Health Benefits Glossary
Sometimes it feels like you need a PhD to understand your health insurance plan. Our health benefits glossary is here to make it less confusing.
Sometimes it feels like you need a PhD to understand your health insurance plan. Our health benefits glossary is here to make it less confusing.
An allowed amount is the maximum amount a health insurance plan will pay for a covered healthcare service. It is also called an “eligible expense,” “payment allowance,” “negotiated rate,” or “maximum allowed amount.”
Often, allowed amounts are lower than the fee a provider charges for a service. This affects how much is counted toward your deductible and what you can be reimbursed for if your provider is out-of-network.
For example, let's say you have an appointment and your out-of-network provider charges $200. If the insurance company's allowed amount for that service is only $150, then that $150 would be applied toward your out-of-network deductible when you make a claim, even though you paid $200 for it. Once you've met your deductible for the year, you are responsible for a percentage of your expenses (coinsurance). Let's say your coinsurance rate is 50%. You might think your insurance would pay the full 50% of the $200 fee (a $100 reimbursement). But because the insurance company's allowed amount is only $150, your reimbursement would actually be $75, or 50% of the allowed amount.
Estimating your reimbursement for out-of-network services can be tricky, because there is no universal standard for allowed amounts between different insurance companies and plans. Some insurance companies might pay $100 for a service while another only will pay $75. Insurers generally do not publish their allowed amounts online where you can easily find them.
For more information and examples, check out our blog post on how allowed amounts affect reimbursements.
An appeal is a request to your health insurance company to review a decision that denied a benefit or payment.
Balance billing happens when a (usually out-of-network) provider bills you for the difference between the provider’s charge and the allowed amount. For example, if the provider’s charge is $200 and the allowed amount is $140, the provider has the right to bill you for the extra $60 that your insurer did not cover.
A claim is a request for payment that you or your healthcare provider submits to your health insurance when you get items or services you believe are covered.
Coinsurance is the percentage of an item or service's cost you pay after you've paid your deductible.
Let's say your provider charges $200 for an office visit and your health insurance plan's coinsurance is 20%. If you've met your deductible, you pay 20% of $200, or $40. The insurance company pays the rest. If you haven't met your deductible, you pay the full amount, $200.
Go deeper: The Complete Guide to Out-of-Network Reimbursement
A copayment is a fixed amount you pay for a covered healthcare service after you’ve paid your deductible. Often referred to as a "copay."
Let's say your doctor charges $200 for an appointment. Your health plan has a copayment of $20 for an office visit. If you've met your deductible, you pay $20 for the doctor's visit, usually at the time of the visit. If you haven't met your deductible, you pay $200, the full amount for the visit.
With cost sharing, you and your health insurance company each pay a portion of your health care costs. If you receive a service or procedure that's covered by a health or dental plan, you "share" the cost by paying a copayment, or a deductible and coinsurance.
Courtesy billing is when an out-of-network healthcare provider files a claim for reimbursement on their patient’s behalf.
A covered service is any medical services, drugs, supply or equipment your insurance plan covers fully, or in part. In-network services are generally covered, while out-of-network services can be covered, depending on your plan. The amount that your insurance plan covers depends on your plan benefits.
Current Procedural Terminology (CPT) codes are the standard language health care professionals and insurers use to denote medical goods and services. They’re used when filing claims to let insurers know what items or services a patient has received.
A deductible is the amount you pay for covered healthcare services before your insurance plan starts to pay.
Let's say your health plan has a $2000 deductible. This means you pay the first $2000 of covered services each year before your insurance kicks in. This is often referred to as having "met" your deductible.
Certain services, like preventive visits, are typically covered by insurance before you meet your deductible. After you have met your deductible, you usually pay only a copayment or coinsurance for services, and your insurance pays the rest.
A denial is when an insurance claim is rejected because the service was not covered or the insurer found an error in the claim.
An encounter form is an alternative or outdated term for a superbill.
An excluded service is a healthcare service that your health insurance does not pay for or cover.
An exclusive provider organization (EPO) is a managed health insurance plan where only in-network services are covered, except in emergencies.
An EPO is more restrictive than a preferred provider organization (PPO) plan. It usually has less or no coverage or reimbursement for out-of-network providers. An EPO plan typically costs less than a PPO plan.
An explanation of benefits (EOB) is a statement from your health insurance plan describing what costs it has covered and what costs you may need to pay.
A family health insurance plan can be shared by spouses and any of their dependents under the age of 26.
The family pays one premium a month, and although this premium is higher than in an individual plan, a family plan usually ends up being cheaper per person than multiple individual plans.
A good faith estimate is an estimate of the costs of medical services a patient without insurance will receive. Healthcare providers are required by law to provide this if you are not using insurance to pay.
A health maintenance organization (HMO) is a type of health insurance plan in which coverage is limited to care from doctors who work for or contract with the HMO. HMO plans typically offer lower costs than other types of plans, but have a more restrictive provider network. HMOs provide integrated care and focus on prevention and wellness.
With an HMO, you must coordinate your medical care through a primary care physician (PCP). This means you need a referral to see a specialist.
HMO plans generally only cover out-of-network care in emergencies. An HMO may require you to live or work in its service area to be eligible for coverage.
In-network refers to the facilities, providers, and suppliers your health insurance has a contract with to provide healthcare services, as opposed to out-of-network.
When healthcare providers and facilities accept your insurance, that means they are part of your health insurance's network, or in-network. These are sometimes called "participating providers" or "network providers."
As a patient, your costs are often lower when you use in-network providers. You can search for in-network providers on your health insurance plan's website, or ask the provider if they accept your insurance. If you’re unable to find an in-network provider for your needs, check whether your health plan has out-of-network benefits.
Also called an insurance payer, an insurer is the company that manages your health insurance plan. They pay for the services they’ve agreed to cover in your plan details.
International Classification of Diseases (ICD) codes are the standard language health care professionals use to classify illnesses and diseases. They are also referred to as "diagnosis codes."
The ICD changes their list of codes every few years. The current version is ICD-10, and ICD-11 codes are being phased in.
A National Provider Identifier (NPI) is an ID number for covered healthcare providers in the U.S.
NPI numbers were created to help send health information electronically more quickly and effectively. Covered health care providers, all health plans, and health care clearinghouses must use NPIs in their administrative and financial transactions.
A network exception is a tool health insurance companies use to compensate for gaps in their network of contracted healthcare providers. It is also known as a gap exception or a network deficiency.
With a network exception, you pay in-network prices for out-of-network services. You might receive one because your network does not have a specialist you need in your area.
The No Surprises Act (NSA) is U.S. legislation that took effect January 1, 2022. It aims to protect patients from surprise medical bills.
The NSA protects people covered under group and individual health plans from receiving surprise medical bills for the following services:
Out-of-network (OON) refers to facilities, providers, and suppliers that your health insurance doesn't have a contract with to provide healthcare services, as opposed to in-network.
If your provider is out-of-network (OON), your health insurance may still reimburse you for a portion of your healthcare expenses. These are called out-of-network benefits. Some health plans offer these benefits, and others do not. To check your OON benefits, contact your insurer or use SuperBill's free Out-of-Network Benefits Calculator.
Note: For emergency medical care, insurance companies are required by law to cover services, even if a provider or facility is OON.
When healthcare providers and facilities do not accept your insurance, they are out-of-network (OON). These are sometimes called "non-preferred" providers.
Out-of-network reimbursement is getting money back for out-of-network services that you have paid for. The reimbursement is paid by your insurer, after you file a reimbursement claim.
Go deeper: The Complete Guide to Out-of-Network Reimbursement
Out-of-network (OON) services are healthcare services rendered by a provider who is outside your network. OON services are generally paid out of the patient’s pocket. To have your insurer reimburse those costs, you must file a reimbursement claim for them after paying.
An out-of-pocket cost is a healthcare expense that is not paid for by your insurance. These costs include deductibles, coinsurance, copayments, plus costs for services that aren't covered by your plan.
Your out-of-pocket maximum is the most you have to pay for covered healthcare services in a plan year. After you spend this amount on deductibles, copays, and coinsurance, your health plan pays 100% of the costs of covered services.
Plan details (or plan document) refers to a document that contains a full list of services your health insurance plan covers. It can usually be found on your insurer’s website. You usually have to login to your online account to access your plan details.
A point of service (POS) plan is a type of health insurance plan in which you pay less if you use in-network providers. With POS plans, you are required to get a referral from your primary care provider (PCP) in order to see a specialist.
A preferred provider organization (PPO) plan is a type of health insurance plan that contracts with medical providers to create a network of participating providers.
PPOs often have higher monthly premiums in exchange for the option to use providers both in- and out-of-network without a referral. When you have a PPO plan, you typically pay less if you use in-network providers, but you may use doctors, hospitals, and providers outside of the network for an additional cost if your plan allows.
Out-of-pocket medical costs can also be higher with a PPO plan.
The amount you (and/or your employer) pay for your health insurance every month.
A primary care provider (PCP) is a provider who practices general medicine, usually your first stop for medical care. This can also be a "primary care physician" or "primary care practitioner."
This is a provider who can help manage a wide variety of healthcare needs. This includes routine or preventive care like physicals, screenings and immunizations. They can also diagnose, treat and manage many chronic conditions and provide care when you have a minor illness or injury. They may refer you to a specialist for more in-depth care for a condition.
Common types of PCPs include:
Prior authorization is approval that your insurer may require before you receive a medical service, in order for the service to be covered by your plan.
Sometimes this is shortened to prior auth, or called "precertification" or "prior approval."
A healthcare provider is a person or entity that provides medical care or treatment.
Common types of providers are doctors, nurse practitioners, therapists, psychiatrists, dietitians, physical therapists, labs, clinics, hospitals, medical supply companies, and other professionals, facilities, and businesses that provide healthcare services.
A referral is a written order, usually from your primary care provider (PCP), for you to see a specialist or get certain medical services.
A specialist is a provider who focuses on a specific area of health or a group of patients to diagnose, manage, prevent, or treat certain types of symptoms and conditions.
Common types of specialists include:
A Summary of Benefits and Coverage (SBC) is a short, plain language summary of a health insurance plan. It describes benefits and coverage of a range of services. It includes examples that show you what the plan would cover in two common medical situations: diabetes care and childbirth.
You might use this to compare plans when shopping for health insurance. All health plans must provide the SBC at important points in the enrollment process, like when you apply for or renew your policy.
A superbill is an itemized statement of out-of-network services that have been provided to a patient. Superbills are used by health insurance companies to process claims.
Go deeper:
Verification of benefits (VOB) is when a provider checks a patient's insurance to see if they have coverage for services. This is normally done before getting healthcare services to ensure it will be covered or can be reimbursed. This helps the patient know what to expect for their costs.
For example, if you see a new therapist who does not accept your insurance plan, they may conduct a VOB before you begin therapy to see if you have out-of-network coverage and can get reimbursed. If you do not have coverage, you will be responsible for the entire cost out-of-pocket.
If you’d like to verify your own benefits, SuperBill has a free, easy-to-use VOB tool! In seconds, you can see your out-of-network deductible, progress toward that deductible, coinsurance rates, and a reimbursement estimate for certain services. To try the tool, create an account at www.thesuperbill.com.
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