Deductible

The amount of out-of-pocket expenses that must be paid for health services by the insured before becoming payable by the carrier. Most common in major medical policies, but also found in basic policies. See also Family Deductible; First Dollar Coverage.

Deductible Carryover

A feature whereby covered charges in the last three months of the year may be carried over to be counted toward the next year’s deductible.

Dental Care Benefits

Dental insurance plans usually cover preventive care and treatment of teeth, gums and the mouth. Some plans may also cover orthodontia, X-rays and cosmetic work. Dental care benefits are considered a part of health care benefits, but insurance plans generally separate the two.

Dependant

A dependant is your spouse or child. Any person who is in the armed forces full-time is not eligible as a dependant.

Dietitian

An expert in "Food" and "Nutrition" Dietitians help promote good health through proper eating. They also supervise the preparation and "Foodservice" service of food, develop modified "Diet (nutrition)" diets, participate in "Research", and educate individuals and groups on good nutritional habits. Artificial nutritional provision to patients not able for normal oral intake and dietary modification to address medical issues involving dietary intake is a major part of dietetics. The goals of the dietary department are to provide medical nutritional intervention, obtain, prepare, and serve flavorsome, attractive, and nutritious food to patients, family members, and health care providers.

Disability

A condition that renders an insured person incapable of performing one or more duties of his or her regular occupation. Benefit plan definitions of disability vary. The Social Security Act defines disability as follows: (Total disability is the) inability to engage in any substantial, gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or has lasted or can be expected to last for a continuous period of not less than 12 months (and which precludes the claimant from performing not only his previous work, but considering his age, education and work experience any other kind of substantial gainful work which exists in the national economy regardless of whether such work exists in the immediate area in which he lives, or whether a specific job vacancy exists for him, or whether he would be hired if he applied for the work).

Disability Benefit

Periodic payments, usually monthly, payable to participants under some retirement plans if such participants are eligible for the benefits and become totally and permanently disabled prior to the normal retirement date. Includes short-term and long-term disability benefits.

Disability Income Insurance

A form of health insurance that provides periodic payments to replace a certain percentage of income lost when the insured is unable to work as a result of illness, injury or disease.

Disability Management

The proactive employer-centered process of coordinating the activities of labor, management, insurance carriers, health care providers and vocational rehabilitation professionals in order to minimize the impact of injury, disability or disease on a worker’s capacity to successfully perform his or her job.

Disclosure

The requirement of plan administrators to distribute or make available to plan participants and/or other beneficiaries materials such as summary plan descriptions and annual reports.

Dismemberment

The loss, or loss of use, of a limb or loss of sight from an injury.

Double Indemnity

A provision under which certain benefits are doubled when accident is due to specified circumstances, such as public conveyance accidents; in a life insurance policy, a provision that the face amount payable on death will be doubled if the death is the result of an accident.

Effective Date

The date on which an insurance policy or retirement plan goes into effect and coverage begins. Also, the date pay increases go into effect.

Eligibility Date

The date an individual and/or dependents become eligible for benefits under an employee benefit plan.

Eligibility Period

A period of time, usually 31 days, when potential members of a group life or health insurance plan can enroll without evidence of insurability.

Eligibility Requirements

Conditions that an employee must satisfy to participate in a plan or obtain a benefit.

Emergency Medical Services

Treatment of patients suffering from accidents or sudden and serious illness.

Employee

An individual who is compensated for services performed and whose duties are under the control of an employer.

Employee Assistance Program

An employment-based health service program designed to assist in the identification and resolution of a broad range of employee personal concerns that may affect job performance. These programs deal with situations such as substance abuse, marital problems, family troubles, stress and domestic violence, as well as health education and disease prevention. The assistance may be provided within the organization or by referral to outside resources.

Employee Benefit Plan

A plan established or maintained by an employer or employee organization, or both. The purpose is to provide employees with a certain benefit such as pension, profit-sharing, stock bonus, thrift, medical, sickness, accident or disability benefits.

Employee Benefits

A collection of nonwage compensation elements, including but not limited to, income protection, services and income supplements for employees, provided in whole or in part by employer payments.

Employee Contributions

Made by an employee into a plan. May or may not be required for participation. See also Contributory Plan; Voluntary Contribution.

Employee-Pay-All Plan

One in which employees pay all costs for the plan; the employer does not make any contributions.

Employer

Any person acting directly as an employer, or indirectly in the interest of an employer, in relation to an employee benefit plan. The term also includes a group or association of employers acting for an employer in such capacity.

Endodontics

Endodontics is the name given to a specialised field of dentistry that is concerned with the inner workings of the tooth. Endodontists are usually dentists who have decided to specialise in this field and have taken additional training to become qualified. Root canal therapy is one of the most common dental treatments in the field of endodontics.

Enrolled Group

Persons with the same employer, or with membership in an organization in common, who are enrolled in a health plan. Usually, there are stipulations regarding the minimum size of the group and the minimum percentage of the group that must enroll before the coverage is available.

Enrollment

Any process by which an individual and/or dependents become subscribers to health plan coverage, flexible benefit plans, etc. May be done either through an actual “signing up” of the individual, by virtue of a collective bargaining agreement or by conditions of employment.

Expected Claims

The claims forecast for a group or covered person. The expected claims level becomes the breakeven point with respect to expected premium for a period of coverage.

Experience

Usually expressed as a ratio or percentage, it is the relationship of premium to claims, coverage or benefits of a plan for a specified period of time.

Experience Rating

The process of determining the premium rate for a group risk, wholly or partially on the basis of that group’s experience.

Experience Study

An actuarial analysis of the plan’s experience in membership age, sex, salary and service giving effect to the assumed rates of mortality, disability, employment turnover, investment earnings and other cost factors.

Expiration Date

The last day on which a stock option may be exercised. The date the insurance master contract expires or the date an individual or employee ceases to be eligible for coverage.

Explanation of Benefits

A statement from the insurer sent to a group member who files a claim giving specific details about how and why benefit payments were or were not made. It summarizes the charges submitted and processed, the amount allowed, the amount paid, and the subscriber balance, if any.

Extended Benefits

Comprehensive benefits provided in excess of basic health care plans. Extension of benefits for limited periods after termination of plan coverage. Extension of unemployment compensation benefits during periods of high unemployment.

Fee Schedule

A listing of fees or allowances for specified medical procedures, which usually represents the maximum amounts the program will pay for specified procedures.

Full-Time Employees

Employees of an employer who work for 1,000 or more hours in a 12-month period or employees who usually work 40 hours per week.

Fully Insured Plan

A group insurance plan in which an insurer pays all claims and assumes all risks for an employer in exchange for payment of a regular premium. Separate contracts are issued on the life of every employee.

General Death Benefit

A benefit payable under a group term life insurance plan on the death of an employee, without special conditions.

Generic Equivalent Drugs

Prescription drugs that are equal in therapeutic power to the brand-name originals because they contain identical active ingredients at the same doses.

Graduated Benefits

Health care or other employee benefits plans in which the amount contributed by the employer is determined by the number of years the worker has been employed by the company, so shorter-term workers pay more for their coverage than those who have been with the company for many years.

Grandfather Clause (Grandfathering)

An exception to a restriction that allows all those already doing something to continue doing it even if they would be stopped by the new restriction.

Group Contract

A contract of insurance made with an employer or other entity that covers a group of persons identified by reference to their relationship to the entity buying the contract: e.g., members of a trade association, employees of a common employer, members of a labor union; or members of some other group or association not formed for the purpose of buying insurance.

Group Universal Life Plan

A form of group life insurance that combines term protection for designated beneficiaries with an investment element for the policyholder, which can be used to create nontaxable permanent insurance or to accumulate tax-deferred capital. Participation is entirely voluntary and all premiums are paid by the employee.

Health Care Cost Trend Rate

An assumption about the annual rate of change in the cost of health care benefits currently provided by the postretirement benefit plan, due to factors other than changes in the composition of the plan population by age and dependency status, for each year from the measurement date until the end of the period in which benefits are expected to be paid. Considers estimated health care inflation, changes in utilization and delivery patterns, advances in technology and changes in health status of plan participants. Different health care services may have different trend rates.

Health Care Flexible Spending Account

Allows employees to set aside pretax funds for eligible health care benefits such as physical exams, vision care and dental care, including deductibles and copayments. See also Flexible Spending Accounts (FSAs).

Health Care Provider

An individual or institution that provides medical services (e.g., a physician, hospital, laboratory, etc.). This term should not be confused with an insurance company which “provides” insurance.

Health Insurance

Protection that provides payment of benefits for covered sickness or injury. Included under this heading are various types of insurance, such as accident insurance, disability income insurance, medical expense insurance, and accidental death and dismemberment insurance.

Homeopathy

An alternative medical system that treats the symptoms of a disease with minute doses of a drug that produce the same symptoms in a healthy person as are present in the disease. This is thought to stimulate physiological defenses against the symptoms of the disease. Homeopathy as a formal system of medicine is no longer practiced in the United States. However, it may be informally practiced as an alternative therapy.

Hospice

Health care facility or program providing medical care and support services, such as counseling, to terminally ill persons and their families.

Hospital

A legally constituted institution having organized facilities for the care and treatment of sick and injured persons on a resident or inpatient basis, including facilities for diagnosis and surgery under the supervision of a staff of one or more licensed physicians and which provides 24-hour nursing services by a registered nurse on duty or call. It does not mean convalescent, nursing, rest or extended care facilities or a facility operated exclusively for the treatment of the aged, drug addict or alcoholic, whether or not such facilities are operated as a separate institution by a hospital.

Hospital Benefit Plan

A plan that makes cash payments or reimburses employees for hospital charges up to a certain amount or assumes the costs for certain specified hospital charges such as room and board, services, drugs and supplies.

Hospital Indemnity Policy

A form of health insurance that provides a stipulated daily, weekly or monthly indemnity during hospital confinement. The indemnity is payable on an unallocated basis without regard to the actual expense of hospital confinement.

Income Averaging

A method of determining how much tax is owed on a lump-sum distribution from a qualified pension plan. An individual who receives such a distribution and includes it in taxable income may be eligible to treat the tax liability as if the distribution had been received over a five- or ten-year period. Certain requirements must be met.

Incurred but Not Reported

Claims that have been incurred but have not been reported to the insurer as of some specific date. Often a disputed figure since carriers must estimate this liability for accounting purposes based on their experience with claims lags.

Incurred Claims

Incurred claims equal the claims paid during the policy year plus the claim reserves as of the end of the policy year, minus the corresponding reserves as of the beginning of the policy year. The difference between the year-end and beginning of the year claim reserves is called the increase in reserves and may be added directly to the paid claims to produce the incurred claims.

Indemnify

Literally, “to save harmless.” Thus, one person or organization agrees to protect another against loss.

Indemnity

A benefit paid by an insurer for a loss insured under a policy.

Insurance

A means of providing or purchasing protection against some of the economic consequences of loss. Risk of loss is transferred to a third party in exchange for a “consideration” or premium. This exchange creates an insurance contract.

Insurance Contract

An irrevocable contract in which the insurance company unconditionally undertakes a legal obligation to provide benefits in return for a premium, thereby transferring risk from the employer (or the plan) to the insurance company.

Insurer

An organization, insurance company or other, that assumes the risk and provides the policy to the insured.

Job Description

A summary of a job’s purpose, listing its tasks, duties, responsibilities, and the skills, knowledge and abilities needed to perform the job competently. A job description describes and focuses on the job itself, not on any specific individual who might fill the job.

Key Employee

A criterion used to describe highly compensated officers or owners of companies and to establish whether a defined benefit pension plan is top-heavy; if it is, special requirements for vesting, contributions and benefits must be met to retain tax qualification. Before 2002, a key employee was a participant who, at any time during the plan year: (1) earned at least 50% of the dollar limitation for defined benefit plans (adjusted annually) and was an officer; (2) earned more than the dollar limitation for defined contribution plans (adjusted annually) and was one of the ten employees owning the largest interest in the employer; (3) owned more than 5% of the employer; or (4) earned more than $150,000 and owned less than 1% of the employer. After 2001, a key employee is a participant who at any time during the preceding year is described in (3) and (4) above or who is an officer and earns more than $130,000 (as indexed).

Key Employee Insurance

Protection of a business firm against the financial loss caused by death or disability of a vital member of the firm; a means of protecting the business from the adverse results of the loss of an individual possessing special skills or experience.

Licensure

The process by which an agency of government--usually state government--grants permission to an individual or organization to engage in a given occupation or business upon finding that the applicant has attained the competency necessary to ensure that the public health, safety and welfare will be reasonably well protected.

Life Insurance

A type of insurance that provides a sum of money if the person who is insured dies while the policy is in effect.

Long-Term Care

Includes all forms of services, both institutional and noninstitutional, that are required by all people with chronic health conditions, the elderly or those with physical disabilities who need help with activities of daily living. Long-term care is palliative only--relieving symptoms, but not effecting a cure.

Long-Term Care Benefit

An accelerated death benefit provided by some individual life insurance policies under which the insurer agrees to pay a monthly benefit to an insured who requires constant care for a medical condition.

Long-Term Care Insurance

A type of health insurance available through private insurers that covers long-term care nursing home care and long-term custodial care at home. Designed to prevent depletion of the policyholder’s assets.

Long-Term Disability

A disability that prevents a person from continuing in the occupation for which he or she was trained, lasting two years or more.

Long-Term Disability Income Insurance

Insurance issued to an employer (group) or individual to provide a reasonable replacement of a portion of an employee’s earned income lost through serious and prolonged illness or injury during the normal work career.

Loss of Benefits

An employee’s right to accrued benefits from personal contributions is not subject to forfeiture under any circumstances. However, a plan may provide for the forfeiture of vested benefits derived from employer contributions in the event of the employee’s death before retirement. This forfeiture rule does not apply if the employee continued to work after retirement eligibility and if a joint or survivor annuity was to be provided. A limited forfeiture may take place if a retiree returns to work for his or her employer (or returns to work in the same industry, in the case of a multiemployer plan).

Loss Ratio

The ratio of paid and incurred claims plus expenses to premium.

Loss Reserve

As stated on a financial statement, an amount representing the estimated liability for unpaid insurance claims (losses) that have occurred as of a given date. Includes losses incurred but not yet reported (IBNR), claims being adjusted and amounts known to be payable in the future (e.g., long-term disability). On an individual basis, loss reserve represents an estimate of the total amount ultimately to be paid out on that claim.

Magnetic Resonance Imaging

A noninvasive diagnostic procedure of imaging soft tissues using a powerful magnet and radio waves to produce computer-processed images of the inner body.

Major Medical Insurance

Supplementary insurance coverage (beyond basic medical) intended to cover the costs associated with a major illness or injury. Although characterized by large maximum limits, some limitations apply. The term can also refer to the catch-all portion of a medical plan that picks up payment for miscellaneous charges.

Mandatory Employee Contribution

A contribution that is made by employees in order to participate in the plan, share in employer contributions or in some way receive more favorable treatment than those not contributing.

Manual Rate

Premium rate for group insurance coverage from the company’s standard rate tables; based on the experience of an average group, not any particular group. It is used to determine the premium for a small group.

Master Contract

A life insurance policy that insures a number of people under a single insurance contract; a contract between an insurance company and a group policyholder in which the individuals insured are not parties to the contract.

Massage

The practice of soft tissue manipulation with physical, functional, and in some cases psychological purposes and goals.

Medical Insurance

Protection that provides benefits for the cost of any or all of the numerous health care services normally covered under various health care plans.

Medical Loss Ratio

An index which compares the costs of delivering health benefits with the revenues received by the plan.

Minimum Group

The least number of employees permitted by law to effect a group for insurance purposes; the purpose is to minimize risk and maintain some sort of proper division between individual policy insurance and the group forms.

Minimum Participation Rules

Numbers of employees to participate in most retirement plans. Usually at least 50 employees or 40% of the total number of employees enrolled.

Miscellaneous Hospital Expenses

A provision for the payment on a blanket basis or schedule basis of hospital services (other than room and board, special nursing care and doctor fees) up to a stipulated maximum amount. Also called ancillary charges.

Multiple Employer Group

A group of two or more employers that are not financially related.

Occupational Death Benefit

A benefit payable upon death of an employee resulting from his performance of an act or acts relating to the duties of his position in the employer’s service.

Occupational Therapist

A health professional who is trained in the practice of occupational therapy.

Occupational Disability Benefit

A benefit payable on account of disability arising out of and in the course of employment.

Open Enrollment

A period during which subscribers in a health benefit program have an opportunity to select an alternate health plan being offered to them; or a period when uninsured employees and their dependents may obtain coverage without presenting evidence of insurability.

Owner-Employee

Self-employed individual who owns the entire interest in an unincorporated business, or a partner who owns more than 10% of the capital or profit interest of the partnership. If the owner-employee established a plan just for his or her employees but does not cover himself or herself, the rules for qualification and tax treatment of contributions and benefits are the same as those plans established by corporate employers.

Osteopath

A practitioner of "Osteopathy", a system developed by Andrew Still in the United States of America and practiced throughout the world. osteopathic medicine is a complete system of healthcare with a philosophy that combines the needs of the patient with the current practice of medicine. Doctors of osteopathic medicine (DOs) practice a whole-person approach, which means they consider both the physical and mental needs of their patients.

Paid Claims

The dollar value of all claims paid (e.g., hospital, medical, surgical) during the plan year, regardless of the date that the services were rendered. Measures a plan’s performance.

Partial Disability

An illness or injury that prevents an insured person from performing one or more of the functions of his or her regular job.

Participation

Membership in a plan.

Participation Requirements

Most pension and other employee benefit plans provide that a new employee must wait a specified length of time before he or she is eligible to participate in the plan

Part-Time Employees

Refers to employees who work less than 1,000 hours for an employer in a year. Such employees may be kept from participating in qualified retirement plans.

Permanent Disability

Employee’s inability to work at any job, rather than at the specific job held at the time the disability was incurred. Permanent disability is typically covered by insurance for those employees who become disabled before reaching the age of 65.

Periodontics

Concerned with the diagnosis and treatment of gum disease known as periodontitis. Periodontists are also concerned with the implementation and maintenance of dental implants to replace missing teeth.

Physical Therapy

Treatment of disease and injury by physical means, including exercise, manipulation, electricity, heat, cold and water.

Physiotherapists

Physiotherapists treat patients with physical difficulties resulting from illness, injury, disability or ageing. They treat people of all ages including children, the elderly, stroke patients and people with sports injuries. Physiotherapists work with patients to identify and improve their movement and function. They help promote their patients' health and wellbeing, and assist the rehabilitation process by developing and restoring body systems, in particular the neuromuscular, musculoskeletal, cardiovascular and respiratory systems. They devise and review treatment programmes, comprising manual therapy, movement, therapeutically exercise and the application of technological equipment, e.g. ultrasound. Physiotherapists also provide advice on how to avoid injury.

Plan

An arrangement under which employer and employee contributions, if any, are deposited with a trustee who is responsible for the administration and investment of these monies and the income earned on accumulated assets of the fund, and who is normally responsible for the direct payment of benefits to eligible participants under the plan. Benefits are often paid by an insurance company with transfers from the trust fund as required. The trustee may be a corporate trustee (trust company) or an individual.

Plan Participant

Any employee or former employee of an employer, member or former member of an employee organization, sole proprietor, or partner in a partnership who is or may become eligible to receive a benefit of any type from an employee benefit plan, or whose beneficiaries may be eligible to receive any such benefit. See also Active Participant; Participation Requirements.

Plan Sponsor

The party that establishes and maintains the plan, which is (1) the employer, in the case of an employee benefit plan maintained by a single employer; (2) the employee organization, in the case of a plan maintained by an employee organization; or (3) the association, committee, joint board of trustees or other similar group of representatives of the parties involved, in the case of a plan maintained by one or more employers and one or more employee organizations.

Plan Suspension

An event in which the pension plan is frozen and no further benefits accrue. Future service may continue to be the basis for vesting of nonvested benefits existing at the date of suspension. The plan may still hold assets, pay benefits already accrued and receive additional employer contributions for any unfunded benefits. Employees may or may not continue working for the employer.

Plan Termination

When the plan ceases to exist and benefits are settled. Replacement with another plan is not a termination. ERISA requires that all accrued benefits (to the extent funded) must be fully vested upon the termination or partial termination of a plan. (A partial termination might result from a large reduction of the workforce or a sizable reduction of benefits under the plan.) (Canada) Voluntary or involuntary discontinuance of a plan.

Podiatry

A field of medicine devoted to the study and treatment of disorders of the foot and ankle. It is practiced by podiatrists.

Pre-Existing Condition

A physical and/or mental condition of an insured person that existed prior to the issuance of his or her policy. Some plans may cover these conditions after a waiting period of six months to a year, while others may permanently exclude a person with a preexisting condition from coverage.

Prescription Drug Formulary

A listing of prescription medications that will be covered by a plan or insurance contract that often fosters substitution of generic or therapeutic equivalents on a cost-effective basis.

Prescription Drug Plan

Usually a provision under medical coverage plans whereby the beneficiary can obtain prescription drugs without incurring potentially large out-of-pocket expense. Different types of prescription drug plans are available. Examples are discount plan, closed panel drug plan, service-delivered plan, mail-order plan and maintenance drug option with major medical plan.

Preventive Care

Comprehensive care emphasizing priorities for prevention, early detection and early treatment of conditions, generally including routine physical examinations, immunization and well-person care. See also Wellness (Health Promotion) Programs.

Primary Payer

The insurance carrier that has first responsibility under coordination of benefits.

Probationary Period

A specified number of days after the date of the issuance of the policy during which coverage is not afforded for sickness. The purpose of the period is to eliminate sickness actually contracted before the policy went into force.

Proof of Insurability

Also known as Evidence of Insurability; additional information required about a person’s health, job and lifestyle to decide if the requested coverage will be provided.

Qualification Period

The period of time between the beginning of a disability and the start of a policy’s benefits.

Qualified Disability Benefit

A disability benefit provided by a plan that does not exceed the benefit that would be provided if the participant separated from service at normal retirement age

Quality of Care

Refers to the degree of success by which a medical provider increases the probability of desired patient outcomes and reduces the likelihood of undesired patient outcomes, given the state of medical knowledge. Quality of care is dependent on the training, credentialing and experience of medical providers. Measurements for quality of care can include preventive services, death rates, surgery rates, inpatient stays, outpatient utilization, use of drug therapies and survival rates for catastrophic illness.

Rating

The process that determines how much a particular package of benefits will cost and what will be charged (premium) to cover those expected costs for a specific group of people.

Reasonable and Customary (R&C) Charge

The prevailing charge made by physicians of similar expertise for a similar procedure in a particular geographic area. See also Usual, Customary and Reasonable (UCR) Fees.

Rehabilitation

Services and facilities patients use as part of recovering from an accident or illness. Restoration of a totally disabled person to a meaningful occupation. A provision in some long-term disability policies that provides for continuation of benefits or other financial assistance while a totally disabled insured is retraining or attempting to resume productive employment.

Reinsurance

An added level of coverage purchased by a self-funded employer, at-risk managed care plan or another insurance company to protect against a payout of claims in excess of a designated limit, to protect themselves from major losses or catastrophic claims

Renewal

Continuance of coverage under a policy beyond its original term by the insurer’s acceptance of a premium for a new policy term.

Repatriation

The process of making the transition from an overseas assignment to the home country.

Reserve

A sum set aside by an insurance company or self-funded plan to assure the fulfillment of commitments for future claims.

Risk Sharing

A method by which premiums and costs of medical protection are shared by plan sponsors and participants.

Risk Pool

The population of individuals (or groups) across which costs for insured expenses are spread through premiums or other mechanisms.

Secondary Payer

The insurance carrier that is second in responsibility under coordination of benefits.

Segregated Fund

An annuity offered by an insurance company which guarantees a specific percentage return on the investment upon maturity. It is similar to a mutual fund, and is offered by a insurance company. The term "segregated" is used because the funds are kept separate from the issuing company's other investment funds. Segregated funds also contain other beneficial provisions, including the exemption from certain fees, such as the probate fee that would normally be charged when funds are passed to a beneficiary.

Self-Administered Plan

(Directly Invested or Trusteed) A plan funded through a fiduciary, generally a bank, but sometimes a group of individuals, that directly invests the funds accumulated. Retirement payments are made from the fund as they fall due. This term is used to designate a plan that is not funded through an insurance company. (Health Care) A plan administered by the employer or welfare fund without recourse to an intermediate insurance carrier. Some benefits may be insured or subcontracted while others are self-funded.

Self-Insurance (Self-Funding)

A fully noninsured or self-insured plan is one in which no insurance company or service plan collects premiums and assumes risk. In a sense, the employer is acting as an insurance company--paying claims with the money ordinarily earmarked for premiums. Regardless of the specific self-funding technique a firm chooses, it will need to either buy its administrative services (ASO) outside the company or develop them in-house. Hence, self-funded arrangements are referenced as ASO or self-administered.

Service Provider

Any of the following who provide service to a benefit plan: persons, such as accountants, attorneys, enrolled actuaries, investment managers, trustees or other plan fiduciaries; entities, such as third-party administrators or insurance carriers.

Short-Term Disability

Often considered to be a disability lasting usually not longer than two years.

Short-Term Disability Income Insurance

A provision to pay benefits to a covered disabled person as long as he or she remains disabled up to a specified period.

Sick Leave

Plans that provide employees protection against short-term disability and typically specify a maximum number of benefit days per year or per disability that an employee may take at full pay before insured short-term or long-term disability benefits are initiated.

Single Employer Plan

A pension plan maintained by one employer. Also, the term may be used to describe a plan maintained by related parties such as a parent and its subsidiaries.

Skilled Nursing Care

Around-the-clock nursing and rehabilitative care that can only be provided by, or under the supervision of, skilled medical personnel.

Skilled Nursing Facility

A care setting for patients who have chronic diseases or no longer require hospital care, but need 24-hour nursing care and other defined health care services.

Speech-language pathology

The study of disorders that affect a person's speech, language, cognition, voice, swallowing "(Dysphagia") and the "Physical medicine and rehabilitation" rehabilitative or corrective treatment of physical and/or "Cognition" cognitive deficits "Speech Disorder" disorders resulting in difficulty with communication communication and/or swallowing..

Stop-Loss Insurance

Contract established between a self-insured group and an insurance carrier providing carrier coverage if claims exceed a specified dollar amount over a set period of time. May apply to an entire plan or a single component. Also called excess loss insurance.

Stop-Loss Provision

A health insurance policy provision. A stop-loss provision is determined in two ways: either after a certain amount of benefits are paid from the plan or after a certain amount of out-of-pocket expenses are paid by the individual or family unit. When the dollar amount specified is reached, the coinsurance factor is raised to 100%. When there is a stop-loss provision in the plan (besides the separate maximums and coinsurance levels on outpatient mental and nervous disorders), outpatient mental and nervous charges usually do not apply toward the dollar figure used to calculate when the stop-loss begins; after the stop-loss does begin, it does not apply to these charges.

Subrogation

The right of the employer or insurance company to recoup benefits paid to participants through legal suit, if the action causing the disability and subsequent medical expenses was the fault of another individual. Used as a cost-containment measure. Generally, the substitution of one person or entity for another in regard to a legal right, interest or obligation.

Suspension

Some contributory plans that do not permit employees to withdraw from the plan while continuing in employment do permit them, on application, to suspend contributions temporarily. The term also refers to a temporary interruption of employer contributions that may sometimes be permitted by an insurance company and/or the secretary of the treasury without terminating the plan.

Target Loss Ratio

Target Loss Ratio, or TLR. Your Target Loss Ratio is the set amount of each dollar that you pay to an insurance company that is allocated to pay for claims.

Temporary Disability Insurance

Insurance that covers off-the-job injury or sickness and is paid for by deductions from an individual’s paycheck; administered by state agency. Mandated in certain states. Also called unemployment compensation disability or state disability insurance.

Termination

Describes the final phase of an interrupted pension program. If the plan has enough assets to meet all its obligations, it is called a standard termination. In the case of a distress termination, the PBGC acts as trustee and uses its insurance funds as necessary to guarantee pension payments. Strict regulations govern all payout periods. Essentially all participants must vest 100%. However, the assets will have to be distributed according to the present formula. No money may return to the employer, except in the case of an actuarial error. It is also possible to discontinue contributions, but keep the trust in force, in order to preserve the tax-sheltered status of future payouts.

Total Disability

An illness or injury that prevents an insured person from continuously performing every duty pertaining to his or her occupation or from engaging in any other type of work for remuneration.

Transportation Benefits

Some companies sponsor public transportation subsidies, van pools, employer-sponsored vans or buses that transport workers to the workplace. Aims to increase employee attendance and retention.

Underfunded Benefit Plan

An employee benefit plan in which the company’s past contributions are insufficient to cover current and future liabilities.

Underwriter

(Insurance) Can mean (1) the company that receives the premiums and accepts responsibility for fulfilling the policy contract, (2) the company employee who decides whether or not the company should assume a particular risk or (3) the agent who sells the policy.

Union-Sponsored Plan

A program of health benefits developed by a union. The union may operate the program directly, or may contract for the benefits. Funds to finance the benefits are usually paid out of a welfare fund, which receives its income from (1) employer contributions, (2) employer and union member contributions or (3) union members alone.

Underwriting

(Insurance) The process of identifying and classifying the potential degree of risk represented by a proposed insured.

Usual, Customary and Reasonable (UCR) Fees

Usual is the fee usually charged for a given service by a health care provider; customary is a fee in the range of usual fees charged by similar providers in area; reasonable is a fee that, according to the review committee, meets the lesser of the two criteria or is justified in the circumstances. Reimbursement is limited to the lowest of the three charges. Usual and customary charges are also being applied to workers’ compensation.

Waiver

Relinquishing the right to a benefit, especially in regard to health benefits, flexible benefits or early retirement window plans. An agreement attached to a policy that exempts from coverage certain disabilities or injuries normally covered by the policy. Also known as exclusion endorsement. A supplementary life insurance policy benefit under which the insurer gives up its right to collect renewal premiums if the policy owner dies or becomes disabled. Also known as waiver of premium.

Wellness (Health Promotion) Programs

A broad range of employer- or union-sponsored facilities and activities designed to promote safety and good health among employees. The purpose is to increase worker morale and reduce the costs of accidents and ill health such as absenteeism, lower productivity and health care costs. May include physical fitness programs, smoking cessation, health risk appraisals, diet information and weight loss, stress management and high blood pressure screening.