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Glossary


Flexible spending account (FSA)
A plan in which employees set aside pre-tax wages for qualified expenses, such as uncovered medical expenses. The amount set aside is determined in advance, and employees lose any dollars remaining in the account at year’s end.

Formulary
A listing of prescription drugs that a health plan pays for.

Gap insurance
An insurance policy that provides reimbursement for costs related to deductibles and copayments not covered by the primary plan.

Gatekeeper
Term that describes the role of a primary care physician (PCP) in a managed care plan. The PCP must authorize all medical services provided to the insured.

Generic
Prescription drugs manufactured by generic pharmaceutical companies after the patent for the brand-name drug has expired. These drugs typically cost much less than their brand-name equivalent.

Group life
Life insurance available through an employer or association that covers members under a master policy.

Health insurance
Insurance policy that provides coverage for medical expenses, including medicine, doctor and emergency room visits, and hospital stays.

HIPAA
The Health Insurance Portability and Accountability Act (HIPAA) protects health insurance coverage for workers when they change or lose their jobs. The act also governs the security and privacy of health data and creates national standards for electronic health care transactions.

HMO
Health Maintenance Organization. Group health coverage in which participating doctors and other professionals offer care for a flat monthly rate without deductibles. The policy only covers visits to professionals within the network, and the HMO must clear all treatment.

Homeowner’s insurance
Insurance policy that combines protection against damage to a residence and its contents with protection against personal liability or theft.

HRA
Health Reimbursement Arrangements. An employer-provided health savings account that reimburses employees for medical care expenses.

HSA
Health Spending Account or Health Savings Account. A self-funded account consumers can use to pay for qualified medical expenses not covered by health insurance.

Indemnity
Insurance that covers the insured against loss of an asset.

In-network
Providers or health care facilities that belong to a health plan’s network of providers, with which the insurance company has negotiated a discount. Insured individuals usually pay less when using in-network providers because of these discounts.

Insurance rider
Provides for an increase in the amount of coverage.

Insured
A person covered by an insurance contract.

Insurer
The company that issues an insurance contract.

Liability
Insurance to cover what the policyholder must legally pay because of bodily injury or property damage caused to another person.

Life insurance
Insurance that pays a specific sum of money to a designated beneficiary upon the death of the insured.

Long-term care
A term that describes a variety of services designed to meet medical, personal and social needs in a range of settings and locations.

Managed care
A term that originally described the prepaid health care sector, like HMOs. The term now often includes PPOs and other programs with utilization controls.

Maximum out-of-pocket
The maximum amount of money a person pays toward the deductible and co-insurance during one year.

Medical gap insurance
An insurance policy that provides reimbursement for costs related to deductibles and copayments not covered by the primary health plan.

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