actuary - a mathematician in the insurance field. Responsible for calculating premiums, developing plans and defining underwriting risk.

agent - a licensed individual who represents several insurance companies and sells their products.

benefit - reimbursement for covered medical expenses as specified by the plan.

brand-name drug - prescription drug which is marketed with a specific brand name by the company that manufactures it. May cost insured individuals a higher co-pay than generic drugs on some health plans. (see "generic.")

broker - a licensed insurance professional who obtains multiple quotes and plan information in the interest of his client.

carrier - insurance company or HMO insuring the health plan.

Certificate Booklet - the plan agreement. A printed description of the benefits and coverage provisions intended to explain the contractual arrangement between the carrier and the insured group or individual. May also be referred to as a policy booklet

claim - a formal request made by an insured person for the benefits provided by a policy.

COBRA (Consolidated Omnibus Budget Reconciliation Act) - Federal legislation that requires group health plans to provide health plan members the opportunity to purchase continued coverage in the event their insurance is terminated. Applies only to employer groups with 20 or more employees. Learn more about COBRA at the Department of Labor's website. - Please note this may take a few minutes to appear.

co-insurance - the percentage of covered expenses an insured individual shares with the carrier. (i.e., for an 80/20 plan, the health plan member's co-insurance is 20%.) If applicable, co-insurance applies after the insured pays the deductible and is only required up to the plan's stop loss amount. (see "stop loss.")

co-pay/co-payment - the amount an insured individual must pay toward the cost of a particular benefit. For example, a plan might require a $10 co-pay for each doctor's office visit.

credit for prior coverage - any pre-existing condition waiting period met under an employer's prior (qualifying) coverage will be credited to the current plan, if any interruption of coverage between the new and prior plans meets state guidelines.

deductible - the dollar amount an insured individual must pay for covered expenses during a calendar year before the plan begins paying co-insurance benefits.

dependents - usually the spouse and unmarried children (adopted, step or natural) of an employee.

effective date - the date requested by an employer for insurance coverage to begin.

exclusions - expenses which are not covered under an insurance plan. These are listed in the Certificate Booklet.

Explanation of Benefits (EOB) - a carrier's written response to a claim for benefits. Sometimes accompanied by a benefits check.

Generic drug ­ the chemical equivalent to a "brand name drug." These drugs cost less, and the savings is passed onto health plan members in the form of a lower co-pay.

group insurance - an insurance contract made with an employer or other entity that covers individuals in the group.

Health Maintenance Organization (HMO) - An alternative to commercial insurance that stresses preventive care, early diagnosis and treatment on an outpatient basis. HMOs are licensed by the state to provide care for enrollees by contracting with specific health care providers to provide specified benefits. Many HMOs require enrollees to see a particular primary care physician (PCP) who will refer them to a specialist if deemed necessary.

HIPAA - Health Insurance Portability and Accountability Act of 1996, P.L. 104-91. This law relates to underwriting, pre-existing limitations, guaranteed renewal, COBRA and certification requirements in the event someone terminates from the plan. The new law, commonly known as the "Kennedy-Kassebaum Bill," establishes new requirements for self-funded, fully-insured group plans (including church plans) and Individual Health policies. The purpose of the law is to:

• Improve portability and continuity of health insurance coverage in the group and individual markets
• To combat waste, fraud and abuse in health insurance and health care delivery
• To promote the use of medical savings accounts
• To improve access to long-term care services and coverage
• To simplify the administration of health insurance
• Learn more about HIPAA at the Department of Labor's website. - Please note this may take a few minutes to appear.

pre-certification - an insurance company requirement that an insured obtain pre-approval before being admitted to a hospital or receiving certain kinds of treatment.

ID card/identification card - card given to insured individuals which advises medical providers that a patient is covered by a particular health insurance plan.

indemnity insurance plans - traditional insurance plans (not HMOs or PPOs) which permit insured individuals to choose their doctors and hospitals. Insured individuals do not have to choose doctors or hospitals from a specific list of providers. Also called "fee-for-service" plans.

in-network - describes a provider or health care facility which is part of a health plan's network. When applicable, insured individuals usually pay less when using an in-network provider.

lifetime maximum benefit - the maximum amount a health plan will pay in benefits to an insured individual.

limitations - a restriction on the amount of benefits paid out for a particular covered expense.

long-term disability (LTD) - insurance which pays employees a percentage of monthly earnings in the event of disability.

managed care - the coordination of health care services in the attempt to produce high quality health care for the lowest possible cost. Examples are the use of primary care physicians as gatekeepers in HMO plans and pre-certification of care.

Multiple Employer Trust (MET) - an arrangement created to obtain health and other benefits for participating employer groups. Small employers can pool their contributions to receive the advantages of large group underwriting.

network - a group of doctors, hospitals and other providers contracted to provide services to insured individuals for less than their usual fees. Provider networks can cover large geographic markets and/or a wide range of health care services. If a health plan uses a preferred provider network, insured individuals typically pay less for using a network provider.

out-of-network - describes a provider or health care facility which is not part of a health plan's network. Insured individuals usually pay more when using an out-of-network provider, if the plan uses a network.

out-of-pocket maximum - the total of an insured individual's co-insurance payments and co-payments.

plan administration - overseeing the details and routine activities of installing and running a health plan, such as answering questions, enrolling new individuals for coverage, billing and collecting premiums, etc.

point-of-service (POS) - health plan which allows the enrollee to choose HMO, PPO or indemnity coverage at the point of service (time the services are received).

pre-certification - Pre-admission review and approval of appropriateness and medical necessity of hospitalization or other medical treatment.

pre-existing condition - an illness, injury or condition for which the insured individual received medical advice, treatment, services or supplies; had diagnostic tests done or recommended; had medicines prescribed or recommended; or had symptoms of typically within 12 months (time periods may vary depending on state laws) prior to the effective date of insurance coverage.

Preferred Provider Organization (PPO) - A network or panel of physicians and hospitals that agrees to discount its normal fees in exchange for a high volume of patients. The insured individual can choose from among the physicians on the panel.

premiums - payments to an insurance company providing coverage.

provider - any person or entity providing health care services, including hospitals, physicians, home health agencies and nursing homes. Usually licensed by the state.

referral ­ within many managed care plans, transfer to specialty physician or specialty care by a primary care physician.

rider - a modification to a Certificate of Insurance regarding clauses and provisions of a policy. A rider usually adds or excludes coverage.

risk - uncertainty of financial loss.

short-term medical - temporary health coverage for an individual for a short period of time, usually from 30 days to six months.

small employer group - groups with 1 ­ 99 employees. The definition of small employer group may vary between states.

state mandated benefits - state laws requiring that commercial health insurance plans include specific benefits.

stop-loss - the dollar amount of claims filed for eligible expenses at which the insurance begins to pay at 100% per insured individual. Stop-loss is reached when an insured individual has paid the deductible and reached the out-of-pocket maximum amount of co-insurance.

Third Party Administrator (TPA) - An organization responsible for marketing and administering small group and individual health plans. This includes collecting premiums, paying claims, providing administrative services and promoting products.

underwriter - entity that assumes responsibility for the risk, issues insurance policies and receives premiums.

waiver of coverage - a section on the enrollment form which states that an employee was offered insurance coverage but opted to waive this coverage.

Worker's Compensation Insurance - insurance coverage for work-related illness and injury. All states require employers to carry this insurance.