HMO, or it may provide services to non-
patients as well. The HMO pays the medical group a negotiated, per capita rate, which the group distributes among its physicians, usually on a salaried basis.
groups to provide services to HMO members; may involve large single and multispecialty groups. The physician groups may provide services to both HMO and non-
Managed care plans -
Managed care provisions -
Maximum plan dollar limit -
Medical savings accounts (MSA) – Savings accounts designated for out-
use in a future year, instead of losing unused funds at the end of the year. Most MSAs allow unused balances and earnings to accumulate. Unlike FSAs, most MSAs are combined with a high deductible or catastrophic health insurance plan.
Minimum premium plan (MPP) – A plan where the employer and the insurer agree that the employer will be responsible for paying all claims up to an agreed-
Multiple Employer Welfare Arrangement (MEWA) – MEWA is a technical term under federal law that encompasses essentially any arrangement not maintained pursuantto a collective bargaining agreement (other than a State-
Other MEWAs are sponsored by Chambers of Commerce or similar organizations of relatively unrelated employers. These MEWAs are not considered to be health plans under ERISA. Instead, each participating employer’s plan is regulated separately under ERISA. States are free to regulate the MEWAs themselves. These MEWAs tend to serve as vehicles for participating employers to buy insurance policies from State licensed insurance companies or HMOs. They do not tend to self-
Premium equivalent -
Primary care physician (PCP) -
Reinsurance – The acceptance by one or more insurers, called reinsurers or assuming companies, of a portion of the risk underwritten by another insurer that has contracted with an employer for the entire coverage.
Third party administrator (TPA) – An individual or firm hired by an employer to handle claims processing, pay providers, and manage other functions related to the operation of health insurance. The TPA is not the policyholder or the insurer.
Types of health care provider arrangements
¨ Exclusive providers -
¨ Any providers -
¨ Mixture of providers -
Usual, customary, and reasonable (UCR) charges -
Survey definitions from:
¨ The National Compensation Survey definitions (BLS),
¨ The Medical Expenditure Panel Survey definitions (AHRQ), and
¨ The National Employer Health Insurance Survey definitions (NCHS).
Definitions from other Federal agencies and surveys, such as:
¨ The Current Population Survey (BLS/Census)
Glossaries and informational papers from websites such as:
¨ OPM’s Federal Employees Health Benefit Plans (glossary and specific plan booklets),
¨ Blue Cross / Blue Shield ,
¨ The National Center for Policy Analysis, and
¨ The Health Insurance Association of America.
Publications such as:
¨ Employee Benefit Plans: A Glossary of Terms, Ninth Edition 1997, Judith A. Sankey
¨ "Fundamentals of Employee Benefit Programs, Fourth addition"
¨ "Managed Care Plans and Managed Care Features: Data from the EBS to the NCS",
Cathy A. Baker and Iris S. Díaz, Compensation and Working Conditions, Spring 2001
¨ EBRI Notes Vol. 16, no. 7, July 1995
¨ HIAA Source Book
Personal communications with staff from some of the data sources cited above.
Source Page: http://www.bls.gov/ncs/ebs/sp/healthterms.pdf