Navigating health insurance can be confusing. The many terms and acronyms can be overwhelming. Not to mention, health insurance is expensive, so it’s important for consumers to understand exactly what is a maximum out-of-pocket (OOPM) or an explanation of benefits (EOB). We at Bond Benefits Consulting are here to help un-muddy the waters as it pertains to your health insurance. The list below includes many common terms and what they mean for you and your insurance plan.
Allowed Amount or Allowed Benefit): The maximum amount on which a carrier’s payments are based for covered services. If your non-participating provider charges more than the allowed amount, you will have to pay the difference between the allowed amount and the provider’s charge, in addition to any cost-share arrangements.
Balance Billing: Occurs when a non-participating provider bills you for the difference between the non-participating provider’s charge and the allowed amount. A participating provider may not balance bill you for covered services.
Coinsurance: The cost-share of the cost of a covered service, calculated as a percent of the allowed amount for the service that you are required to pay the provider.
Copayment: A fixed amount that a member pays directly to a provider for a covered service when they receive service. The amount can vary by the type of service.
Deductible: The portion of covered medical expenses that a member must pay before the carrier will make any benefit payments.
Aggregate Deductible: On a medical plan with two or more members covered, one member can meet the entire family deductible or it can be met by a combination of all members.Regardless of which family member(s) incur the medical expenses, the family deductible must be met before any services will be paid under the terms of the contract.
Embedded Deductible: On a medical plan with two or more members covered, this type of deductible contains two components: an individual deductible and a family deductible. Each family member can have their medical bills covered prior to meeting the entire family deductible by just meeting their individual deductible. One person cannot exceed the individual deductible amount in the family.
Drug Formulary: A list of both generic and brand-name prescription drugs used by practitioners to identify drugs with the greatest overall value. A committee of physicians, nurse practitioners, and pharmacists maintains the formulary.
Drug tier levels
Tier 1: Lowest-cost alternative
Tier 2: Preferred medication
Tier 3: Non-preferred medication
Emergency Care: Care received for a life-threatening illness or injury requiring immediate medical attention.
Explanation of Benefits (EOB): A notification sent to the member that provides information on a processed claim.
In-network: A provider, hospital, pharmacy, or other facility that has entered a contractual relationship with a health plan to be a part of the health plan’s network of participating providers.
Non-Participating Provider: A person, entity, or institution that has NOT entered into a contractual agreement with a health plan to provide covered services.
Out-of-Network: A provider, hospital, pharmacy, or other facility that has NOT entered a contractual relationship with the health plan to be part of the health plan’s network.
Out-of-Pocket Maximum (OOPM): The most you will have to pay in any given plan year for all covered services received under a health insurance policy, including copayments, coinsurance, and deductibles. After a member reaches the individual (Embedded) or family (Aggregate) out-of-pocket maximum amount, the health insurance carrier will pay all other covered expenses for the remainder of the plan year.
Participating Provider: A person, entity, or institution that has entered into a contractual agreement with the health plan to provide covered services. A provider’s participation status may change; it is best to confirm when scheduling an appointment.
Pharmacy Network: A group of pharmacies that has contracted with a health plan or pharmacy benefit manager (PBM, e.g. Express Scripts, OptumRx, CVS/Caremark etc.) to provide covered products and services to members.
Pre-Authorization: A decision by a health plan that a covered service, procedure, treatment plan, device, or prescription drug is medically necessary, prior to a member’s receipt of that service.
Primary Care Physician (PCP): A participating provider who is responsible for coordinating a member’s medical care. PCPs practice in family medicine, internal medicine, pediatrics, general practice, or obstetrics/gynecology. Your PCP is responsible for knowing your complete medical history, performing routine health care duties, and referring a member to a specialist when necessary.
Service Area: The geographic area where the plan accepts members and has contracted with providers for members to use.
Specialist: A doctor who focuses on a specific area of medicine or a group of patients to diagnose, manage, prevent, and/or treat certain types of symptoms and conditions.
Urgent Care: Care received for an illness or injury with symptoms of sudden or recent onset requiring same-day medical attention.
For questions or help navigating your plan, feel free to reach out to us at info@bondbenefits.com or give us a call at 585-248-5870.