DEFINITIONS-The following “definitions” are what we use in our business. They may not agree with others, nor are they the “official” definitions used by every company, every agent or the government. They are what we can use to communicate. For the “official” definitions, go to www.doi.state.fl.us and check out the frequently asked questions from the Florida Department of Insurance.
ANNUITY- A contract providing a guaranteed and a projected percentage return on funds deposited. Fixed and variable annuities are both savings plans with certain tax advantages and conservation of money. For more information, please e-mail a request and we will provide more details.
ASSIGNMENT- Often used with doctors who do or do not accept “assignment” of Medicare benefits. A doctor who accepts assignment agrees to accept as full payment what Medicare specifies.
ASSISTED LIVING- Includes the cost of all or many levels of care such as home health care, adult congregate living facilities (ACLF), nursing home and more. See LONG TERM CARE INSURANCE definition.
CAFETERIA PLAN (SECTION 125)- A plan offered by employers to their employees where specific insurance plans are funded through pretax dollars. Advantages are best for larger groups .Please e-mail your request for more details.
COBRA (Consolidated Omnibus Budget Reconciliation Act)- Federal program requiring group health plans to offer employees continuation of coverage when employment is terminated. Request more information by e-mail for details, restrictions and size of group requirements.
CO-INSURANCE- On plans that pay a percentage of expenses (usually after a deductible has been met), co-insurance refers to the percentage paid by the insurance and the percentage paid by the insured.
CO-PAY- Most HMO plans and some other plans provide full coverage for certain expenses with the insured paying only a small co-payment to the provider at the time of service.
DEDUCTIBLE- Usually with PPO and Indemnity plans, the deductible is the amount paid by the insured before any insurance benefits are paid. Some plans have “per cause” and some plans have “per year” deductibles. Also, some plans offer selected benefits, such as doctor office visits, with a co-pay without any deductible with all other benefits available after the deductible has been satisfied.
DISABILITY INSURANCE- Provides payment to insured when disabled and unable to work. Usually, payments begin after a certain period (elimination period), and will continue to pay for a specific period of time ( to age 65, 10 years, etc) as long as the insured is unable to work. Maximum payments are usually limited to a percentage of the insurd’s prior year earnings and are usually made on a monthly basis.
FORMULARY- A listing of included prescription drugs on a prescription drug insurance plan.Some prescription plans offer different co-pays for generic and brand name drugs, and a third co-pay for drugs that are not on their list of approved drugs. Insurance companies and HMO’s often contracts with a third party to provide this benefit to their members and policyholders.
GROUP INSURANCE- In Florida, a single, self employed individual and an employer with employees are eligible for “Group” insurance. These plans are available regardless of existing medical conditions (they may have one to two year waiting periods for preexisting conditions depending on whether or not prior qualifying insurance exists). Proof of self-employment or business existence usually requires income tax records reflecting income from self employment or business. New business have other requirements.
HMO- Health Maintenance Organization- Available to group and individuals, plans offer payment of benefits with co-pays required. These plans usually excel in providing coverage for preventative care and pregnancy. Members must use doctors and other providers who are contracted with the HMO, otherwise, there is no coverage.
INDIVIDUAL INSURANCE- Plans obtained by individuals and families who will pay premiums without any employer involvement. These plans require full medical “underwriting”, applicants answering questions about prior medical history ; sometimes medical exams are required. The insurance company or HMO may decline to issue if the preexisting medical conditions are not acceptable risks.
INDEMNITY PLAN- Insurance that allows policyholder to use any doctor or other provider. Unlike PPO or HMO plans, there is no list or network to be concerned about. Only restrictions are usually provider licensing and treatments not excluded from coverage.
LONG TERM CARE INSURANCE (LTC)- Provides benefits for nursing home care. Some plans cover all levels of “assisted living”, including home health care, adult congregate living facilities (ACLF), day care and more. Claims are usually triggered by a persons inability to perform a certain number of “ADL’s (Activities of Daily Living). Plans can have an elimination period and usually pay for a certain length of time or up to a maximum amount specified in the policy.
MAJOR MEDICAL- Refers to a health insurance plan with a high “maximum benefit” and with comprehensive rather than scheduled benefits. Most health insurance is now referred to as PPO, HMO, etc. rather than “Major Medical”, with the assumption of high benefit levels.
MEDICAID- Federal-State insurance for persons with limited income or otherwise eligible do to health conditions or other qualifying requirements.
MEDICARE- Federal plan of health insurance for persons age 65 and over or others under age 65 with medical disabilities. Medicare covers a per- percentage of medical costs, the balance paid by the insured or by Medicare supplement insurance (medi-gap), HMO plans or other plans. Please request from us a Guide to Insurance for Persons on Medicare for more details.
MODIFIED BENEFIT- Usually refers to life insurance where the first and second year death benefit is limited to something less than the full face amount.
NURSING HOME INSURANCE - Please see Long Term Care Insurance.
OUTPATIENT- Refers to medical treatment not requiring over night hospitalization. Treatment in a doctor’s office, at a hospital but without over night admission, and clinic services vices are examples.
POS- Point of Service- PLANS- Insurance usually like HMO, with co-pays, but allows the insured to obtain medical service “out of network”, usually by paying a deductible and co-insurance.
PPO- Preferred Provider Organization- Insurance plan, usually with a deductible and co-insurance, with full benefits when utilizing network providers. Benefits are available out of network, but at a lower level. Some PPO plans have Primary Care Provider referral requirements and some PPO plans offer co-pay benefits with no deductible for certain services .
Primary Care Physician (PCP)- Most HMO’s and some PPO’s require insured to select a PCP who is usually a general practitioner, internist or other non specialist. Some plans require the insured obtain a “referral” from the PCP before seeing a specialist.
Prior Authorization- This normally applies to the requirement from PPO and indemnity plans that before any hospitalization, the insurance company be contacted and advised of the “course of treatment” anticipated. If this requirement exists, claim payment may be decreased if prior authorization is not obtained. The doctor and/or hospital normally is responsible for this procedure.
Provider Network- A listing of doctors, hospitals, and other providers an HMO or PPO is contracted with. Many provider networks are “leased” by more than one company , some are established and maintained by the HMO or insurance company internally.
Referral- Most HMO and PPO plans require the insured to obtain a “referral” from a primary care provider before seeing any specialist. Depending on the PCP, this can be done with a simple telephone call or may require a visit to the PCP. The purpose of referrals is to avoid unnecessary specialist visits and the resulting cost.
Short Term (Interim) Insurance- Insurance plans that can be held in force for specific, predetermined periods of time- 6 months, 1 year. Designed for temporary needs (between jobs, graduating students,etc), these plans are generally available with very liberal underwriting with preexisting conditions excluded from coverage.
Supplementary Plans- Plans that supplement coverage from another source. Medicare supplements are most common. Other supplementary or “specialty”plans include those that cover only cancer, accidents, intensive care , etc.
Underwriting- This is the process an insurance company or HMO utilizes in determining if a risk is acceptable. Applications requiring answers to many health questions, medical examinations and home office telephone interviews are some of the methods used. In Florida, “group” insurance is automatic issue (no medical underwriting), but does require proof of eligibility (actual business or self employment). This is another form of underwriting.