Open Enrollment Cheat Sheet – A Glossary of Terms You Need to Know
Deductibles, dependents, and co-pays, oh my! Refer to this open enrollment glossary for a quick guide on everything you need to know for open enrollment.
Do you remember scrambling to finish required summer reading before heading back to school? Whether or not you read the requirements from cover to cover, you may know (or have *heard*) a thing or two about CliffsNotes. In summary, this nifty site delivers a refresh on book terms, characters and key events. As open enrollment season quickly approaches, we want to help you brush up on essential health benefits terms so that you enter your company’s enrollment process confidently. Bookmark this handy guide to open enrollment terms so you can refer to it easily, and get bonus points for sharing with a friend!
COBRA:
A law that allows an individual to temporarily keep health coverage if he or she has experienced a qualifying life event. However, the COBRA member will have to pay the full amount of the premiums, as the employer will no longer contribute to these expenses.
Example: if an employee loses a job or coverage as a dependent, you may be eligible for COBRA coverage.
COYPAYMENT:
A fixed amount that an individual pays for covered healthcare services. These copays are in place even before the deductible is met. Insurance will then pay the rest. A health insurance plan will likely offer either coinsurance or copayments, but not both.
Example: Paying $20 each time you see a doctor or purchase medication, regardless of the treatment. These flat rates will vary depending on your coverage.
COINSURANCE:
A fixed percentage that the individual pays for covered healthcare services after the deductible is met. Insurance will then pay the rest.
Example: Paying 20% of the cost each time you see a doctor or purchase medication. This percentage will vary depending on your coverage.
DEDUCTIBLE:
The amount of money one pays for approved medical expenses before the healthcare plan begins to supplement this cost.
DEPENDENT:
An individual (typically a child) for whom a parent, relative, or other person provides healthcare. The person supporting the dependent may claim a personal exemption tax deduction.
NETWORK:
The facilities, providers, and suppliers one’s health insurer or plan has contracted with to provide health care services.
Example: If you are insured through Humana Inc., all Humana physicians, facilities, and pharmacies are considered “in-network” and will be covered by insurance. Kaiser Permanente physicians would be considered “out-of-network.”
MONTHLY PREMIUM:
A fixed monthly payment to an insurance company, similar to an electric or water bill. An employer can pay some, most, or all of the monthly premium, depending on the chosen plan.
Example: An employer may take $100 from your paycheck each month to put towards your monthly premium, then pay the remaining cost for you.
HMO: Health Maintenance Organization
An HMO is a comprehensive one-stop-shop for all your healthcare needs. It has the most structure and regulation of any other plan, so you’ll have to stay within your HMO network for all your services.
Key takeaways:
Through an HMO, you will have one primary care physician (PCP) to see for all your appointments. To see a specialist, you must see your PCP first to receive a referral. Also, this plan offers the least amount of freedom to choose providers. You must stay within your network for all charges—from physicians to pharmacies, and everything in between. A key point of attraction for many employees is that HMOs tend to have some of the lowest premiums.
PPO: Preferred Provider Organization
A PPO allows for the maximum amount of freedom and an extensive plan network. With this option, you are responsible for managing your health and need no referral to see a specialist.
Key takeaways:
- The most expansive network.
- No referral necessary to see a specialist.
- High out-of-pocket costs if you see out-of- network providers.
Continue reading for deeper dive into the differences between an HMO and PPO.
HSA (Health Savings Account):
A personal bank account that helps you pay for medical expenses. You do need a healthcare plan for this type of account, and, there is a $3,450 limit for individuals and caps at $6,900 for family coverage. Both the employee and employer may contribute to this type of account.
HRA (Health Reimbursement Arrangement):
An account owned by your employer to help you pay for medical expenses. There are no limits on contributions that employers may make on this type of account.
FSA (flexible spending account):
An account owned by your employer to help you pay for medical expenses. Both the employer and employee may contribute to this type of account.
As you dive into making plan selections or modifications, consider this Health Benefits Decoded ebook for help. You can download a free copy here.
