Health Insurance Glossary

A

ACA: The Affordable Care Act, the federal health reform law that created Marketplace plans, premium tax credits, essential health benefits, and many consumer protections. Explore individual ACA plan help.
Actuarial value: The approximate percentage of covered health care costs a plan is expected to pay for a standard population. Metal tiers are based on actuarial value, not the quality of care.
Advance premium tax credit (APTC): A Marketplace subsidy paid in advance to lower your monthly premium. The amount is reconciled on your federal tax return. Learn about subsidies and CSR.
Allowed amount: The maximum amount a plan recognizes for a covered service. If a provider charges more than the allowed amount, your responsibility depends on network status and balance billing protections.
Ambulatory patient services: Outpatient care you receive without being admitted to a hospital, such as many office visits, procedures, and same-day services.
Annual deductible: The deductible amount that resets each plan year. Many plans track separate deductibles for medical care, prescriptions, in-network care, and out-of-network care.
Annual limit: A cap a plan places on certain benefits during a year. ACA-compliant major medical plans cannot place annual dollar limits on essential health benefits, but non-dollar limits and nonessential benefit limits may still apply.
Appeal: A request asking a plan or Marketplace to review a decision, such as a denied claim, denied prior authorization, or eligibility determination.

B

Balance billing: When a provider bills you for the difference between the provider's charge and the plan's allowed amount. Federal protections limit surprise balance bills in many emergency and certain facility-based situations.
Benefit year: The 12-month period when your plan's benefits, deductible, out-of-pocket limit, and covered services apply. Many individual and small group plans use a calendar-year benefit year.
Benefits: The health care items and services a plan covers, subject to plan rules such as medical necessity, cost sharing, network requirements, and exclusions.
Brand-name drug: A prescription drug sold under a proprietary name by its manufacturer. Brand drugs often cost more than generic alternatives and may sit on a higher formulary tier.
Bronze plan: A Marketplace metal tier with lower premiums and higher expected out-of-pocket costs than Silver, Gold, or Platinum plans. Bronze plans can fit people who want lower monthly premiums and can handle more cost exposure.
Broker: A licensed insurance professional who helps compare, enroll in, and service insurance coverage. Contact Akins Advisory Partners for Virginia plan guidance.

C

Calendar-year plan: A plan that runs from January 1 through December 31. Deductibles and out-of-pocket limits usually reset at the start of the new calendar year.
Carrier: The insurance company that issues or administers the health plan.
Claim: A request for payment sent to the insurance carrier after a covered health service, usually by the provider but sometimes by the member.
COBRA: A federal continuation coverage law that may let eligible employees and dependents keep employer health coverage for a limited time after certain events, often at the full premium plus an administrative fee.
Coinsurance: Your percentage share of the allowed cost for a covered service. For example, with 20% coinsurance, you pay 20% and the plan pays the rest after applicable deductible rules.
Community rating: A rating rule that limits how carriers set premiums. ACA individual and small group premiums generally vary by location, age, tobacco use, family size, and plan, not by medical history.
Copay: A fixed dollar amount you pay for a covered service, such as a primary care visit or generic prescription. Copays may apply before or after the deductible depending on the plan.
Cost sharing: The costs you pay when you receive care, including deductibles, copays, and coinsurance. Premiums, balance-billed amounts, and noncovered services usually are not considered cost sharing.
Cost-sharing reduction (CSR): Extra Marketplace savings that lower out-of-pocket costs for eligible people who enroll in a Silver plan. Read more about CSR.
Covered service: A health care service, supply, medication, or item that is included under your plan's benefits when plan rules are met.
Creditable coverage: Prior health coverage that may count for certain eligibility or continuation rules. In Medicare prescription drug contexts, creditable coverage has a specific meaning for avoiding late enrollment penalties.

D

Deductible: The amount you pay for covered services before the plan starts paying for many benefits. Some services, such as preventive care or office visits, may be covered before the deductible.
Dependent: A person, such as a spouse or child, who may be covered under another person's health plan if eligibility rules are met.
Drug tier: A formulary category that determines prescription cost sharing. Lower tiers generally cost less; specialty or nonpreferred tiers usually cost more.
Durable medical equipment (DME): Medical equipment ordered for repeated use, such as wheelchairs, oxygen equipment, or certain monitors, when covered under plan rules.

E

Effective date: The date your coverage starts. Services before the effective date are generally not covered by that plan.
Eligibility: The rules that determine whether you can enroll in a plan or receive financial assistance, such as residence, household, income, employer coverage, or qualifying event rules.
Emergency medical condition: A condition with severe symptoms where a reasonable person would expect that not getting immediate medical attention could seriously jeopardize health.
Emergency room care: Hospital emergency services for sudden and serious conditions. Emergency care is covered differently than routine care, but cost sharing still applies.
Employer contribution: The amount an employer pays toward employee coverage or an employee benefit arrangement. Explore small business health coverage.
Employer mandate: The ACA employer shared responsibility rules that may apply to applicable large employers, generally those with 50 or more full-time employees including full-time equivalents.
Enrollment period: A window when you can enroll in, change, or renew coverage. Common windows include Open Enrollment, Special Enrollment Periods, and employer annual enrollment.
Essential health benefits: Ten broad categories of benefits ACA-compliant individual and small group plans must cover, including preventive care, hospitalization, emergency services, prescription drugs, maternity care, and mental health care.
Evidence of insurability: Health information an insurer may require for certain types of coverage, often in life or disability insurance. ACA-compliant major medical coverage generally does not use medical underwriting.
Excluded service: A service or item your plan does not cover. You typically pay the full cost unless another program or coverage source applies.
Explanation of benefits (EOB): A statement from the carrier showing how a claim was processed, including billed charges, allowed amount, plan payment, and any patient responsibility. An EOB is not usually a bill.

F

Family deductible: The deductible amount that applies when more than one family member is covered. Plans may also include embedded individual deductibles for each covered person.
Federal poverty level (FPL): A federal income measure used for many eligibility rules, including Marketplace subsidy and CSR calculations.
Flexible spending account (FSA): An employer-sponsored account that lets eligible employees use pretax dollars for qualified medical expenses. FSAs usually have use-it-or-lose-it rules.
Form 1095-A: The Marketplace tax form used to report coverage months, premiums, and advance premium tax credits for tax filing.
Formulary: A plan's covered drug list. Formularies assign drugs to tiers and may include rules such as prior authorization, step therapy, or quantity limits.
Fully insured plan: A health plan where an insurance carrier takes on the claims risk in exchange for premiums. Many small group plans are fully insured. Compare small business options.

G

Generic drug: A prescription drug with the same active ingredient as a brand-name drug and typically a lower cost.
Gold plan: A Marketplace metal tier with higher premiums and lower expected out-of-pocket costs than Bronze or many Silver plans.
Grace period: A limited time after a missed premium payment when coverage may continue before termination. Marketplace grace period rules can vary based on subsidy status.
Grandfathered plan: A plan that existed before the ACA and has kept certain status by avoiding major changes. Grandfathered plans may not include all ACA protections.
Group health insurance: Health coverage offered by an employer or organization to eligible members, employees, and sometimes dependents. See group health plan guidance.
Guaranteed issue: A rule requiring coverage to be available to eligible applicants regardless of health status, medical history, or pre-existing conditions.

H

Health maintenance organization (HMO): A network-based plan that usually requires care from in-network providers except for emergencies and may require primary care referrals.
Health reimbursement arrangement (HRA): An employer-funded arrangement that reimburses eligible medical expenses, sometimes including individual health insurance premiums. Learn about HRAs for small businesses.
Health savings account (HSA): A tax-advantaged account available to eligible people enrolled in an HSA-qualified high deductible health plan. Funds can be used for qualified medical expenses. Review HDHP with HSA basics.
High deductible health plan (HDHP): A plan meeting federal requirements for HSA eligibility, including minimum deductible and maximum out-of-pocket limits. Not every plan with a high deductible is HSA-qualified.
HIPAA: A federal law with rules covering health information privacy, security, portability, and certain administrative standards.
Hospice services: Care focused on comfort and support for people with a terminal illness, often involving medical, emotional, and family support services.
Hospitalization: Care received after admission to a hospital as an inpatient. Hospitalization is one of the ACA essential health benefit categories.

I

ICHRA: An Individual Coverage HRA, an employer-funded arrangement that can reimburse employees for individual coverage and eligible expenses if rules are met. Compare ICHRA vs QSEHRA.
Indemnity plan: A plan that pays a fixed benefit amount for specified services or events. Indemnity coverage is usually not a substitute for ACA-compliant major medical insurance.
Individual health insurance: Coverage you buy for yourself or your family rather than through an employer. Get help with individual health insurance.
In-network provider: A provider or facility that contracts with your plan to provide covered services at negotiated rates.
Inpatient care: Care received after formal admission to a hospital or facility. Inpatient cost sharing can differ significantly from outpatient care.

L

Lapse: A loss of coverage because required premiums were not paid or other plan requirements were not met.
Life insurance: Coverage designed to pay a death benefit to beneficiaries if the insured person dies while the policy is active. Explore life insurance options.
Lifetime limit: A cap on how much a plan will pay over a person's lifetime. ACA-compliant major medical plans cannot place lifetime dollar limits on essential health benefits.
Limited benefit plan: Coverage that pays only for specific services, conditions, or fixed dollar amounts. These plans often leave major gaps compared with major medical coverage.

M

Major medical insurance: Comprehensive health insurance designed to cover a broad range of medical services, typically including hospital, physician, prescription drug, emergency, preventive, and specialist care.
Marketplace: The health insurance exchange where eligible people can compare individual and family plans and apply for premium tax credits and cost-sharing reductions. Learn when a Marketplace plan may fit.
Medicaid: A government health coverage program for eligible low-income individuals and families. Eligibility varies by state and household circumstances.
Medical necessity: A plan standard used to decide whether a service is appropriate and covered for diagnosing, treating, or managing a condition under plan rules.
Metal tier: Marketplace plan categories: Bronze, Silver, Gold, and Platinum. Tiers describe expected cost sharing, not quality of doctors or hospitals.
Minimum essential coverage (MEC): Coverage that meets federal standards for certain ACA purposes. Examples often include Marketplace plans, most employer plans, Medicare, Medicaid, and TRICARE.
Minimum value: An employer plan standard under the ACA. A plan generally provides minimum value if it pays at least 60% of total allowed costs and includes substantial physician and inpatient hospital coverage.

N

Network: The doctors, hospitals, labs, pharmacies, and other providers contracted with a plan. Network fit is one of the most important plan selection factors.
Noncovered service: A service the plan does not cover. You may be responsible for the full cost.
Nonpreferred provider: A provider that may be covered at a higher cost or not covered at all, depending on the plan's network rules.

O

Open Enrollment: The annual period when people can enroll in or change individual health insurance for the upcoming year. Compare Open Enrollment and Special Enrollment.
Out-of-network provider: A provider or facility without a contract with your plan. Out-of-network care can cost more and may not count toward in-network limits.
Out-of-pocket cost: The amount you personally pay for care, such as deductibles, copays, coinsurance, and noncovered services.
Out-of-pocket maximum: The most you pay in a plan year for covered in-network essential health benefits. Premiums, noncovered services, and many out-of-network costs do not count toward this limit.
Outpatient care: Care received without being admitted as an inpatient, such as many office visits, lab tests, imaging services, and same-day procedures.

P

Plan year: The 12-month period a plan uses for benefits, deductibles, and out-of-pocket limits. It may or may not match the calendar year.
Platinum plan: A Marketplace metal tier with the highest premiums and lowest expected out-of-pocket costs among standard metal tiers.
Point of service (POS) plan: A plan type that combines network features and may require primary care coordination while offering some out-of-network coverage.
Preauthorization: Also called prior authorization. Plan approval required before certain services, drugs, or procedures are covered.
Pre-existing condition: A health condition that existed before coverage started. ACA-compliant major medical plans cannot deny coverage or charge more because of pre-existing conditions.
Preferred provider organization (PPO): A plan type that usually offers more flexibility to see out-of-network providers, often at higher cost, and often without referrals.
Premium: The amount paid to keep coverage active, usually monthly. Premiums are separate from deductibles, copays, and coinsurance.
Premium tax credit (PTC): A refundable federal tax credit that helps eligible people pay for Marketplace coverage. It can be taken in advance or claimed at tax filing. Understand premium tax credits.
Prescription drug coverage: The part of a plan that covers medications, subject to the formulary, tiers, pharmacy network, and utilization rules.
Preventive care: Certain screenings, immunizations, counseling, and wellness services intended to prevent or detect illness early. Many ACA-compliant plans cover specified in-network preventive services without cost sharing.
Primary care provider (PCP): A doctor or clinician who provides routine care and often coordinates referrals, especially in HMO-style plans.
Prior authorization: A requirement to get plan approval before a service or medication is covered. Approval does not always guarantee final claim payment if other plan rules are not met.

Q

Qualified health plan (QHP): An ACA-certified plan sold through a Marketplace that meets standards for essential health benefits, cost sharing, provider networks, and consumer protections.
Qualified medical expense: An expense that can be paid or reimbursed tax-free under certain accounts or arrangements, such as HSAs, FSAs, or HRAs, when program rules are met.
Qualifying life event: A life change that may allow a Special Enrollment Period, such as losing qualifying coverage, moving, marriage, birth, adoption, or certain household changes. See special enrollment help.
QSEHRA: A Qualified Small Employer HRA, available to eligible small employers that do not offer a group health plan and want to reimburse employees for eligible expenses within annual limits. Compare QSEHRA with ICHRA.

R

Referral: An authorization or recommendation from a primary care provider to see a specialist. Some plans require referrals for specialist coverage.
Reimbursement: Payment back to a person or provider for eligible expenses. HRAs reimburse eligible employees for qualified expenses under plan rules.
Renewal: The process of continuing or updating coverage for a new plan year. Read the health insurance renewal guide.
Rescission: A retroactive cancellation of coverage. ACA rules generally prohibit rescissions except in cases such as fraud or intentional misrepresentation of material facts.
Rider: An amendment or add-on to an insurance policy that changes coverage. Riders are common in life insurance and some supplemental coverage.

S

Second lowest cost Silver plan (SLCSP): The benchmark Marketplace plan used to calculate premium tax credits. It may not be the plan you actually choose.
Self-funded plan: A plan where the employer takes on the claims risk, often using an administrator to process claims. Larger employers use self-funded plans more often than small employers.
Service area: The geographic area where a plan is available and where its provider network is built.
Short-term health insurance: Temporary coverage designed to bridge gaps. Short-term plans are not ACA-compliant major medical plans and may exclude pre-existing conditions or essential benefits.
Silver plan: A Marketplace metal tier often used as the benchmark for subsidies. Eligible people must choose a Silver plan to receive cost-sharing reductions.
Special Enrollment Period (SEP): A time outside Open Enrollment when you can enroll or change plans after certain qualifying life events. Get help with Special Enrollment.
Specialist: A provider focused on a specific area of medicine, such as cardiology, dermatology, oncology, or orthopedics.
Step therapy: A prescription rule requiring you to try one or more lower-cost or preferred drugs before the plan covers another drug.
Subsidy: Financial help that lowers coverage costs. In Marketplace coverage, subsidies usually refer to premium tax credits and cost-sharing reductions. Learn how subsidies work.
Summary of benefits and coverage (SBC): A standardized document that summarizes a plan's covered services, cost sharing, limitations, and coverage examples.
Surprise bill: An unexpected out-of-network bill, often tied to emergency care or care at an in-network facility from an out-of-network provider. Federal protections may limit many surprise bills.

T

Taxable stipend: Money an employer gives employees as taxable compensation, sometimes intended to help with health costs. Unlike an HRA, a stipend generally does not reimburse expenses tax-free and may affect subsidy calculations.
Telehealth: Health care delivered remotely by phone, video, messaging, or other digital tools. Coverage and cost sharing vary by plan and service type.
Term life insurance: Life insurance that provides coverage for a specific period, such as 10, 20, or 30 years. Learn about term and whole life coverage.
Tobacco rating: A premium rating factor that may allow higher premiums for tobacco users in some individual and small group markets, subject to federal and state rules.

U

Urgent care: Care for conditions that need prompt attention but are not typically life-threatening emergencies, such as minor fractures, infections, or stitches.
Usual, customary, and reasonable charge (UCR): A payment benchmark some plans use for out-of-network or indemnity-style benefits. If a provider charges more than the UCR amount, you may owe the difference.

V

Virtual care: Remote care delivered through video, phone, chat, or app-based services. It may include telehealth visits, behavioral health, urgent care, or chronic care support.
Vision coverage: Coverage for eye exams, glasses, contacts, or related services. Adult vision coverage is often separate from major medical insurance.

W

Waiting period: The time before coverage or a specific benefit becomes effective. Employer health plan waiting periods are subject to federal limits.
Wellness visit: A preventive visit focused on overall health, screening, risk factors, and care planning. Coverage depends on the plan and the services provided during the visit.
Whole life insurance: Permanent life insurance designed to last for the insured person's lifetime if premiums and policy requirements are met, usually with a cash value component. Compare life insurance options.

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