Glossary of Terms

Key Terms Defined

As we expand our website content, we’ll also expand our Resources to include this Glossary.  So much of the industry jargon can be confusing.  That’s why we’re here.  If there is something you don’t understand, whether we explain it here or not, contact us!


These health insurance terms and concepts can help businesses and their employees better understand their healthcare coverage and make informed decisions about their insurance plans. But not all of these terms are necessarily relevant to all plans or even those that might be packaged in your benefits plan.  But you may stumble across them doing any of your personal research. This is a just one of many available resources available from the AEB Team as part of our Unique Benefit and 365 Client Care Process that includes a commitment to education.

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Certain definitions are defined by law and not all these terms will apply to all benefit plans.  Some are not provided by AEB.


Accountable care organization

A group of health care providers who give coordinated care, chronic disease management, and thereby improve the quality of care patients get. The organization’s payment is tied to achieving healthcare quality goals and outcomes that result in cost savings.

Actuarial value

The percentage of total average costs for covered benefits that a plan will cover. For example, if a plan has an actuarial value of 70%, on average, you would be responsible for 30% of the costs of all covered benefits. However, depending on your actual healthcare needs and the terms of your insurance policy, you could be responsible for a higher or lower percentage of the total costs of covered services for the year.

Affordable Care Act (ACA)

The comprehensive health care reform law was enacted in March 2010 (sometimes known as ACA, PPACA, or “Obamacare”).
The law has 3 primary goals:

  1. Make affordable health insurance available to more people. The law provides consumers with subsidies (“premium tax credits”) that lower costs for households with incomes between 100% and 400% of the federal poverty level (FPL). If your income is above 400% FPL, you may still qualify for a premium tax credit. If your income is at or below 150% FPL, you may qualify to enroll in or change Marketplace coverage through a Special Enrollment Period.
  2. Expand the Medicaid program to cover all adults with income below 138% of the FPL. (Not all states have expanded their Medicaid programs.)
  3. Support innovative medical care delivery methods designed to lower health care costs generally.


A licensed person or organization authorized to sell insurance by or on behalf of an insurance company.

Agent and broker (health insurance)

A trained insurance professional who can help you enroll in a health insurance plan. Agents may work for a single health insurance company; brokers may represent several companies. You won’t pay anything additional if you enroll with an agent or broker.
Agents and brokers must be licensed in their states and have signed agreements to sell Marketplace health plans. In many states, brokers are required to act in a consumer’s best interest.
Agents and brokers often get payments (“commissions”) from insurance companies for selling plans. Some may not sell plans of companies they don’t represent.
You can qualify for a premium tax credit and other savings if you enroll with an agent or broker. But to get the savings, the agent or broker must enroll you through the Health Insurance Marketplace®.

Allowed Amount

This is the maximum payment the plan will pay for a covered health care service. May also be called “eligible expense”, “payment allowance”, or “negotiated rate.”

Allowed Maximum Benefit

Allowed Maximum Benefit or “maximum dollar limit” is the maximum amount of money that your health insurance company will pay within a certain period. That could refer to a lifetime maximum benefit or an annual maximum benefit.

See Lifetime Maximum Benefit below.

Ancillary Benefits

A type of supplementary health coverage to help cover expenses not covered by your current healthcare plan. These benefits provide additional value to employees by helping to ensure that all of their medical needs are met. Ancillary benefits vary considerably according to the policies purchased — dental care, vision care, ambulance rides, disabilities, and more.

Example: Susan receives dental and vision coverage as ancillary benefits to her healthcare plan.


A request that your health insurer or plan review a decision that denies a benefit or payment (either in whole or in part).




Balance Billing

When a provider bills you for the balance remaining on the bill that your plan doesn’t cover. This amount is the difference between the actual billed amount and the allowed amount. For example, if the provider’s charge is $200 and the allowed amount is $110, the provider may bill you for the remaining $90. This happens most often when you see an out-of-network provider (non-preferred provider). A network provider (preferred provider) may not bill you for covered services.

Benefit Period

The time frame during which your health insurance plan calculates coverage for certain services, such as hospital stays.

Example: John’s health insurance plan defined a benefit period for inpatient hospital care as 60 days.



A temporary or preliminary agreement which provides proof of coverage until a policy can be written or delivered.


A licensed person or organization paid by you to look for insurance on your behalf.



The termination of insurance coverage during the policy period. Flat cancellation is the cancellation of a policy as of its effective date, without any premium charge.


Notice to an insurer that under the terms of a policy, a loss maybe covered.


The first or third party. That is any person who asserts right of recovery from their insurer of costs incurred.

COBRA Coverage

Continuation of group health insurance coverage for a limited time after employment ends or certain other qualifying events.

Example: After leaving her job, Emily could continue her health insurance coverage through COBRA.


The percentage of healthcare costs you pay after you’ve met your deductible, with your insurance plan covering the rest.

Example: Mike’s health insurance plan has 20% coinsurance, so he pays 20% of the cost of his hospital stay after meeting his deductible.

Copayment (Copay)

A fixed amount you pay for a covered healthcare service, such as a doctor’s visit or prescription medication.

Example: Emily’s health insurance plan has a $30 copayment for specialist visits, but she has a $15 copayment for her primary care physician visit.

Cost Sharing

Your share of costs for services that a plan covers that you must pay out of your own pocket (sometimes called “out-of-pocket costs”). Some examples of cost-sharing are copayments, deductibles, and coinsurance. Family cost sharing is the share of cost for deductibles and out-of-pocket costs you and your spouse and/or child(ren) must pay out of your own pocket. Other costs, including your premiums, penalties you may have to pay, or the cost of care a plan doesn’t cover, usually aren’t considered cost-sharing.

Credit Life Insurance

Insurance is issued to a creditor (lender) to cover the life of a debtor (borrower) for an outstanding loan.




The company refuses to accept the request for insurance coverage on a claim. It is against the law to decline coverage on health benefits for pre-existing conditions. But a claim might be declined or denied on the basis of a lack of medical necessity and to the stipulated terms of a policy.


The amount you must pay out of pocket for covered healthcare services annually before your insurance plan starts to pay.

Example: John’s health insurance plan has an annual $1,000 deductible, so he must pay the first $1,000 of his medical expenses yearly.

Dependent Coverage

Health insurance coverage that extends to family members, such as spouses and children, under the primary policyholder’s plan.

Example: Susan added her husband and children to her health insurance plan for dependent coverage.

Diagnostic Test

Tests to figure out what a health problem.

For example, an x-ray can be a diagnostic test to see if you have a broken bone.

Donut hole (Medicare prescription drug)

Most plans with Medicare prescription drug coverage (Part D) have a coverage gap (called a “donut hole”). This means that after you and your drug plan have spent a certain amount of money on covered drugs, you have to pay all costs out-of-pocket for your prescriptions up to a yearly limit. Your coverage gap ends once you have spent up to the yearly limit, and your drug plan helps pay for covered drugs again.

Durable Medical Equipment

A health care provider ordered equipment and supplies for everyday or extended use. DME may include oxygen equipment, wheelchairs, and crutches.



Emergency Medical Condition

An illness, injury, symptom (including severe pain), or condition severe enough to risk serious danger to your health if you didn’t get medical attention right away. If you didn’t get immediate medical attention you could reasonably expect one of the following: 1) Your health would be put in serious danger; or 2) You would have serious problems with your bodily functions; or 3) You would have serious damage to any part or organ of your body.

Emergency Medical Transportation

Ambulance services for an emergency medical condition. Types of emergency medical transportation may include air, land, or sea. Your plan may not cover all types of emergency medical transportation or may pay less for certain types.

Emergency Room Care / Emergency Services

Services to check for an emergency medical condition and treat you to keep an emergency medical condition from getting worse. These services may be provided in a licensed hospital’s emergency room or other place that provides care for emergency medical conditions.

Essential Benefits

Essential benefits are covered by your insurance, regardless of whether you have met your annual deductible.

Under the Affordable Care Act, essential benefits are defined as services that every health care plan must cover. Essential Benefits include the following ten services:

  1. Ambulatory patient services (aka, outpatient care)
  2. Emergency services
  3. Hospitalization
  4. Pregnancy Care (including maternity and newborn care)
  5. Mental health and substance abuse
  6. Prescription Drugs
  7. Habilitation and Rehabilitation (includes devices)
  8. Laboratory services
  9. Preventive and wellness services
  10. Pediatric care (includes dental and vision for pediatric patients)

Excluded Services

Health care services that your plan doesn’t pay for or cover. See Exclusion.


Specific healthcare services, treatments, or conditions not covered by an insurance policy.

Example: Emily’s dental insurance policy had an exclusion for cosmetic dental procedures.

Exclusive Provider Organization (EPO)

A health insurance plan that requires members to use a specific network of providers but doesn’t typically require referrals.

Example: Maria’s EPO plan covers services only if she sees healthcare providers within the designated network.



Face Amount

The dollar amount to be paid to the beneficiary when the insured dies. It does not include other amounts that may be paid from insurance purchased with dividends or any policy riders.


A list of prescription drugs covered by a health insurance plan and the associated cost-sharing requirements.

Example: Susan checked her health insurance plan’s formulary to see if her prescribed medication was covered.



Generic drugs

A prescription drug that has the same active-ingredient formula as a brand-name drug. Generic drugs usually cost less than brand-name drugs. The Food and Drug Administration (FDA) rates these drugs to be as safe and effective as brand-name drugs.

Grace Period

A specified period immediately following the premium due date during which a payment can be made to continue a policy in force without interruption. This applies only to Life and Health policies. Check your policy to be sure that a grace period is offered and how many days, if any, are allowed.


A complaint that you communicate to your health insurer or plan.

Guarantee Insurability

An option that permits the policy holder to buy additional stated amounts of life insurance at stated times in the future without evidence of insurability.


Habilitation Services

Health care services that help a person keep, learn or improve skills and functioning for daily living. Examples include therapy for a child who isn’t walking or talking at the expected age. These services may include physical and occupational therapy, speech-language pathology, and other services for people with disabilities in a variety of inpatient and/or outpatient settings.

Health Insurance

A policy that will pay specifies sums for medical expenses or treatments. Health policies can offer many options and vary in their approaches to coverage.

Health Maintenance Organization (HMO)

A type of health insurance plan that requires members to choose a primary care physician (PCP) and get referrals to see specialists.

Example: Emily has an HMO plan and needs a referral from her PCP to see a specialist like a dermatologist.

Health Savings Account (HSA)

A tax-advantaged account that allows individuals to save money for medical expenses while reducing taxable income.

Example: Robert contributes to his HSA to save for future healthcare costs and lower his taxable income.

Home Health Care

Health care services and supplies you get in your home under your doctor’s orders. Services may be provided by nurses, therapists, social workers, or other licensed health care providers. Home health care usually doesn’t include help with non-medical tasks, such as cooking, cleaning, or driving.


Services to provide comfort and support for persons in the last stages of a terminal illness and their families.


Care in a hospital that requires admission as an inpatient and usually requires an overnight stay. Some plans may consider an overnight stay for observation as outpatient care instead of inpatient care.

Hospital Outpatient Care

Care in a hospital that usually doesn’t require an overnight stay.



Individual Responsibility Mandate

Sometimes called the “individual mandate,” the duty you may have to be enrolled in health coverage that provides minimum essential coverage. If you don’t have minimum essential coverage, you may have to pay a penalty when you file your federal income tax return unless you qualify for a health coverage exemption.

In-Network Coinsurance

Your share (for example, 20%) of the allowed amount for covered health care services. Your share is usually lower for in-network covered services.

In-Network Copayment

A fixed amount (for example, $15) you pay for covered health care services to providers who contract with your health insurance or plan. In-network copayments usually are less than out-of-network copayments.

In-Network Provider

A healthcare provider or facility that has contracted with your insurance company to provide services at a reduced cost.

Example: Mary chose an in-network hospital for her surgery to minimize her out-of-pocket expenses.


The policyholder – the person(s) protected in case of a loss or claim.


The insurance company.


Job-based health plan

Coverage that is offered to an employee (and often his or her family) by an employer.




Life Insurance

A policy that will pay a specified sum to beneficiaries upon the death of the insured.

Lifetime Maximum

The maximum amount an insurance plan will pay for covered services over the course of a policyholder’s lifetime.

Example: William’s health insurance plan has a lifetime maximum of $1.6 million for covered services.


The maximum amount a policy will pay either overall or under a particular coverage.

Long-term care

Services include medical and non-medical care provided to people who cannot perform basic activities of daily living, such as dressing or bathing. Long-term support and services can be provided at home, in the community, in assisted living, or in nursing homes. Individuals may need long-term support and services at any age. Medicare and most health insurance plans don’t pay for long-term care.



A marketplace for health insurance where individuals, families, and small businesses can learn about their plan options; compare plans based on costs, benefits, and other important features; apply for and receive financial help with premiums and cost-sharing based on income; and choose a plan and enroll in coverage. Also known as an “Exchange”. The Marketplace is run by the state in some states and by the federal government in others. In some states, the Marketplace also helps eligible consumers enroll in other programs, including Medicaid and the Children’s Health Insurance Program (CHIP). Available online, by phone, and in person.

Maximum Out-of-Pocket Limit

Yearly amount the federal government sets as the most each individual or family can be required to pay in cost sharing during the plan year for covered, in-network services. Applies to most types of health plans and insurance. This amount may be higher than the out-of-pocket limits stated for your plan.


A joint federal and state program that provides health coverage to low-income individuals and families.

Example: Bobbi’s children are covered by Medicaid because their family income falls within the eligibility criteria.


A federal health insurance program primarily for individuals aged 65 and older and certain younger individuals with disabilities.

Example: Betty qualifies for Medicare now that she has reached age 65.

Medically Necessary

Healthcare services or treatments that are deemed essential for the diagnosis or treatment of a medical condition and are covered by insurance.

Example: Al’s insurer agreed that the surgery he needed was medically necessary and covered the cost.

Minimum Essential Coverage

Health coverage that will meet the individual responsibility requirement. Minimum essential coverage generally includes plans, health insurance available through the Marketplace or other individual market policies, Medicare, Medicaid, CHIP, TRICARE, and certain other coverage.

Minimum Value Standard

A basic standard to measure the percent of permitted costs the plan covers. If you’re offered an employer plan that pays for at least 60% of the total allowed costs of benefits, the plan offers minimum value and you may not qualify for premium tax credits and cost sharing reductions to buy a plan from the Marketplace.



The facilities, providers, and suppliers your health insurer has contracted with to provide healthcare services to members.

Example: Pam’s health insurance plan has a network of preferred doctors and hospitals, which she visits for lower out-of-pocket costs.

Network Provider (Preferred Provider)

A provider who has a contract with your health insurer or plan who has agreed to provide services to members of a plan. You will pay less if you see a provider in the network. Also called “preferred provider” or “participating provider.”


A requirement that job-based coverage not discriminate based on health status. Coverage under job-based plans cannot be denied or restricted. You also can’t be charged more because of your health status. Job-based plans can restrict coverage based on other factors such as part-time employment that aren’t related to health status.


Open Enrollment Period

A specific time frame during which individuals can enroll in or make changes to their health insurance plans.

Example: Harold missed the open enrollment period and had to wait until the following year to change his coverage.

Orthotics and Prosthetics

Leg, arm, back and neck braces, artificial legs, arms, and eyes, and external breast prostheses after a mastectomy. These services include: adjustment, repairs, and replacements required because of breakage, wear, loss, or a change in the patient’s physical condition.

Out-of-Network Copayment

A fixed amount (for example, $30) you pay for covered health care services from providers who do not contract with your health insurance or plan. Out-of-network copayments usually are more than in-network copayments.

Out-of-network Provider (Non-Preferred Provider)

A provider who doesn’t have a contract with your plan to provide services. If your plan covers out-of-network services, you’ll usually pay more to see an out-of-network provider than a preferred provider. Your policy will explain what those costs may be. May also be called “non-preferred” or “non-particiapting” instead of “out-of-network provider”.

Out-of-Network Provider

A healthcare provider or facility that does not have a contract with your insurance company leads to higher service costs.

Example: Ben visited an out-of-network specialist and had to pay higher fees because his insurance didn’t cover as much.

Out-of-pocket Limit

The most you could pay during a coverage period (usually one year) for your share of the costs of covered services. After you meet this limit the plan will usually pay 100% of the allowed amount. This limit helps you plan for health care costs. This limit never includes your premium, balance-billed charges or health care your plan doesn’t cover. Some plans don’t count all of your copayments, deductibles, coinsurance payments, out-of-network payments, or other expenses toward this limit. See Out-of-Pocket Maximum.

Out-of-Pocket Maximum (OOPM)

The most you have to pay for covered services in a plan year, after which your insurance pays 100% of covered benefits.

Example: Deb’s out-of-pocket maximum is $5,000, so her insurance covers all additional medical expenses once she reaches that amount.


Patient Protection and Affordable Care Act

The first part of the comprehensive healthcare reform law was enacted on March 23, 2010.

The Health Care and Education Reconciliation Act amended the law on March 30, 2010. The name “Affordable Care Act” is usually used to refer to the final, amended version of the law. (It’s sometimes known as “PPACA,” “ACA,” or “Obamacare.”)

The law provides numerous rights and protections that make health coverage more fair and easy to understand, along with subsidies (through “premium tax credits” and “cost-sharing reductions”) to make it more affordable.
The law also expands the Medicaid program to cover more people with low incomes.

Physician Services

Health care services a licensed medical physician, including an M.D. (Medical Doctor) or D.O. (Doctor of Osteopathic Medicine), provides or coordinates.


Health coverage issued to you directly (individual plan) or through an employer, union, or other group sponsor (employer group plan) that provides coverage for certain health care costs is also called a “health insurance plan,” “policy,” “health insurance policy,” or “health insurance.”


The written contract of insurance.

Policy Limit

The maximum amount a policy will pay, either overall or under a particular coverage.

Point of Service (POS)

Point-of-service plans, like HMOs, require a patient to see a Primary Care Physician before visiting a specialist. They differ from HMOs because they usually have a more extensive network of contracted doctors and providers. As with most care networks, your out-of-pocket costs will be higher if you go out of the POS network.


The process of obtaining approval from an insurance company before undergoing certain medical procedures or treatments.

Example: Anne’s insurer required preauthorization before she could have elective surgery.


The amount you pay for your health insurance coverage — typically on a monthly basis.

Example: Polly’s monthly health insurance premium is $200.

Premium Tax Credit

A subsidy provided by the government to help lower-income individuals and families pay for health insurance premiums purchased through the Health Insurance Marketplace.

Example: Jake receives a premium tax credit to make his health insurance more affordable.

Preferred Provider Organization (PPO)

A type of health insurance plan that offers more flexibility in choosing healthcare providers and specialists without referrals.

Example: Earnie’s PPO plan allows him to see any doctor or specialist he chooses without needing referrals.

Prescription Drug Coverage

Coverage under a plan that helps pay for prescription drugs. If the plan’s formulary uses “tiers” (levels), prescription drugs are grouped together by type or cost. The amount you’ll pay in cost-sharing will be different for each “tier” of covered prescription drugs.

Prescription Drugs

Drugs and medications that, by law, require a prescription.

Preventive Care (Preventive Services)

Routine healthcare services and screenings are designed to prevent or detect health issues early, often covered at no cost by health insurance.

Example: Annual check-ups and vaccinations are examples of preventive care.

Primary Care Physician

A physician, including an M.D. (Medical Doctor) or D.O. (Doctor of Osteopathic Medicine), who provides or coordinates a range of healthcare services for you.

Primary Care Provider

A physician, including an M.D. (Medical Doctor) or D.O. (Doctor of Osteopathic Medicine), nurse practitioner, clinical nurse specialist, or physician assistant, as allowed under state law and the terms of the plan, who provides, coordinates, or helps you access a range of health care services.


An individual or facility that provides health care services. Some examples of providers include a doctor, nurse, chiropractor, physician assistant, hospital, surgical center, skilled nursing facility, and rehabilitation center. The plan

may require the provider to be licensed, certified, or accredited as required by state law.



Small employers who don’t offer their employees group health coverage can help them pay for medical expenses through a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA). If your employer offers you a QSEHRA, you can use it to help pay your household’s health care costs (like your monthly premium) for qualifying health coverage.

Qualified health plan

An insurance plan that’s certified by the Health Insurance Marketplace®, provides essential health benefits, follows established limits on cost-sharing (like deductibles, copayments, and out-of-pocket maximum amounts), and meets other requirements under the Affordable Care Act. All qualified health plans meet the Affordable Care Act requirement for having health coverage, known as “minimum essential coverage.”

Qualifying health coverage

Any health insurance that meets the Affordable Care Act requirement for coverage. The fee for not having health insurance no longer applies. This means you no longer pay a tax penalty for not having health coverage.

Examples: individual plans, including Marketplace plans; job-based plans; Medicare; and Medicaid & CHIP.

A more complete list of qualifying health coverage:

  • Any health plan brought through the Health Insurance Marketplace®
  • Most individual plans are bought outside the Marketplace, if they meet the standards for qualified health plans
  • Medicare Part A (Hospital Insurance) or Medicare Advantage Plan (Part C) (but Medicare Part B (Medical Insurance) and Medicare drug coverage (Part D) by themselves don’t count)
  • Medicaid (except limited coverage plans)
  • The Children’s Health Insurance Program (CHIP)
  • Coverage under a parent’s plan
  • Most student health plans (ask your school if the plan counts)
  • Plans sold through the Small Business Health Insurance Program (SHOP) Marketplace
  • Health coverage for Peace Corps volunteers
  • Certain types of veterans health coverage through the Department of Veterans Affairs
  • Any “grandfathered” individual insurance plan you’ve had since March 23, 2010, or earlier
  • Department of Defense Nonappropriated Fund Health Benefits Program
  • Refugee Medical Assistance
  • State high-risk pools for plan or policy years that started on or before December 31, 2014 (check with your high-risk pool plan to see if it counts as qualifying health coverage)


Qualifying life event (QLE)

A change in your situation — like getting married, having a baby, or losing health coverage — that can make you eligible for a Special Enrollment Period, allowing you to enroll in health insurance outside the yearly Open Enrollment Period.
There are 4 basic types of qualifying life events. (The following are examples, not a full list.)

  • Loss of health coverage
    • Losing existing health coverage, including job-based, individual, and student plans
    • Losing eligibility for Medicare, Medicaid, or CHIP
    • Turning 26 and losing coverage through a parent’s plan
  • Changes in household
    • Getting married or divorced
    • Having a baby or adopting a child
    • Death in the family
  • Changes in residence
    • Moving to a different ZIP code or county
    • A student moving to or from the place they attend school
    • A seasonal worker moving to or from the place they both live and work
    • Moving to or from a shelter or other transitional housing
  • Other qualifying events
    • Changes in your income that affect the coverage you qualify for
    • Gaining membership in a federally recognized tribe or status as an Alaska Native Claims Settlement Act (ANCSA) Corporation shareholder
    • Becoming a U.S. citizen
    • Leaving incarceration (jail or prison)
    • AmeriCorps members starting or ending their service


An estimate of the cost of insurance, based on information supplied to the insurance company by the applicant.



The retroactive cancellation of a health insurance policy. Insurance companies will sometimes retroactively cancel your entire policy if you made a mistake on your initial application when you buy an individual market 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.

Reconstructive Surgery

Surgery and follow-up treatment needed to correct or improve a part of the body because of birth defects, accidents, injuries, or medical conditions.


A written order from your primary care provider for you to see a specialist or get certain health care services. In many health maintenance organizations (HMOs), you need to get a referral before you can get health care services from anyone except your primary care provider. If you don’t get a referral first, the plan may not pay for the services.

Rehabilitation Services

Health care services that help a person keep, get back, or improve skills and functioning for daily living that have been lost or impaired because a person was sick, hurt, or disabled. These services may include physical and occupational therapy, speech-language pathology, and psychiatric rehabilitation services in a variety of inpatient and/or outpatient settings.


The restoring of a lapsed policy to full force and effect. The reinstatement may be effective after the cancellation date, creating a lapse of coverage. Some companies require evidence of insurability and payment of past due premiums plus interest. This may not be a possibility with Employee Benefits.

Retirement benefit (pension)

A payment or series of payments made to an employee after they retire from work. Generally, the amount of of their income from a pension or retirement account distribution depends on the type of pension or retirement account, how much the employer versus employee contributed to the pension or retirement account, and whether the employee is already taxed on the amounts they contributed. A qualified distribution from a designated Roth account isn’t required to be included in an employee’s income.



A type of preventive care that includes tests or exams to detect the presence of something, usually performed when you have no symptoms, signs, or prevailing medical history of a disease or condition.

Self-insured plan

Type of plan usually present in larger companies where the employer itself collects premiums from enrollees and takes on the responsibility of paying employees’ and dependents’ medical claims. These employers can contract for insurance services such as enrollment, claims processing, and provider networks with a third party administrator, or they can be self-administered.

Small Business Health Options Program (SHOP)

The Small Business Health Options Program (SHOP) helps small business owners provide medical and/or dental insurance to their employees. Some smaller employers qualify for tax credits if they enroll in SHOP insurance.
A small business can offer SHOP health and/or dental insurance to their employees if they:

  • Have between 1 and 50 full-time equivalent (FTE) employees. Note: The business must have at least one full-time equivalent employee other than owners, partners, or their family members.
  • Offer coverage to all full-time employees
  • Enroll at least 70% of the employees offered insurance (with some exceptions)
  • Small business owners can use an agent or broker to enroll in SHOP insurance, or work with their insurance company. There’s no limited enrollment period for SHOP, so they can apply, pick plans, and enroll employees any time of year.

Skilled Nursing Care

Services performed or supervised by licensed nurses in your home or in a nursing home. Skilled nursing care is not the same as “skilled care services”, which are services performed by therapists or technicians (rather than licensed nurses) in your home or in a nursing home.

Special Enrollment Period (SEP)

A time outside the yearly Open Enrollment Period when you can sign up for health insurance. You qualify for a Special Enrollment Period if you’ve had certain life events, including losing health coverage, moving, getting married, having a baby, or adopting a child, or if your household income is below a certain amount.

Depending on your Special Enrollment Period type, you may have 60 days before or 60 days following the event to enroll in a plan. You can enroll in Medicaid or the Children’s Health Insurance Program (CHIP) any time.

Job-based plans must provide a Special Enrollment Period of at least 30 days.


A provider focusing on a specific area of medicine or a group of patients to diagnose, manage, prevent, or treat certain types of symptoms and conditions.

Specialty Drug

A type of prescription drug that, in general, requires special handling or ongoing monitoring and assessment by a health care professional, or is relatively difficult to dispense. Generally, specialty drugs are the most expensive drugs on a formulary.


Total cost estimate (for health coverage)

The total amount an individual may have to pay for health plan coverage, which is estimated before you actually have the coverage and have health expenses under the coverage.

Generally, the total cost is the premium + deductible + out-of-pocket costs + any copayments/coinsurance. When individuals preview plans at, they’ll see an estimate of their total costs, but their actual expenses will likely vary.



UCR (Usual, Customary and Reasonable)

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 medical service. The UCR amount sometimes is used to determine the allowed amount.

Urgent Care

Care for an illness, injury, or condition serious enough that a reasonable person would seek care right away, but not so severe as to require emergency room care.



Value-based purchasing (VBP)

Linking provider payments to improved performance by health care providers. This form of payment holds health care providers accountable for both the cost and quality of care they provide. It attempts to reduce inappropriate care and to identify and reward the best-performing providers.

Vision coverage

A health benefit that at least partially covers vision care, like eye exams and glasses.

All plans in the Health Insurance Marketplace® include vision coverage for children. Only some plans include vision coverage for adults.



Waiting period (job-based coverage)

The time that must pass before coverage can become effective for an employee or dependent who is otherwise eligible for coverage under a job-based health plan.

Well-baby and well-child visits

Routine doctor visits for comprehensive preventive health services that occur when a baby is young and annual visits until a child reaches age 21. Services include physical exam and measurements, vision and hearing screening, and oral health risk assessments.

Wellness program

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. The program allows your employer or plan to offer you premium discounts, cash rewards, gym memberships, and other incentives to participate. Some examples of wellness programs include programs to help you stop smoking, diabetes management programs, weight loss programs, and preventative health screenings.

Worker’s compensation

An insurance plan that employers are required to have to cover employees who get sick or injured on the job.










Original Sources include but are not limited to the following: