Key Terms for Health Insurance

This page contains a glossary of key terms related to health insurance.

Health Insurance Terminology

• Cafeteria Plan: A plan that is maintained by an employer for employees that meets the specific requirements of and regulations of section 125 of the Internal Revenue Code.
• Certificate of Creditable Coverage (COCC): An official document issued by an insurance carrier that confirms enrollment in insurance coverage, including coverage start and end dates. Commonly required to show proof of loss of coverage in order to enroll under a Qualifying Life Event.
• Claim: A formal request to an insurance company asking for a payment based on the terms of the insurance policy.
• Coinsurance: A percentage of the total cost of a medical service that is paid out of pocket.
• Copay: The amount paid out of pocket after a doctor's visit or when paying for prescription medicine.
• Deductible: The amount of money an enrollee must pay out-of-pocket for medical expenses before health insurance kicks in and begins covering the expenses.
• Effective Date: The date that insurance coverage is officially active.
• Health Maintenance Organization (HMO): A type of medical insurance plan with regulated care that is available to only employees living with its designated network area.
• In-Network Provider: A doctor, specialist, etc. that has contracted with the insurance carrier to participate in a specific network.
• Out-of-Network Provider: Any provider who does not belong to the carrier's network.
• Out-of-Pocket Maximum: How much an enrollee must spend on healthcare before insurance covers 100% of medical expenses.
• Preferred Provider Organization (PPO): A type of medical insurance plan with nationwide coverage and no requirement for a Primary Care Physician.
• Preventive Care: Services that are 100% covered with an in-network doctor.
• Primary Care Physician: A doctor that acts as the gatekeeper for all of the enrollee's services and referrals for those enrolled in a POS or HMO plan.
• Qualifying Life Event: Occasions which allow employees to enroll in or make changes to existing insurance outside of their annual open enrollment.
• Waiting Period: The length of time that employees must work at a company before their coverage is effective.