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Common Health Insurance Terms
Affiliation Periods - The time an HMO may require you to wait after you enroll and before your coverage begins. HMOs that impose an affiliation period cannot exclude coverage of pre-existing conditions. Premiums cannot be charged during HMO affiliation periods. Massachusetts does not permit HMOs to impose affiliation periods but other states may. Alternative Trade Adjustment Assistance (ATAA) - ATAA is a benefit for workers at least 50 years old who have obtained different, fulltime employment within 26 weeks of the termination of adversely-affected employment. These workers may receive 50% of the wage differential (up to $10,000) during their 2 year eligibility period. To be eligible for the ATAA program, workers may not earn more than $50,000 per year in their new employment. Also, the firm where the workers worked must meet certain eligibility criteria. Certificate of Creditable Coverage - A document provided by your health plan that lets you prove you had coverage under that plan. Certificates of creditable coverage will usually be provided automatically when you leave a health plan. You can obtain certificates at other times as well. See also Creditable Coverage. Children’s Medical Security Plan - Massachusetts’s Children’s Medical Security Plan provides insurance for children under the age of 19 who are not eligible for MassHealth and who have limited or no health insurance. COBRA - Stands for the Consolidated Omnibus Budget Reconciliation Act, a federal law in effect since 1986. COBRA permits you and your dependents to continue in your employer’s group health plan after your job ends. If your employer has 20 or more employees, you may be eligible for COBRA continuation coverage when you retire, quit, are fired, or work reduced hours. Continuation coverage also extends to surviving, divorced or separated spouses; dependent children; and children who lose their dependent status under their parent’s plan rules. You may choose to continue in the group health plan for a limited time and pay the full premium (including the share your employer used to pay on your behalf). COBRA continuation coverage generally lasts 18 months, or 36 months for dependents in certain circumstances. See also State Continuation Coverage. Co-Insurance - The co-insurance clause requires you to pay a percentage (or a fixed dollar amount) of your covered medical expenses. The percentage is usually expressed as "80/20" co-insurance. This means after you have paid the deductible amount (if any) as stated in your policy, you will pay 20% of the medical bills and the insurance company will pay the remaining 80% of the covered medical expenses. When your total expenses reach a dollar amount stated in your policy, the insurance company pays 100% of the covered expenses up to the maximum benefit of your policy (from $2000 to $50,000.) Continuous Coverage - If you are joining a self-insured group health plan or if you want to be HIPAA eligible, health insurance coverage is continuous if it is not interrupted by a break of 63 or more consecutive days. Employer waiting periods and HMO affiliation periods do not count as gaps in health insurance coverage for the purpose of determining if coverage is continuous. See also Creditable Coverage, HIPAA Eligible, Fully Insured Group Health Plan, Individual Health Insurance, Self-Insured Group Health Plan. Creditable Coverage - Health insurance coverage under any of the following: a group health plan; individual health insurance; Medicare; MassHealth; CHAMPUS and TRICARE (health coverage for military personnel, retirees, and dependents); the Federal Employees Health Benefits Program; Indian Health Service; the Peace Corps; or a state health insurance high risk pool. See also Continuous Coverage, Group Health Plan, Individual Health Insurance. Deductible - The amount you pay before the insurance company pays anything. There are two types of deductibles: an annual deductible and a per occurrence deductible. Under an annual deductible, you pay all expenses up to the amount of the deductible. Once you have paid the deductible during the policy year, the insurance company will pay for covered medical expenses for the rest of the policy year in accordance with the terms of the policy. Under a per occurrence deductible, you must pay the deductible amount for each separate sickness or injury. If you have five claims in one year, you would have to pay the deductible five times. Elimination Rider - An amendment permitted in health plan contracts in some states that permanently excludes your coverage for a health condition, body part, or body system. Elimination riders are not permitted in Massachusetts. Enrollment Period - The period during which all employees and their dependents can sign up for coverage under an employer group health plan. Besides permitting workers to elect health benefits when first hired, many employers and group health insurers hold an annual enrollment period, during which all employees can enroll in or change their health coverage. See also Group Health Plan, Special Enrollment Period. Exclusions - Types of injuries or illnesses that are not covered. The most common types of exclusions are pre-existing conditions, self-inflicted injuries, and injuries incurred while committing a criminal act. Injuries resulting from some specific activities may also be excluded. For example, if you plan to drive a car or snow ski, these activities may be excluded. Never assume you will always be covered. Check the exclusions before you purchase insurance. Family and Medical Leave Act (FMLA) - A federal law that guarantees up to 12 weeks of job-protected leave for certain employees when they need to take time off due to serious illness, to have or adopt a child, or to care for another family member. When you qualify for leave under FMLA, you can continue coverage under your group health plan. Fully Insured Group Health Plan - Health insurance purchased by an employer from an insurance company. Fully insured health plans are regulated by Massachusetts. See also Self-Insured Group Health Plans. Genetic Information - Includes information about family history or genetic test results indicating your risk of developing a health condition. A health plan cannot consider pre-existing (and therefore exclude coverage for) a condition about which you have genetic information, unless that health condition has been diagnosed by a health professional. Group Health Plan - Health insurance (usually sponsored by an employer, union or professional association) that covers 1 or more employees and includes the self-employed. See also Fully Insured Group Health Plan, Self-Insured Group Health Plan. Guaranteed Issue - A requirement that health plans must permit you to enroll regardless of your health status, age, gender, or other factors that might predict your use of health services. All health plans sold to individuals and small employers with 1 to 50 employees in Massachusetts are guaranteed issue. Plans that are guaranteed issue can turn you away for other reasons. Guaranteed Renewability - A feature in health plans that means your coverage cannot be canceled because you get sick. HIPAA requires all health plans to be guaranteed renewable. The precise definition of guaranteed renewable may vary based on what type of insurance you have. Your coverage can be canceled for other reasons unrelated to your health status. Health Coverage Tax Credit (HCTC) - The Health Coverage Tax Credit (HCTC) is a program that can help pay for nearly two-thirds of eligible individuals’ health plan premiums. In general, in order to be eligible for the health coverage tax credit, you must be 1) receiving Trade Readjustment Allowance benefits (TRA), or 2) will receive TRA benefits once your unemployment benefits are exhausted, or 3) receiving benefits under the Alternative Trade Adjustment Assistance (ATAA) program, or 4) aged 55 or older and receiving benefits from the Pension Benefit Guaranty Corporation (PBGC). Health Insurance or Health Plan - In this guide, the term means benefits consisting or medical care (provided directly or through insurance or reimbursement) under any hospital or medical service policy, plan contract, or HMO contract offered by a health insurance company or a group health plan. It does not mean coverage that is limited to accident or disability insurance, workers’ compensation insurance, liability insurance (including automobile insurance) for medical expenses, or coverage for on-site medical clinics. Health insurance also does not mean coverage for limited dental or vision benefits to the extent these are provided under a separate policy. Health Plan Year - The calendar period during which your health plan coverage is in effect. Many group health plan years begin on January 1, while others begin in a different month. Health Status - When used in this guide, refers to your medical condition (both physical and mental illnesses), claims experience, receipt of health care, medical history, genetic information, evidence of insurability (including conditions arising our or acts of domestic violence), and disability. See also Genetic Information. HIPAA - The Health Insurance Portability and Accountability Act, sometimes known as Kassebaum-Kennedy, after the two senators who spearheaded the bill. Passed in 1996 to help people buy and keep health insurance, even when they have serious health conditions, the law sets a national floor plan for health insurance reforms. Since states can and have modified and expanded upon these provisions, consumers’ protections vary from state to state. HIPPA Eligible - Status you attain once you have had 18 months of continuous creditable health coverage. To be HIPAA eligible, you also must have used up any COBRA or state continuation coverage; you must not be eligible for Medicare or MassHealth; you must not have other health insurance; and you must apply for individual health insurance within 63 days of losing your prior creditable coverage. No matter where you live in the U.S., if you are HIPAA eligible you must be offered at least some type of individual health insurance with no pre-existing condition periods. In Massachusetts, you do not need to meet all the requirements of federal eligibility to have this protection. See also COBRA, Continuous Coverage, Creditable Coverage, State Continuation Coverage. Health Maintenance Organization (HMO) - A kind of health insurance plan. HMOs usually limit coverage to care from doctors who work for or contract with the HMO. They generally do not require deductibles, but often do charge a small fee, called a co-payment, for services like doctor visits or prescriptions. Individual Health Insurance - Policies for people not connected to an employer group. Individual health insurance are regulated by Massachusetts. Inpatient - If you receive medical care at a hospital or clinic for at least one full day and are charged room and board, you are an inpatient. Kassebaum-Kennedy - See HIPAA. Large Group Health Plan - One with more than 50 employees. Late Enrollment - Enrollment in a health plan at a time other than the regular or a special enrollment period. If you are a late enrollee, you may be subject to a longer pre-existing condition exclusion period. See also Special Enrollment Period. Limits - The amount of medical benefits that will be paid. Policies may also have maximum limits for what will be paid for certain services. For example, the policy may state limits to what it will pay for a daily hospital room, surgical or physician fees. Look Back - The maximum length of time, immediately prior to enrolling in a health plan, that can be examined for evidence of preexisting conditions. In Massachusetts, insurers can not look back further than 6 months. See also Pre-Existing Condition. Managed Care Plans. A standardized plan individual health insurers are required to offer to all consumers. MassHealth - A program providing comprehensive health insurance coverage and other assistance to certain low-income and moderate income Massachusetts residents. There are several components to the program including MassHealth, MassHealth, CommonHealth, and MassHealth Family Assistance. All other states have similar programs, typically called Medicaid, though eligibility levels and covered benefits will vary. Medical Plan Option - A standardized plan individual health insurers are required to offer to all consumers. Modified Community Rating - A rule that prohibits health plan premiums in Massachusetts from varying premiums based on your health status. Both small group health plan and individual health insurance premiums are subject to modified community rating. Nondiscrimination - A requirement that group health plans not discriminate against you based on your health status. Your coverage under a group health plan cannot be denied or restricted, nor can you be charged a higher premium, because of your health status. Group health plans can restrict your coverage based on other factors (such as part time employment) that are unrelated to health status. See also Group Health Plan, health Status. Outpatient – If you receive medical treatment from a physician or in a hospital or clinic, but are not confined or charged room or board, you are an outpatient. Pension Benefit Guaranty Corporation (PBGC) - PBGC is a federal government corporation established by Title IV of the Employee Retirement Income Security Act of 1974 (ERISA) to encourage the continuation and maintenance of defined benefit pension plans, provide timely and uninterrupted payment of pension benefits to participants and beneficiaries in plans covered by PBGC. It currently guarantees payment of basic pension benefits earned by American workers and retirees participating in private-sector defined benefit pension plans. The agency received no funds from general tax revenues. Operations are financed largely by insurance premiums paid by companies that sponsor pension plans and by PBGC’s investment returns. Pre-existing Condition - Any condition (either physical or mental) for which medical advice, diagnosis, care, or treatment was recommended or received within the 6-month period immediately preceding enrollment in a health plan. Pregnancy cannot be counted as a pre-existing condition in group health plans. Genetic information about your likelihood of developing a disease or condition, without a diagnosis of that disease or condition, cannot be considered a pre-existing condition. Newborns, newly adopted children, and children placed for adoption are covered from moment of birth or date placed for adoption and cannot be subject to preexisting condition exclusions. Pre-existing Condition Exclusion Period - The time during which a health plan will not pay for covered care relating to a pre-existing condition. Fully insured group health plans and individual health insurance cannot exclude coverage for pre-existing conditions for more than 6 months. Self-insured group health plans cannot exclude coverage for pre-existing conditions for more than 12 months. See also Pre-existing Condition. Preferred Provider Organization (PPO) - Network of physicians, hospitals and clinics that provide services for pre-negotiated fees. When you need medical care, you can go to a PPO or a non-PPO provider. The insurance company will pay a greater portion of your medical expenses if you go to the PPO. Premium - The amount of money you will be required to pay for your insurance coverage. It is generally expressed in monthly terms. Self-Insured Group Health Plans - Plans set up by employers who set aside funds to pay their employees’ health claims. Because employers offer hire insurance companies to run these plans, they may look to you just like fully insured plans. Employers must disclose in your benefits information whether an insurer is responsible for funding, or for only administering the plan. If the insurer is only administering the plan, it is self-insured. Self-insured plans are regulated by the U.s. Department of Labor, not by Massachusetts. Small Group Health Plans - Plans with 1 to 50 employees. Special Enrollment Period - A time, triggered by certain specific events, during which you and your dependents must be permitted to sign up for coverage under a group health plan. Employers and group health insurers must make such a period available to employees and their dependents when their family status changes or when their health insurance status changes. Special enrollment periods must last at least 30 days. Enrollment in a health plan during a special enrollment period is not considered late enrollment. See also Late Enrollment. State Continuation Coverage - A program similar to COBRA. In Massachusetts, if you are in a fully insured group health plan sponsored by an employer with 2 to 19 employees and meet other requirements, you also have rights to continue your health coverage for up to 18 months when your job ends. In some cases dependents can continue coverage for up to 36 months. See also COBRA. Supplemental Security Income (SSI) - A program providing cash benefits to certain very low-income disabled and elderly individuals. When you qualify for SSI, you generally also qualify for MassHealth. In addition, MassHealth coverage often continues for a limited time if your income increases so that you no longer qualify for SSI. Temporary Assistance for Needy Families (TANF) - A program (also known as Transitional Aid to Families with Dependent Children or TAFDC) that provides cash benefits to low-income families with children. When you qualify for TANF, you generally also qualify for MassHealth. In addition, MassHealth coverage often continues for a limited time or longer if you no longer qualify for TANF. See also MassHealth. Trade Adjustment Assistance (TAA) Program - A program authorized by the Trade Adjustment Assistance Reform Act of 2002. This program provides aid to workers who lose their job or whose hours of work and wages are reduced as a result of increased imports. The TAA Program offers six benefits and reemployment services to assist unemployed workers prepare for and obtain new suitable employment. In addition, TAA offers a significant tax credit that covers 65% of health insurance premiums for certain plans. U.S. Department of Labor - A department of the federal government that regulates employer provided health benefit plans. You may need to contact the Department of Labor if you are in a self-insured group health plan, or if you have questions about COBRA or the Family and Medical Leave Act. See also COBRA, Family and Medical Leave Act. Waiting Period - The time you may be required to work for an employer before you are eligible for health benefits. Not all employers require waiting periods. Waiting periods do not count as gaps in health insurance for purposes of determining whether coverage is continuous. If your employer requires a waiting period, your pre-existing condition exclusion begins on the first day of the waiting period. Some insurers can also impose a waiting period for up to 6 months before you receive coverage for non-emergency care. See also Pre-existing Condition Exclusion Period.
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