Advanced Premium Tax Credit (APTC)
A tax credit you can take in advance to lower your monthly health insurance premium (payment). At the time you apply for coverage with Health Insurance Marketplace, you estimate your expected income for the year. If you do in fact qualify for a premium tax credit based on your estimate, you can use any amount of the credit in advance to lower your premium.
If amount of the Advanced Premium Tax Credit you’ve taken is more than you’re actually due based on your final income, you’ll have to pay back the excess when you file your federal tax return. If you’ve taken less than you qualify for, you’ll get the difference back.
Affordable Care Act (ACA)
The comprehensive health care reform law that was enacted in March 2010. Major requirements of the ACA were ratified in 2014 to include things like no denial of coverage because of preexisting conditions, not charging more for preexisting conditions, safeguarding that all qualifying plans provide basic essential health benefits, banning annual and lifetime caps on essential benefits, preventing insurers from dropping customers if and or when they become sick, and providing covered preventive care services.
A limit as to the amount of benefits your insurance company will pay per year while you’re enrolled in a particular health insurance plan. Limits are sometimes placed on certain services such as prescriptions or hospitalizations. Annual or yearly limits may be placed on the either the dollar amount of covered services or on the number of visits covered for a specific service or services. After your annual limit is reached, you will be responsible for all associated health care costs for the rest of the year.
A maximum amount of benefits your insurance company will pay in a year while you’re enrolled in their health insurance plan. Annual or yearly limits may be placed on the either the dollar amount of covered services or on the number of visits covered for a specific service or services
The portion of the bill the insurance will pay after the deductible is met; anywhere you see coinsurance, deductible applies first.
A copay is a flat dollar amount you pay for a service; typically these are for doctor visits (family, primary care physician (PCP), Specialist (SPC), pediatrician, etc. or prescriptions.
The sharing of costs covered by your insurance that you pay out of your own pocket. This generally includes deductibles, coinsurance, and copayments, or similar charges. It doesn’t, however, include premiums, balance billing amounts for non-network providers, or the cost of non-covered services. Cost sharing with Medicaid and CHIP also includes your premium costs.
Deductible is the amount you pay first for many services (per calendar year); typically applies to hospital stays, outpatient surgeries, x-rays, diagnostic testing, etc… REMEMBER when there’s no copay, everything usually applies to the Deductible. You must reach the Deductible before the Insurance begins to pay the coinsurance.
The spouse and or/ children that relies on an insured parent, spouse for insurance coverage; children may remain on a parent’s health insurance plan through age 26 under the Affordable Care Act.
Essential Health Benefits
A set of 10 categories of services health insurance plans must cover under the Affordable Care Act. Here is a list of the 10 essential health benefits and what they mean.
- Prescription Drugs – The federal government has categorized approved prescription drugs. One from each category must be covered.
- Pediatric Services – This includes dental care, vision care, well-child visits, vaccinations, and immunizations. Dental (2 routine exams) and vision care (1 yearly exam with corrective lenses) must be offered to children through the age of 18.
- Preventive and Wellness Services and Chronic Disease Management – Includes counseling services and other services like counseling, cancer treatment, diabetes screenings, physicals, asthma treatments and vaccines.
- Emergency Services – A trip to the emergency room where you truly need care as soon as possible. This also means that if the hospital is out of network you won’t be penalized.
- Hospitalization – Any inpatient care treatment you receive staying in the hospital. Plans may have a coverage limit for extended stay.
- Mental Health and Addiction Services – Behavioral health treatment to include providing counseling and/or provide psychotherapy.
- Pregnancy, Maternity, and Newborn Care – Services that care for you and your baby before, during, and shortly after giving birth.
- Ambulatory Patient Services – Care you receive at a hospital without being admitted. Most health insurance plans already provided this coverage prior to the ACA, because it’s the most common form of healthcare.
- Laboratory Services – Any testing used to diagnose, gauge effectiveness of treatment, and some preventive screenings.
- Rehabilitative and Habilitative Services and Devices – Services that help you recover if you have been injured, have a disability, or have a chronic condition. Providing at least 30 physical and/or occupational therapy visits, chiropractic visits, at least 30 speech therapy, cardiac, and pulmonary rehab visits.
A platform through which individuals may purchase health insurance plans, also known as a “marketplace”. State-based and federally facilitated health insurance exchanges were created as a result of the Affordable Care Act (ACA). The public exchanges provide consumers with tax credits and subsidies that help lower their premium payments. Private health insurance exchanges may be set up by employers and health insurance companies. However, these exchanges do not provide access to subsidies and tax credits; but they may offer consumers additional coverage options such as dental and vision.
Prior to 2019, qualifying individuals could be excused from obtaining minimum essential coverage due to some life events, financial hardship and other circumstances. Otherwise you had to pay a tax penalty. Application for exemption was required in many cases. As of 2019 you no longer need exemption if you choose to not obtain an ACA – qualifying major medical plan and also the tax penalty no longer applies.
EOB (Explanation of Benefits)
An EOB known as your explanation of benefits is a statement sent by your health insurance carrier explaining how a claim is processed. It list treatments and services that were paid on your behalf & what you may owe the provider, if any. Many carriers now have them available on your Member site online. However, some carriers will still send statements in the mail.
A predetermined insurance benefit amount paid on a per-period or per-incident basis, despite the total charges incurred for eligible medical expenses from the provider.
The requirement that health plans must allow you to enroll regardless of your health status, age, gender, or other factors that might predict the use of health services. Guaranteed issue doesn’t limit how much you can be charged if you enroll in some states.
The requirement that, as long as you continue to pay premiums, your health insurance issuer must offer to renew your policy. In some states, guaranteed renewal does not limit how much you can be charged if you renew your coverage.
High Deductible Health Plan
A plan with a higher deductible than a traditional insurance plan. The monthly premium is usually lower, but you pay more healthcare costs yourself (the deductible) before the insurance company starts to pay its share.
A plan that will pay a predetermined fixed amount for services covered by the plan. Typically, you pay the medical bill and the insurance company reimburses you directly. There are normally no network restrictions and you can choose a doctor or hospital you want.
A requirement that all individuals obtain the minimal and essential health insurance coverage or pay a tax penalty. But as of 2019 this has been repealed and no longer applies.
The dollar amount at which the insurance company stops paying for covered expenses in a person’s lifetime. The plan member must then pay for the additional costs, should medical charges exceed this amount.
Lump Sum Benefit
A single payment of benefits up to the cost of the covered medical expense or up to the maximum benefit associated with your coverage, whichever amount is lower.
A shopping and enrollment service for medical insurance that was created by the Affordable Care Act (ACA) in 2010. In most states, the federal government runs the Marketplace (also known as the “exchange”) for individuals and families. On the web, it’s found at HealthCare.gov.
A process the insurance companies use to verify your health status when you’re applying for health insurance coverage to decide whether to offer you coverage, at what price, and with what exclusions or limits if any.
Minimum Essential Coverage (MEC)
Plans that meet the ACA’s basic provisions. These plans include those sold on the state-based and federally facilitated health insurance exchanges as well as some sold in the private market. Qualifying minimum essential coverage includes:
- Job-based plans
- Health Insurance Marketplace plans
- Most individual plans bought outside the Marketplace
- The Children’s Health Insurance Program (CHIP)
- Plans sold through the Small Business Health Insurance Program (SHOP) Marketplace
The facilities, providers and suppliers your health insurer or plan has contracted with to provide healthcare services.
Non-ACA Health Plan
Health insurance products, such as renewable short-term health plans, that don’t comply with Affordable Care Act standards allowing discrimination against consumers with preexisting conditions.
The informal name for the comprehensive health care reform law that was enacted in March of 2010 by then President Barack Obama, the Patient Protection and Affordable Care Act (PPACA) is often referred to as the Affordable Care Act or ACA.
The yearly period during which you can buy exchange-based individual major medical health insurance plans for themselves and their families.
Out of Pocket
Expenses for medical care that your insurance will not reimburse you for. These costs include any service not covered by your insurance as well as any deductibles, coinsurance, and co-payments for covered services.
Maximum you will pay for medically necessary claims in a calendar year (including deductible and copays for most plans).
Any medical condition such as cancer, asthma, or diabetes that exists prior to the date that new health coverage starts.
Routine healthcare that includes screenings such as Pap smears and mammograms, check-ups, immunizations, and patient counseling to prevent illnesses, disease and other health problems.
Qualifying Events are events that will allow you, your spouse, or dependents to enroll into the plan other than your open enrollment month. Examples: marriage, birth, adoption, divorce, loss of spousal coverage. An employee has 30 days from the date of the qualifying event to add self/spouse/dependent to the plan. Don’t wait until you have received a social security number for a new baby to add them because it will typically be longer than 30 days until you receive the number.
SBC (Summary of Benefits and Coverage)
An SBC known as a summary of benefits and coverage is guided by Healthcare Reform. It highlights medical coverage, cost, limitations and expectations as well as common scenarios such as – having a baby, managing diabetes, etc.
A plan usually provided by larger companies, where the employer itself collects premiums from enrollees and takes on the responsibility of paying employees’ and dependents’ medical claims.
Shared Responsibility Payment
A tax penalty created by the Affordable Care Act (and in some cases by state laws). There are two types of shared responsibility payments:
- Employer Shared Responsibility – A tax penalty imposed on businesses with 50 or more full-time employees if the businesses does not offer affordable health insurance benefits, or if the benefits offered do not provide minimum value.
- Individual Shared Responsibility – A tax penalty imposed on individuals who didn’t have health insurance between January 1, 2014 and December 31, 2018. This was eliminated in 2019.
Short Term Health Insurance
A policy that provides medical coverage for a limited period of time, usually no longer than 12 months.
Special Enrollment Period
Limited time outside of the standard open-enrollment period in which consumers could be eligible to enroll in a health insurance plan and is typically only available within 60 days of the event.
Special Enrollment Qualifying Event
Life changing events `such as getting married, having a baby or moving.
Income-based financial assistance available to those who buy an insurance plan from state-based and federally facilitated exchanges and who earn up to 250 percent of the federal poverty level.
Third Party Administrator / TPA
A company or an individual that is contracted by the insurance carrier to perform some aspect of its operation, such as claims processing.
Wellness exams are covered at 100% because they are known to be a preventive maintenance. However, if you received a diagnosis while at your wellness exam it is no longer considered a wellness visit. If you receive lab work done monthly to prevent something within a diagnosis it is not considered preventive lab or wellness because a diagnosis is associated with it. For Example: If you have lab work done to manage your diabetes it would not be covered as preventive or wellness.