GLOSSARY OF TERMS

• 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, you could be responsible for a higher or lower percentage of the total costs of covered services for the year, depending on your actual health care needs and the terms of your insurance policy.
• Affiliated Provider
  An Affiliated Provider is a licensed corporation, partnership or individual with which HAP has contracted with to provide licensed health care services to members. Affiliated Provider is inclusive but not limited to hospitals, physicians, and ancillary providers of health care services.
• Affordable Coverage
  A term used in the health reform law to designate both the types of coverage arrangements available to individuals and the level of family income that is considered available to pay health insurance premiums. The term is used to describe an individual who lacks access to coverage below 8% of household income for the purposes of being eligible for a free choice voucher, and below 9.8% of income for purposes of allowing the purchase of a catastrophic health insurance plan. Medicaid, employer-sponsored coverage, coverage secured through health insurance Marketplaces and the Children’s Health Insurance Program (CHIP) are all considered forms of coverage. The health reform law also directs the HHS Secretary to conduct a stud of affordable coverage.
• Benefits
  The services your health plan covers, such as physician office visits, routine physicals, etc.
• Catastrophic Plan
  Currently, some insurers describe these plans as those that only cover certain types of expensive care like hospitalizations. Other times insurers mean plans that have a high deductible, so that your plan begins to pay only after you've first paid up to a certain amount for covered services. On the Health Insurance Marketplace the catastrophic plans will be available only to 18-to-30-year-olds.
• Coinsurance
  The percentage of covered costs for a specific service the member is financially responsible for under applicable benefit plans. Coinsurance percentages are listed in the Subscriber Contract or Group Health Insurance Policy. For example, if your Subscriber Contract or Group Health Insurance Policy states that HAP will pay 80% of allowable charges for covered services (after your deductible and/or copay have been met), the remaining 20% is your co-insurance.
• Consumer Driven Health Plan (CDHP)
  Health care funding arrangements that typically involve a Health Savings Account (HSA) or other type of spending account combined with a health insurance policy. The HSA is typically funded at least in part by the employer to pay for member claims up to an annual dollar amount. once the account is exhausted, the healthy insurance policy provides coverage for services. Such plans often also provide various value-added health care informational tools for members. The purpose of such plans is to involve the member more directly in the selection and purchase of health care services.
• Copay
  A fee paid by the member at the time of service. Typical copays are for physician office visits, emergency room or urgent care visits, and prescription drugs.
• Cost Sharing
  Specific arrangements whereby members pay for designated portions of their covered care, through plan benefit features such as copays, co-insurance and deductibles and/or through payroll deductions funding a portion of the premium costs.
• Cost Sharing Subsidies
  Subsidies aimed at reducing the out-of-pocket costs for eligible individuals and families that purchase coverage on the Marketplace.
• Deductible
  The dollar amount that a plan member must pay for eligible health expenses before HAP will begin payment for medical services. The deductible applies to each insured subscriber/member and must be met each benefit period. Deductibles typically involve annual requirements.
• DHHS
  Acronym for the Department of Health and Human Services. The Department of Health and Human Services is the U.S. government’s principal agency for protecting the health of all Americans. DHHS is responsible for implementing the parts of the Affordable Care Act that deal with private and public health insurance.
• Dual Eligible
  Low-income individuals who meet the eligibility requirements for both the Medicaid and Medicare programs.
• Emergency
  Care necessary to screen and stabilize a member in cases where a person with no medical training, acting reasonably, believes that an emergency medical condition exists.
• Employer Funded
  Employee benefits that are paid for by the employer, in the form of premium payments, health savings account funding, or other applicable items.
• Employer Penalties
  Employers with at least 50 employees that do not offer coverage and have at least one full-time employee who receives subsidized coverage in the Marketplace, will be assessed this penalty fee of $2,000 per full-time employee, excluding the first 30 employees from the assessment. Employers with at least 50 employees that offer coverage but have at least one full-time employee receiving a premium tax credit, will pay the lesser of $3,000 for each employee receiving a premium credit or $2,000 for each full-time employee, excluding the first 30 employees. In order for employers that provide coverage to be liable for a fine, the plan must have an actuarial value of less than 60% (based on the essential health benefits package) and the employee’s contribution to the plan must be at or above 9.5% of their household income.
• Essential Health Benefits
  A set of health care service categories that must be covered by certain plans, starting in 2014. The Affordable Care Act defines essential health benefits to “include at least the following general categories and the items and services covered within the categories: ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care.''
• Exchange (see also: Health Insurance Marketplace)
  A Marketplace that offers individuals a choice of health insurance plans to purchase that meet certain benefit and affordability standards. An exchange should be sponsored by each state. A federal exchange will exist to assist buyers in states that do not have a state sponsored exchange.
• Exclusive Provider Organization (EPO)
  A managed care program in which members receive care within a specific provider network. Although members must use the EPO provider network exclusively, they are not required to select a PCP. Although referrals are not required for specialty care, medical services received outside of the EPO network are not covered.
• Federal Poverty Level (FPL)
  A measure of income level issued annually by the DHHS. Federal poverty levels are used to determine eligibility for certain programs and benefits.
• Flexible Spending Account (FSA)
  An account that reimburses the participant for qualified health costs, dependent care expenses and commuter costs through one pre-tax savings account. Employees or employers or both fund the account. At the end of each year, unused dollars are forfeited by the account holder.
• Formulary
  The list of drugs chosen by HAP that is used to treat patients. All drugs on the formulary are approved by the Food and Drug Administration. Drugs outside of the formulary are only used in rare, specific circumstances. Medicare beneficiaries use a formulary that is approved by a Medicare prescription drug plan.
• Generic Drug
  A generic drug has the same active ingredients as the original brand-name drug, but it may use different inactive ingredients (such as fillers) that may affect the color or shape of the drug. In other respects, the drug is clinically identical. Generic drugs usually cost 30 to 60 percent less than the corresponding brand-name drugs, and are rated by the Food and Drug Administration (FDA) to be as safe and effective as brand-name drugs.
• Grandfathered Health Plan
  As used in connection with the Affordable Care Act: A group health plan that was created – or an individual health insurance policy that was purchased – on or before March 23, 2010. Grandfathered plans are exempted from many changes required under the Affordable Care Act. Plans or policies may lose their “grandfathered” status if they make certain significant changes that reduce benefits or increase costs to consumers. A health plan must disclose in its plan materials whether it considers itself to be a grandfathered plan and must also advise consumers how to contact the U.S. Department of Labor or the DHHS with questions.
• Health Insurance Marketplace
  A new transparent and competitive insurance Marketplace where individuals, families and small businesses can shop for plans that provide minimum essential coverage.
• Health Insurance Premiums
  The monthly fee paid for health insurance coverage for the duration of a defined benefit period.
• Health Reimbursement Arrangement (HRA)
  An arrangement that can be offered in conjunction with a high-deductible health plan and is funded by the employer for each participating employee. An HRA pays for eligible health care expenses typically covered under the medical plan. Unused funds can be carried over to the next year to cover future health care expenses, an incentive for employees to use their personal HRA wisely. If funds are exhausted, the employee is responsible for satisfying the remaining deductible before the plan begins to pay. If the employee terminates employment, the money stays with the employer.
• Health Savings Account (HSA)
  A funding mechanism in which the participant pays for health costs through a fully insured, tax-exempt savings account. Employees or employers or both fund the account. An HSA is subject to regulations mandated by the federal government that limit coverage to IRS section 213(d) medical coverage. All unused amounts carry-over indefinitely during a participant's lifetime.
• Hold Harmless
  A provider contract stipulation that prevents a HAP HMO member from being billed for charges incurred for services received from an affiliated provider due to circumstances beyond their control.
• HMO (Health Maintenance Organization)
  A form of health coverage that emphasizes preventive care. With an HMO, members prepay a premium for health services, which generally includes inpatient and outpatient care. For the member, it means reduced out-of-pocket costs and no paperwork.
• Household Income
  The sum of the modified adjusted gross income (MAGI) of the taxpayer and each member of the taxpayer’s family that is a dependent and is required to file a return.
• Individual Responsibility
  Under the Affordable Care Act, starting in 2014, you must be enrolled in a health insurance plan that meets basic minimum standards. If you aren't, you may be required to pay an assessment. You won't have to pay an assessment if you have very low income and coverage is unaffordable to you, or for other reasons including your religious beliefs. You can also apply for a waiver asking not to pay an assessment if you don't qualify automatically.
• Integrated Delivery System
  In the HMO option using the Integrated Delivery System, your Personal Care Physician (PCP) coordinates your care and make arrangements for you, as necessary, to see other physicians and hospitals that are affiliated with his or her group practice.
• Lifetime Maximum
  A dollar or service limit imposed under a plan of benefits for a specific benefit or for the entire policy that total cumulative payments or covered services by HAP cannot exceed, over the entire time the policy is in force.
• Maximum Allowable Charge
  The maximum amount HAP will pay for a covered service under the terms of the policy.
• Medicaid
  A state-administered health insurance program for low-income families and children, pregnant women, the elderly, people with disabilities and, in some states, other adults. The federal government provides a portion of the funding for Medicaid and sets guidelines for the program. States also have choices in how they design their program, so Medicaid will vary from state to state.
• Medical Center
  Made up of many physicians – both personal care physicians and specialists – all under one roof. Most medical centers offer other services, such as laboratory, x-ray and optical, within the same building.
• Medical Loss Ratio Requirements
  Health plans must spend a minimum amount of premium revenue on medical claims and activities to improve health care quality.
• Minimum Essential Coverage
  The type of coverage an individual needs to have in order to meet the individual responsibility requirement under the Affordable Care Act. This includes individual market policies, job-based coverage, Medicare, Medicaid, CHIP, TRICARE and certain other coverage. The penalty for not having minimum essential coverage will be phased-in according to the following schedule: $95 in 2014, $325 in 2015, and $695 in 2016 for the flat fee or 1% of taxable income in 2014, 2% of taxable income in 2015, and 2.5% of taxable income in 2016.
• Minimum Value
  For an employer-sponsored plan to qualify as minimum essential coverage it must provide minimum value. Generally, a plan provides minimum value if the plan covers at least 60% of the total cost of benefits covered under the plan.
• Navigators
  Experienced and knowledgeable individuals (who may not work for insurers or be paid by insurers for plan enrollments) to assist individuals and small employers evaluate their insurance options within the insurance exchanges that will go online in 2014.
• NCQA (National Committee for Quality Assurance)
  An independent, nonprofit organization, that leads the effort to assess, measure and report on the quality of care provided by the nation's managed care organizations. Its mission is to provide purchasers and consumers with an unprecedented ability to evaluate the quality of different health plans and to make their enrollment decisions based on demonstrated value rather than simply on cost.
• Non-Affiliated Provider
  A medical partnership or individual physician that does not have a contract with HAP.
• Open Delivery System
  In the HMO using the Open Delivery System your Personal Care Physician (PCP) coordinates your care, but you may seek needed care from any HAP contracted specialist, and you may use any HAP contracted hospital.
• Out-of-Pocket Costs
  Your expenses for medical care that aren't reimbursed by insurance. Out-of-pocket costs include deductibles, coinsurance, and copayments for covered services plus all costs for services that aren't covered.
• Out-of-Pocket Limit
  The most you pay for covered services during a benefit period (usually a calendar year) before HAP begins to pay 100 percent of the allowed amount. All copays, coinsurance and deductible amounts count toward your out-of-pocket limit. The out-of-pocket limit never includes your monthly premium or non-covered services.
• Personal Care Physician (PCP)
  An affiliated physician who has agreed to coordinate the medical care of HAP members. A personal care physician may practice in the area of family practice, internal medicine or pediatrics.
• PCP directed care
  A preauthorization from a PCP, according to HAP's policies, for the delivery of a defined specialty service or consultation that is a covered benefit for a member.
• Physician's Hospital Affiliation
  A term used by HAP to describe providers grouped together to serve members. A physician's hospital affiliation is usually comprised of physicians working in private offices. It may also include a hospital (or hospitals) linked to those physician groups. The PCP you choose will coordinate your medical care and direct you to specialists, normally within the same hospital affiliation.
• Plan Design
  The specifications for a given plan of benefits, including the applicable cost sharing requirements that apply, as well as the list of covered benefits, exclusions and limitations.
• Patient Protection and Affordable Care Act (PPACA)
  The comprehensive health care reform law enacted in March 2010.The law was enacted in two parts: The Patient Protection and Affordable Care Act was signed into law on March 23, 2010, and was amended by the Health Care and Education Reconciliation Act on March 30, 2010. The name “Affordable Care Act” is used to refer to the final, amended version of the law.
• Preferred Provider Organization (PPO)
  Members do not have a PCP. Members can self-refer, and receive a higher level of benefits when they receive care from participating providers, and a lower level of benefits when they receive care from non-participating providers.
• Premium
  A premium is the total amount charged the policyholder for coverage. For example, an employer providing a group health plan to its employees is charged a certain amount per covered employee-this is the premium rate. That rate is multiplied by the number of covered employees to obtain the total amount the employer pays for coverage.
• Premium Assistance
  Subsidies available to eligible individuals and families that purchase coverage on the Marketplace. The subsidies will be set on a sliding scale such that the premium contributions are limited to the following percentages of income for specified income levels:
  

  • Up to 133% FPL: 2% income
  • 133 - 150% FPL: 3%-4% of income
  • 150 - 200% FPL: 4%-6.3% of income
  • 200 - 250% FPL: 6.3%-8.05% of income
  • 250 - 300% FPL: 8.05%-9.5% of income
  • 300 - 400% FPL: 9.5% of income
• Preventive Care
  Health care services intended to prevent a medical condition from occurring, or to detect the onset of a condition early so that it can be more effectively treated. Preventive care includes regular medical check-ups, screening tests, vaccinations, and the encouragement of a healthy lifestyle.
• Prior Authorization
  To be sure certain drugs or medical services are used correctly and only when truly necessary, your plan may require a "prior authorization." This means you or your physician need to get approval from your plan before a particular drug or service will be covered.
• Private Exchange
  A Health Insurance Marketplace run by a private sector company or industry or non-Profit organization.
• Refundable Credit
  A tax credit is an amount that can be subtracted from the amount of income tax owed on a tax return. If a tax credit is refundable, the taxpayer can receive a refund if the credit amount exceeds the amount of income tax owed. Thus, a taxpayer with a $2,000 tax liability would receive a tax refund of $2,000 if they were eligible for a $4,000 refundable credit.
• SHOP Exchange
  Small Business Health Option Program or SHOP. The state-based insurance exchanges created by the health reform law through which small employers will be able to purchase health insurance for their employees starting in 2014.
• Step Therapy
  A type of prior authorization for some prescription medications. With step therapy, in most cases, you must first try using certain less expensive drugs that have been proven effective for most people with your condition before you can get a similar, more expensive brand-name drug covered.
• Subsidy/Advanced Premium Tax Credit
  The amount of the monthly premium the government pays to help the taxpayer purchase health insurance. The subsidy is sometimes referred to as the premium tax credit (PTC) or premium assistance and the amount is determined on a sliding scale based on income.
• Tiers
  To lower costs, a plan places prescription drugs in its formulary into different "tiers." Your drug copay will vary, depending on the tier. For example, one approach to tiers is the following:
  
  
  • Tier 1: Generic drugs
  • Tier 2: Preferred brand drugs
  • Tier 3: Non-preferred brand drugs
  • Tier 4: Specialty drugs
• Qualified Health Plan (QHP)
  An insurance plan that is certified for the Health Insurance Marketplace, provides essential health benefits, follows established limits on cost sharing and meets other requirements established by the Marketplace in which it is offered.
• Tax Deduction
  An amount subtracted from adjusted gross income on a tax return reducing tax liability.
• Tax Penalty
  An additional tax assessed on individuals who fail to maintain minimum essential coverage and are not eligible for an exemption to the requirement. The penalty will be determined monthly, but generally will not apply if the individual was without health care for less than 90 days. The penalty is paid on the individual’s tax return. The penalty is also sometimes referred to as a shared responsibility penalty.
• 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 employers or plans to offer premium discounts, cash rewards, gym memberships, and other incentives to participants. Some examples of wellness programs include programs to help individuals stop smoking, provides diabetes management programs, weight loss programs, and preventative health screenings.
• Urgent Care
  An urgent medical condition that is not life threatening, but may require prompt attention. Sprained ankles, most burns, and minor wounds requiring stitches are typical examples of urgent conditions.