Glossary: Key Health Insurance

Navigating health insurance can feel overwhelming when you encounter unfamiliar terminology. Whether you’re shopping for an individual health plan or comparing family health plans during Open Enrollment, understanding these terms empowers you to make confident, informed choices about your coverage. Coverage Fox is here to help simplify this process by providing clear explanations and personalized guidance.

This glossary offers essential health insurance vocabulary in easy-to-understand language, helping you find the right plan that fits your needs and budget.

Affordable Care Act (ACA)

The federal law signed in 2010 that expanded health coverage to more people through marketplace plans, Medicaid expansion, and consumer protections. The ACA prevents insurers from denying coverage based on pre-existing conditions.

Benefits

The services and treatments your health plan covers, including doctor visits, hospital stays, and prescription drugs.

Claim

An insurance claim is a request submitted by you or your healthcare provider to your insurance company, asking for payment for services covered under your plan.

COBRA

A federal program allowing adults and families to temporarily continue employer-sponsored group health plan coverage after leaving a job, typically for up to 18 months.

Employers with 20 or more employees are required to offer COBRA continuation coverage and must provide notices to eligible employees.

Additionally, the ACA’s employer mandate requires businesses with 50 or more full-time equivalent employees to offer affordable health insurance that meets minimum value standards.

Coinsurance

Your share of costs for covered services after meeting your deductible, expressed as a percentage. If your coinsurance is 20%, you pay 20% while insurance covers 80%.

Coordination of Benefits (COB)

Rules determining which insurance plan pays first when you have coverage from multiple programs.

Copay or Copayment

A fixed amount you pay for specific health care services, such as a set fee for doctor visits or prescription drugs.

Deductible

The amount you must pay out of pocket each year before your insurance begins covering costs. Preventive care is typically free before meeting your deductible.

Dependent

A spouse or child under age 26 who qualifies for coverage under your health plan.

Effective Date

The date your health coverage begins.

Emergency Care

Immediate treatment for serious conditions that could cause permanent harm without prompt attention.

Essential Health Benefits (EHB)

Ten categories of services all ACA marketplace plans are required to cover, including hospitalization, maternity care, mental health services, and prescription drugs.

Exclusive Provider Organization (EPO)

A plan type requiring you to use in-network providers except for emergencies.

Explanation of Benefits (EOB)

A document from your insurance company explaining the billed amount, the payment made, and any remaining balance you owe after a claim is processed.

Family Health Plan

Coverage for you and your eligible dependents under one policy.

Flexible Spending Account (FSA)

An employer-sponsored account allowing you to pay for eligible health care costs with pre-tax dollars.

Formulary

Your plan’s list of covered prescription drugs, organized by tiers with varying copays.

Generic Drug

A lower-cost medication with the same active ingredients as a brand-name drug.

Health Insurance Marketplace

The federal or state site where you can compare and enroll in ACA plans, also called an exchange.

Health Insurance Portability and Accountability Act (HIPAA)

Federal law protecting the privacy of your health information.

Health Maintenance Organization (HMO)

A plan requiring you to choose a primary care provider and get referrals to see specialists.

Health Savings Account (HSA)

A tax-advantaged account designed to help you save money for medical expenses, typically available when you have a high-deductible health plan.

In-Network

Providers contracted with your insurer, offering lower costs than out-of-network care.

Individual Health Plan

Health coverage for one person, purchased through the marketplace or directly from insurers.

Inpatient Care

Treatment requiring overnight hospital admission.

Medicaid

A health coverage program jointly managed by federal and state governments that provides low-cost or no-cost insurance to eligible people with limited income.

Medicare

Federal health insurance for beneficiaries age 65 and older or those with certain disabilities.

Network

The group of doctors, hospitals, and pharmacies contracted with your insurance company.

Non-Covered Service

Treatment or care your plan doesn’t pay for.

Open Enrollment Period

The annual time when you can enroll in or change marketplace coverage, typically November 1 through December 15.

Out-of-Network

Providers without an insurance contract, resulting in higher costs for you.

Out-of-Pocket Costs

Expenses you pay directly, including deductibles, copays, and coinsurance.

Out-of-Pocket Maximum or Out-of-Pocket Limit

The most you pay annually for covered services before insurance covers 100% of remaining costs.

Outpatient Care

Medical services not requiring overnight hospitalization.

Pre-Existing Condition

A health condition you had before coverage began. Under the ACA, insurers cannot deny coverage or charge more due to pre-existing conditions.

Preferred Provider Organization (PPO)

A plan offering more flexibility to see specialists without referrals and receive some out-of-network coverage.

Premium

The monthly amount you pay for health insurance, regardless of whether you use services.

Premium Tax Credit

A subsidy reducing monthly premiums for eligible individuals and families with income between 100-400% of the Federal Poverty Level.

Prescription Drug List (PDL)

Another term for formulary, listing covered medications and their cost-sharing tiers.

Preventive Care

Free services like vaccinations, screenings, and wellness visits designed to prevent illness.

Primary Care Provider (PCP)

Your main doctor for routine care and referrals to specialists.

Prior Authorization or Preauthorization

Approval required from your insurer before receiving certain services or medications.

Qualifying Life Event

A change in life circumstances—like job loss, marriage, or having a baby—that triggers a Special Enrollment Period.

Referral

A recommendation from your PCP to see a specialist, required by some plan types.

Special Enrollment Period

A time outside Open Enrollment when you can enroll due to a qualifying life event.

Specialist

A doctor focused on specific conditions or body systems, such as a cardiologist or dermatologist.

Subsidy

Financial support reducing your health insurance costs, including premium tax credits and cost-sharing reductions.

Summary of Benefits and Coverage (SBC)

A standardized document providing details about what a plan covers and costs.

Urgent Care

Treatment for conditions needing prompt attention but not emergency services.

Utilization Management (UM)

Processes insurers use to ensure appropriate, cost-effective care delivery.