Benefits glossary

Insurance language, translated. Search a term or browse by category.

50 terms

Laws & Regulations

Affordable Care Act (ACA): The 2010 federal law that set the ground rules for how health insurance works — what plans must cover, and that insurers can't turn people away for pre-existing conditions.
COBRA: A federal law letting you keep your employer health plan after leaving your job (usually up to 18 months) — same coverage, but you now pay the full premium yourself.
Grandfathered Plan: A health plan that existed before March 2010 and hasn't changed much since — it's exempt from some newer ACA rules, not necessarily better.
Minimum Essential Coverage (MEC): The baseline level of coverage that satisfies the ACA's requirement to have insurance. It's the legal floor, not a measure of how good the plan is.

Annual Maximum: The most your plan will pay in a year for a benefit (common in dental/vision) — once it's used up, you're responsible for the rest.
Balance Billing: When an out-of-network provider bills you for the gap between their charge and what your insurer paid — often doesn't count toward your out-of-pocket max.
Coinsurance: The percentage of a bill you pay after your deductible is met (e.g., 20% coinsurance means you pay 20%, insurance pays 80%).
Copay: A fixed dollar amount you pay for a visit or prescription, regardless of the total bill.
Deductible: What you pay out of pocket each year before insurance starts sharing costs (some services, like copay visits, may not require this first).
Lifetime Maximum Benefit: A cap on what a plan will ever pay you over your lifetime for certain benefits — the opposite of “unlimited,” despite the name.
Out-of-Pocket Maximum: The absolute most you'll pay for covered in-network care in a plan year — after that, the plan covers 100%. Out-of-network costs and non-covered services usually don't count toward it.

Beneficiary: The person who receives your life insurance payout — must be named separately; doesn't default to your dependents.
Dependent Eligibility: The plan's rules for who can be covered — typically spouse/domestic partner and children up to age 26.
Dependent Verification: Providing documents (birth/marriage certificates) to prove a dependent qualifies for coverage.
Domestic Partner Coverage: Coverage for an unmarried partner, if your employer offers it — availability and requirements vary by employer and state.
Imputed Income: The taxable value the IRS assigns to certain benefits (often employer-paid coverage for a non-tax-dependent domestic partner) — it shows up as extra income on your paycheck/W-2.
Portability: The ability to take certain coverage (like life insurance) with you when you leave your job, usually by converting to an individual policy you pay for.
Waiver of Coverage: Formally declining an employer's insurance for the current plan year, usually because you have coverage elsewhere.
Waiver of Premium: A life-insurance feature that pauses your premium payments if you become disabled, while your coverage stays active — applies only if you meet the policy's disability definition.

EPO (Exclusive Provider Organization): In-network only, no referrals needed — out-of-network care isn't covered.
HDHP (High Deductible Health Plan): Lower premium, higher deductible — pairs with an HSA for tax-advantaged savings.
HMO (Health Maintenance Organization): Requires a primary care provider and referrals to specialists; generally lower cost, less flexibility.
In-Network: Providers contracted with your insurer for discounted rates.
Out-of-Network: Providers with no contract with your insurer — usually costs significantly more.
Outpatient vs. Inpatient: Outpatient = no overnight hospital stay; inpatient = admitted for at least one night. Refers to length of stay, not how serious the care is.
POS (Point of Service): A hybrid — pick a primary care provider and get referrals (like an HMO), but can go out-of-network at higher cost (like a PPO).
PPO (Preferred Provider Organization): Flexible — see in- or out-of-network providers, no referrals — usually costs more for that flexibility.

Dependent Care FSA: A pre-tax account specifically for child/dependent care expenses like daycare — can't be used for medical costs.
FSA (Flexible Spending Account): Pre-tax payroll deductions for eligible medical expenses — generally “use it or lose it” each plan year.
HSA (Health Savings Account): A tax-advantaged account available if you're enrolled in an HDHP — contributions, growth, and qualified withdrawals are all tax-free, and it's yours even if you change jobs.
Limited Purpose FSA: An FSA restricted to dental and vision expenses, typically paired with an HSA.
Post-Tax Contribution: Money deducted after taxes — common for some voluntary benefits; payouts from these are often tax-free.
Pre-Tax Contribution: Money deducted from your paycheck before taxes — lowers your taxable income.

Buy-Up Option: The ability to purchase additional coverage beyond the default employer-provided amount.
Evidence of Insurability (EOI): A health questionnaire (sometimes an exam) required to qualify for certain coverage amounts.
Guaranteed Issue: Coverage available without answering health questions, up to a capped amount.
Long-Term Disability (LTD): Replaces part of your income for an extended period after STD ends — has a defined end point, not lifelong.
Short-Term Disability (STD): Replaces part of your income for a few months if you can't work due to illness, injury, or childbirth.

Coordination of Benefits (COB): Rules that determine which plan pays first when you're covered by more than one (e.g., your plan is usually primary for you; a “birthday rule” often applies for kids covered by both parents).
Explanation of Benefits (EOB): A statement from your insurer showing what was billed, covered, and owed — it's a summary, not a bill.
Open Enrollment: The once-a-year window to enroll in or change benefits for the coming plan year.
Prior Authorization: Insurer approval required before certain services are covered — confirms medical necessity in advance but doesn't guarantee full payment later.
Qualifying Life Event (QLE): A specific life change (marriage, birth, divorce, job loss, etc.) that allows benefit changes outside open enrollment — you generally have 30–60 days to act.
Special Enrollment Period: The window triggered by a QLE during which you can enroll in or change coverage.
Summary of Benefits and Coverage (SBC): A standardized, easy-to-compare document outlining what a plan covers and costs.
Summary Plan Description (SPD): A detailed document explaining how your plan works — eligibility, coverage, claims — required by law.
Usual, Customary, and Reasonable (UCR) Charges: What an insurer considers a fair price for a service in your area — charges above UCR may not be fully covered.

Ancillary Benefits: Supplemental coverage beyond core medical — dental, vision, life, disability — often partly employer-paid.
Core Benefits: The foundational benefits most employers offer (medical, dental, vision).
Voluntary Benefits: Optional, typically fully employee-paid add-ons like accident or critical illness coverage.