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Health Insurance Glossary of Terms
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- Accident
- An unexpected event which occurs without the patient's intent of injury, involving some
unusual outside force or object. An Accident does not include an injury or illness which
is intentionally self-inflicted or results from: (1) a fight in which the patient is
intentionally involved; (2) a family quarrel: (3) an act of war; (4) disease or mental
disorder; (5) medical, dental or surgical treatment.
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- Agent
- An individual who represents an insurance company and can typically bind coverage.
- Annuities
- Periodic payments made over a period of time or the "systematic liquidation of an
estate".
- Beneficiary
- The person, organization or trust that will receive the benefits payable upon death of a
life policy.
- Binder
- A temporary insurance policy which ceases once the policy is written.
- Blue Cross
- Provides coverage for hospital benefits. Under such a plan, the insured is billed only
for services not covered by the particular plan, while the member hospital providing the
service is paid directly by Blue Cross.
- Blue Shield
- Provides coverage for physicians expenses, including surgical expenses. Blue Shield pays
its benefits either to the hospital or directly to the physician. Charges are typically
made on a "usual, customary and reasonable basis (UCR)".
- Broker
- An individual who represents himself or represents a client when the client attempts to
purchase insurance.
- Calendar Year
- Means the period of time that begins on January first of each year and ends on December
thirty-first of the same year.
- Carrier
- Another name for and insurance company. The entity to which risk is transferred by an
insurance policy.
- Coinsurance
- After a deductible is paid, a certain percentage of the costs incurred are paid by the
policyowner and the rest by the insurance company (often 20% / 80%).
- Contributory
- Means coverage for which an eligible employee must enroll and make any necessary cost
contribution.
- Covered Expense
- Includes only charges for services described, which are Medically Necessary and for
which you are eligible up to any limits under your Plan. In the case of a Participating
Provider, Covered Expense will be the negotiated fee. In the case of a non-Participating
Provider, Covered Expense will be limited to the Usual, Customary & Reasonable fee.
- Custodial Care
- Care provided primarily to meet the personal needs of the Participant. This includes
help in walking, bathing, dressing, preparing food or special diets, feeding,
administration of medicine which is usually self-administered or any other care which does
not require continuing services of medical personnel.
- Deductible
- A fixed dollar amount for which the policyowner is responsible for before benefits are
paid.
- Disability
- Any illness or injury resulting from the same cause or related causes, including
complications. Unrelated illnesses which are being treated concurrently by one Physician
shall be considered one Disability. The time period for a Disability shall be: (1) for an
active employee a Disability shall begin on the day the condition is first diagnosed or
treated, or the Accident occurs, and shall end when the employee returns to work for one
full day, or remains treatment free for six consecutive months; (2) for a dependent or
eligible Retiree, a Disability will begin on the day the condition is first diagnosed or
treated, or the Accident occurs, and shall end when the person remains treatment free for
six consecutive months.
- Disability Insurance
- Replaces an insured's earned income during a period in which he is disabled due to
accident or illness.
- Earnings
- An eligible employee’s salary or wages, commissions or bonuses; excluding overtime
pay or additional compensation.
- Emergency
- A time when you or your dependent need immediate medical attention because a delay in
the treatment would result in your or your dependent's death, serious Disability or
significant jeopardy to your or your dependent's condition.
- Endowments
- A policy which provides for the payment of the face amount upon death of an insured
during a specified period or at the end of the policy period, which comes first.
- Free Look
- When the policyowner receives a policy he has 10 to 20 days (depending on the state) to
review the policy. During this period he can return the policy for a full refund of the
premium.
- Grace Period
- The amount of time following the date the premium is due, during which the policy
remains in effect, even though the premium has not been paid.
- Group Life
- Guaranteed Insurability
- Gives the policyowner the option to purchase specified additional amounts of insurance
without showing evidence of insurability.
- Guaranteed Renewable
- Guarantees the insured the right to renew the policy up to a specified age as long as
the premium is paid. Carrier may reserve the right to increase premiums on a class basis.
- Health Maintenance Organization (HMO)
- Offers comprehensive health benefits for members who are enrolled on a group basis and
who pay a fixed premium in advance for services provided by participating physicians and
hospitals.
- Hospital
- Any Provider which meets all the following requirements: (1) maintains permanent
facilities for care of resident patients; (2) has a licensed Physician on duty; (3) has a
facility for major surgery; (4) provides 24 hours a day nursing by registered graduate
nurses; (5) operates lawfully in the area which it is located and is Joint Commission of
Hospitals accredited; (6) primarily provides diagnostic and therapeutic medical care on a
basis other than a rest home, nursing home, convalescent hospital, home for the aged, or
treatment of alcoholism or drug addiction.
- Insurable Interest
- A condition where an individual or entity may suffer economic loss. Insurable interest
must exist at the time of loss for a Property & Casualty policy to be valid or at time
of application for a Life and Health policy to be valid.
- Insured
- The individual covered by an insurance policy.
- Long Term Care
- A health policy designed to provide benefits for necessary care for at least one year
after an elimination period.
- Major Medical
- Policy which covers medical procedures and which typically has a high maximum limit,
blanket coverage, coinsurance and a deductible.
- Medically Necessary
- The benefits of a Plan are provided only for services that are Medically Necessary as
determined by Pinnacle. The services must be ordered by the attending Physician for the
direct care and treatment of a covered illness, injury or condition. The services must be
standard medical practice where received for the illness, injury or condition being
treated and must be legal in the United States.
- Mental Illness
- A nervous condition, psychosis or neurosis.
- Non Cancelable
- Guarantees the insured the right to renew the policy up to a specified age as long as
the premium is paid.
- Ordinary Life
- An ordinary, or straight life insurance, contract is one of the major types of life
insurance policies. Such contracts are based on the level premium concept where the
assumption is that the premiums will be paid by the policyowner throughout the insured's
lifetime.
- Participant
- A participant is the Employee of the Employer or his or her eligible dependent.
- Participating Provider
- Any Provider who has an agreement with the Plan to accept a negotiated fee rate.
- Physician
- A Provider, who is not a member of your immediate family or your eligible Spouse's
immediate family, who is practicing within the scope of his or her license as a Doctor of
Medicine or Osteopathy; or, to the extent that specific benefits are provided, a Doctor of
Dentistry, Podiatry, Optometry, or Chiropractic. A licensed Optician or Psychologist is
included if performing services that are covered by the Plan.
- Plan
- The Plan is the description of benefits and limitations contained within this document.
- Policy
- A contract between an insurance carrier and policyowner.
- Policyowner
- The individual who pays the premium and has other rights under the contract. The
policyowner can also be the insured.
- Preadmission Hospital Certification
- The authorization for inpatient hospitalization stays by the Utilization Review Center
prior to admission.
- Pre-Existing Condition
- A health condition which manifested itself before the policy period.
- Preferred Provider Organiztion (PPO)
- Similar to HMOs, but physicians are paid on a fee for services basis, and insureds are
not required to use member physicians (but there are financial incentives in doing so.)
- Premium
- Primary Care Physicians
- A Physician who is designated to practice medicine in the following areas: General
Practitioners, Family Practitioners, Internists, Obstetricians, Gynecologists and
Pediatricians.
- Professional Liability
- Provider
- Any individual or organization, licensed by the state or appropriate governing body,
which dispenses, supplies or performs the necessary care and treatment for an injury or
sickness within the scope of its required licensing.
- Reinstatement
- Riders
- Additions to insurance policies.
- Short Term Disability
- Single-Premium Life
- A contract for which a single premium is paid at the inception of the policy and becomes
fully paid.
- Spouse
- A Participant's Spouse is one that is under a legally valid marriage between persons of
the opposite sex. The Plan does not recognize common-law marriages as valid.
- Substance Abuse
- Means alcoholism or narcotism.
- Term Life Insurance
- Underwriting
- The process of evaluating risk, selection or rejection of the insured, pricing and
determination of contract conditions.
- Universal Life Insurance
- A combination of term insurance with a cash savings value. Allows the policyowner to
adjust the death benefit or the cash value depending upon his needs.
- Usual, Customary and Reasonable
- Charges made for Medically Necessary services or supplies essential to the care of the
patient, if they are the amount normally charged by the Provider for similar services in
the geographic area where the services or supplies were furnished, as determined by the
Plan. Pinnacle reserves the right to make this initial determination as well as any
subsequent evaluations or modifications of the Usual, Customary and Reasonable fee
standard.
- Waiver
- Whole Life Insurance (seeOrdinary Life )
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© 2001 Pinnacle Claims Management, Inc.
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