Common Insurance Terms - Dean Health Plan

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Common Insurance Terms

The Affordable Care Act (ACA) includes many new terms and benefits that can lead to questions and confusion for those with and without insurance. To help you through the health care reform maze here is a list of health care reform related terms and details on how they may impact your health insurance coverage.

Annual and Lifetime Limits

Insurance carriers are not allowed to place annual or lifetime dollar limits on the essential health benefits.

Appeals Process

In 2010, new rules were established to ensure consumers in new plans have access to an effective internal and external appeals process to appeal decisions.

Coverage for Dependents to age 26

The ACA requires health plans to allow young adults up to their 26th birthday to remain on their parents' insurance policy, at the parents' choice.

Essential Health Benefits

A core set of benefits that must be covered by all individual and small group plans.

Guaranteed Issue

Within specific enrollment periods, all health insurers must accept any individual that applies for coverage without regard to health status, use of services or pre-existing conditions.

Health Insurance Marketplace

The Marketplace is a Federal online resource to compare and purchase health insurance plans for individuals and small group employers. Enrollment begins November 1, 2015 with coverage effective as early as January 1, 2016.

Individual Mandate

The vast majority of Americans are required to have insurance. Individuals who do not have a plan that qualifies as minimum essential coverage may have to pay a fee. People with very low incomes and others may be eligible for waivers.

Maximum Out-of-Pocket Costs

Out-of-pocket costs are your expenses for medical care that aren’t reimbursed by insurance and include deductibles, coinsurance, and copayments for covered services plus all costs for services that aren't covered. The ACA requires that all plans adhere to out-of-pocket maximums on essential health benefits of $6,850 for self-only coverage and $13,700 for family coverage.

Medical Loss Ratio

Beginning in 2011 the ACA includes a provision that requires plans in the individual and small group market to spend not less than 80 percent (80%) of premiums on medical services. Plans in the large group market must spend no less than 85 percent (85%) on medical services. Insurers that don't meet these thresholds must provide rebates to policyholders.

Metal Tier

Plans are primarily separated into four levels – Bronze, Silver, Gold or Platinum – based on the percentage the plan pays of the average overall cost of providing essential health benefits to members.

Minimum Essential Coverage

The type of coverage an individual needs to have to meet the individual responsibility requirement under the Affordable Care Act. This includes individual market policies, job-based coverage, Medicare, Medicaid, CHIP, TRICARE and certain other coverage.

Preventive Services

Since 2010 preventive services have been covered with no copayments, coinsurance or deductibles. Beginning in 2012, additional preventive services for women were added without copayments, coinsurance or deductibles.

Special Enrollment Period

A time outside of the open enrollment period during which an individual/family has the right to sign up for or change health coverage and receive guaranteed coverage. To be eligible, individual/family must have a qualifying life event

Summary of Benefits and Coverage

Since 2012, insurance carriers have been required to provide consumers with a concise document outlining, in plain language, and simple and consistent information about health plan benefits and coverage.