Commonly Used TermsHealth Insurance FAQLife Insurance FAQ
The amount you must pay before the insurance carrier starts payment. Even after you reach the deductible, you still are responsible for your portion of the coinsurance not paid by the insurance carrier. Could be any amount, usually between 40-100%.
The amount you pay when visiting doctors or having services performed.
The percentage paid for AFTER you have met the deductible. Can refer to the percentage you pay or the percentage the insurance carrier pays.
Max out of pocket (MOOP)
The limit on how much you pay in a calendar or plan year for medical services. Does not include the premium amount.
Balance Billing
When you receive a statement from a provider that claims you owe additional funds after your copay and insurance carrier have paid. If you receive a statement from your provider verify with your insurance carrier if you need to pay the amount due.
Summary of Benefits and Coverage (SBC)
The multiple page summary description of your insurance plan. This is a quick reference. You can find out a lot including a telephone number to the insurer.
Provider Network
All the doctors, specialists, hospitals, clinics, drug stores, and medical providers who have agreed to accept the rates negotiated by the insurance company. Each insurance provider has their own network of providers. Be sure to check for changes to your network when you change insurance carriers.
Health Maintenance Organization (HMO)
There are NO out of network benefits, ONLY IN-Network benefits. Narrow Network and Primary Care doctor must refer you to specialists. Usually lower premium because of less choice in the network.
Exclusive Provider Organization (EPO)
Very similar to HMO. You can go to anyone in their network for the usual copays and/or coinsurance. Usually lower premium because of less choice in the network.
Preferred Provider (PPO)
Broad network usually available with nationwide coverage. Traditionally accepted plans with a large choice of in and out of network providers. Usually have less benefits available with an out of network provider, but benefits are still available.
High Deductible Health Plan (HDHP)
The IRS sets minimum and maximum limits on these plans, because of the high deductible participants can have a pre-tax savings account if they want. Participants/Enrollees in an HDHP can have money deducted from their paycheck pre-tax and then save the funds in a Health Savings Account to help cover their costs when they use services.
Guarantee Issue (GI)
Guarantee Issue means the insurance carrier has to issue the policy, regardless of your health. The policy may not cover pre-existing conditions for a period of time.
Voluntary/Worksite Benefits
Usually employee paid benefits that are payroll deducted. Plans usually reimburse participant for costs incurred in health plans, such as copays, deductibles, and coinsurance amounts. Can be pre-tax or post-tax arrangements. Policies may include accident, medical bridge, cancer, critical illness, or intensive care or specified illness.
Pre-existing Conditions also Pre-X
The insurance carrier has the right to say they will not cover expenses associated with a condition you already have and have had treatment for. Pre-existing conditions will usually be covered after a certain length of time. Plans covered under Affordable Care Act do not have a pre-existing limitation.
Generic Drugs
Technically named “no label” drugs. Produced after the patents run out, costs are much less expensive. Ask your doctor to prescribe generics if the effect will be the same.
Preferred Brand Name
Preferred Brands are those named drugs manufactured that have a preferred contracted rate with an insurance carrier.
Non Preferred Brand Name
Non Preferred Brands are those named drugs manufactured that do not contract with an insurance carrier and are usually very expensive with little if any insurance discount.
Specialty Drugs
Very expensive drugs that have limited markets. Insurance carriers usually have specific limits and limited quantity on these drugs.
Pre Approval
The prescribing doctor must provide additional information to the insurance carrier before the prescription will be filled.
Step Therapy
A process insurance carriers use to ensure that the doctor has tried other medications before prescribing a stronger or more potent dose.
Health Savings Account (HSA)
This is a pre-tax account that a participant in a high deductible health plan can open. The participant has money deducted from his paycheck pre-tax and deposited into this account. These funds are then used to pay for medical, dental, and vision expenses the participant incurs when they need services. Funds are able to be carried from one year to the next. There is a limit on the amount a participant can contribute each year but not a limit on the balance of the account.
Flex Saving Account (FSA)
Flexible Savings Accounts can be used for medical, dependent care and in some areas transportation expenses. Participants contribute with pre-tax money from their paycheck to use for the appropriate type of account. Use it or lose it rules apply to these accounts.
Pre-Tax Savings
A participant can have deductions for certain types of benefits made before the calculation of payroll taxes. This process allows for both the employee and employer to save on taxes. This is legitimate savings based on IRS guidelines and proper documentation.
Primary Care Provider (PCP)
A provider that is your primary care physician, can be a Internist, Family Practice, Pediatrician, General Practice, OB/GYN or other primary care provider as designated by the insurance carrier.
Emergency Room
Care provided in an emergency siting, inside a hospital or free standing Emergency facility. If the facility has the words “Emergency” or “Emergency Room” in their title participants will be billed like they visited an emergency room in a hospital.
Urgent Care
Services provided in a standalone facility, billed as “Urgent Care.” Usually less expensive than Emergency Room care. Urgent Care can perform many services later in the evening and on weekends. Services include x-rays, casting, immunizations, sick visits, strains and sprains, and school physicals .
Telemedicine or Virtual Medicine
Use medical services via smart device or computer for simple diagnostic procedures. Personnel are state certified and able to prescribe most medications as needed. It is advised to setup participant in the Telehealth system before the actual first use. Check your health plan for coverage details.
Do I really need health insurance?
It depends. If you have no health problems, don’t do hazardous work or play. You may not. Can you withstand paying several thousand dollars to a hospital, if you were in a car wreck. If you have a spouse or children, it becomes more important.
What's the difference between PPO and HMO?
A PPO usually costs more because they have more providers inside their network, more doctors, more specialists, and more hospitals. An HMO has a smaller network – less doctors, less specialists, and less hospitals to choose from. HMOs also have a Primary Care Provider that must approve or refer you to a specialist. Usually you have to designate a Primary Care Provider (PCP) when you sign up for an HMO.
What is Telehealth, Telemedicine or Virtual Medicine?
Telehealth is linking the participant to a qualified medical provider via smart device or computer. This is one of the newest forms of modern medicine. Some plans offer this features for no cost, others have a cost and other don’t offer this benefit. Check your plan for exact details.
What is 100% coinsurance?
When a participant has 100% coinsurance, the insurance carrier pays 100% of the cost for provided, covered services. This is an extremely valuable part of health insurance.
What is the family deductible compared to the individual deductible?
Some plans have the family deductible and the out of pocket maximum as a multiple of the individual deductible and out of pocket maximum, some do not. Check your plan for exact details on your plan.
What are Share Plans?
These are plans that offer a cost saving arrangement for participants. Usually they offer a pool of funds to participants based on level of participation and length of participation. They are NOT insurance plans. Usually Share Plans will have limits on coverage available per health incident as well as limits on pre-existing conditions. Share Plans are usually not backed by an insurance carrier.
How can I reduce my healthcare costs?
1. Try to avoid the Emergency Room (ER). The ER whether inside a hospital or a free standing facility in shopping center, can charge thousands more than an Urgent Care Center or Telemedicine call. Rule of thumb: Go to the ER immediately for heart attack, stroke, or heavy bleeding you can’t stop. Broken bones, earaches, rashes, sprained ankle, UTI, etc. can usually be treated faster and cheaper at Urgent Care or via telemedicine.
2. Consider a Health Savings Account. Choose a plan that says HDHP HSA in the name. Premiums are usually less, but your deductible may be higher. You may be able to bank the difference in an account that you can use for everyday medical expenses. You save on taxes, and you don’t lose the balance that you don’t use that year.
3. Try to exercise more. You don’t have to work out at a gym every day to lose weight. You should adopt a healthy lifestyle that includes daily or regular exercise. Just walk with a partner and hold each other accountable. Certain health plans may even pay you to be on a wellness program.
How can I save money at the Pharmacy?
1. Ask your doctor for samples. Before your doctor prescribes you a new medicine, ask if they have samples or a discount card for the prescription. Usually they do have some type of sample or discount available.
2. Generics may be less expensive without your insurance plan. Many pharmacies offer a list of generic medications at a flat rate of $4 or $5. That flat rate may be less expensive than using your medical plan, if so, use that instead. You don’t have to use your medical plan if it doesn’t make sense.
3. Use mail-order if your plan has it available. In most cases, mail-order will save you up to a month copay at the pharmacy and it is delivered to your door, usually at no cost. It is more economical and more convenient.
Why do I need Life Insurance?
If you have anyone that depends on you to provide for them, how will they be provided for in the event of your death? Life Insurance policy will pay the face amount to the beneficiary.
What are the different kinds or types of Life Insurance?
There are two kinds or types of Life Insurance, Term and Permanent Life Insurance.
What is Term Life Insurance?
Term Life is a contract between the owner and the insurance company. The owner is usually also the insured. Term Life has a preset length of time, i.e., 10 yrs., 20 yrs., etc. that the contract will payout upon the insured’s death. During the same preset length of time the premiums remain the same. The owner designates a beneficiary or beneficiaries who will receive a check upon the insured’s death. If the insured does not die during the term the insurance policy ends.
There will be no payout. There is nothing returned to the owner in the form of a refund.
What is Permanent Life Insurance? Also known Whole Life, Variable Life or Universal Life
Permanent Life Insurance is for someone that wants life insurance throughout their entire life, rather than 30 yrs. or less. Permanent Life Insurance will payout regardless of age when the insured dies. These policies will be more expensive. The policy may build cash value after 10+ years of premium payments. The cash value will increase every year and you may be able be withdraw or borrow some of the cash value.
What does Life Insurance cost?
The least expensive type or kind of Life Insurance is Term Life. The cost is dependent on two things; your age and the length of time you want the policy. It is inexpensive if you are younger or want the policy for short term (10 yrs.). It will be more expensive the older you are and the longer the term you choose. Additionally, if you are in poor health the policy will be more expensive.
How much does Life Insurance cost?
You can buy a policy individually or in a group. The group could be your employer or a professional organization. The group policies will always be less expensive than individual policies. The specific cost will depend on your age and amount of the policy.
How do I know if I die the insurance company will pay my beneficiaries?
Insurance companies are regulated by the state and must have reserve money to pay all claims. The state of Texas guarantees that a claim of $300,000 or less will be paid. Other states may have different laws.
What taxes would be due when the death benefit is paid?
All death benefits paid out by insurance carriers are tax free.
What is Guarantee Issue (GI)?
When buying group insurance, individuals have the opportunity to purchase some amount of Life Insurance without answering or providing any medical information. Guarantee Issue insurance is offered during limited times and not always available.
What is Disability Insurance?
Disability Insurance pays out if you are unable to work. There are types of Disability Insurance, Short Term and Long Term.
What is the difference between Short-Term Disability(STD) and Long-Term Disability(LTD) Insurance?

Short Term Disability (STD) can have a benefit period of 12 to 52 weeks, depending on the policy. There can be a waiting period before benefits begin. Benefits are usually paid weekly and have a minimum and maximum amount. Most STD policies are available in a group situation.

Long Term Disability (LTD) can have a benefit period of 24 months to full retirement age, depending on the policy. There is a waiting period that has to be met before benefits pay out. During the waiting period STD can be paid. Benefits are usually paid monthly and have a minimum and maximum amount.

How can I get Disability Insurance?
Employers can offer Group Disability Insurance to their employees. Anyone can buy Individual Disability Insurance however, you must be able to prove you have a source of income.
How much of a benefit do I receive?
Benefits are determined by a percentage of your income. Usually 60% or 65% of income covered.
How much does it cost?
The cost is based on your age, the salary that is being covered and the length of the benefit period.
If I collect benefits, are the benefits taxable?
If the premium is paid by after tax money, then the benefits are not taxable. If you are uncertain what is after tax money please consult your tax preparer.