Glossary

A

• Actuarial value (AV)—The percentage of total average costs for covered benefits that a plan will cover. For example, if a plan has an actuarial value of 70 percent, on average, you would be responsible for 30 percent of the costs of all covered benefits. However, you could be responsible for a higher or lower percentage of the total costs of covered services for the year, depending on your actual health care needs and the terms of your insurance policy. The percentage a plan covers can be described as Bronze (60 percent), Silver (70 percent), or Gold (80 percent).
• Advance Premium Tax Credit (APTC)—Tax credits to help reduce the cost of health care premiums. The premium tax credits make it easier for middle-class Americans to purchase affordable health insurance.
• Adverse selection—Adverse selection occurs when insurers must cover high-risk members, who tend to use their insurance benefits more. Health insurance is most efficient when risk is shared among large numbers of members. In large, diverse populations, healthy members offset the costs of unhealthy members.
• Affordable Care Act (ACA)—The comprehensive health care reform law that was enacted in March 2010. The law was enacted in two parts: The Patient Protection and Affordable Care Act was signed into law on March 23, 2010, and was amended by the Health Care and Education Reconciliation Act on March 30, 2010. The name “Affordable Care Act” is used to refer to the final, amended version of the law.
• Affordable coverage—Affordable coverage under the Affordable Care Act indicates employers must offer insurance that covers at least 60 percent of costs. In addition, an individual employee's premium cannot exceed 9.7 percent of their household income. If the coverage offered does not meet the affordability standard, employees may receive tax credits to purchase insurance on their own through a health insurance marketplace.
• Allowed amount—The fee on which payment is based for a covered health care service, from an out-of-network provider. If your out-of-network provider charges more than this amount, you may have to pay the difference. For example, if the allowed amount is $100 and the provider charges $150, you may be responsible for the $50 difference. This is what is known as balance billing, and it is not permitted with in-network providers. Allowed amount may also be called "eligible expense," "payment allowance," or "negotiated rate."
• Appeal—A request for your health insurer or plan to review a decision, complaint, or grievance.
• Applicable Large Employer—An employer that employs, on average, 50 or more full-time (FT) or full-time equivalent (FTE) employees.
• Auto-enrollment—Employees of an organization can automatically be enrolled in insurance as a default. Some level of insurance is provided without the employee making decisions. To avoid coverage, individuals would have to proactively opt out of coverage. Auto-enrollment provides a convenient way to ensure that employees do not miss an opportunity to participate in a health coverage plan.

B

• Balance billing—When a provider bills you for the difference between the provider's charge and the allowed amount. This is not allowed with contracted providers.
• Benefit limit—The maximum amount that the Health Plan will pay for a covered service. The benefit limit may be expressed in many ways, such as a dollar amount, number of days, or number of services. UPMC Health Plan has no lifetime limits on benefits.
• Benefit period—The period during which benefits will be paid under a health insurance plan.
• Brand-name drug—A medication sold by a pharmaceutical company under a trademarked name. Brand-name drugs can only be produced and sold by the company that holds the patent for the drug. When patents run out, generic versions of many popular drugs become available at a lower cost.

C

• Catastrophic plan—This is a reduced-cost benefit plan. This plan protects against high out-of-pocket costs. People younger than 30 can purchase this coverage. Those who cannot afford to purchase qualified health care coverage may also be eligible.
• Claim—A bill for health care services that a provider submits to an insurance company for payment.
• Coinsurance—The specific percentage of the provider's charge that you are responsible for paying. For example, if your coinsurance is 20 percent, you pay 20 percent of the charge and the Health Plan pays 80 percent of the allowed amount. Coinsurance requirements are specified in the plan documents.
• Community rating—A rule that prevents health insurers from creating various premiums within a geographic area based on age, gender, health status, or other factors.
• Complaint—A dispute or objection regarding a provider or the coverage, operations, or management policies of UPMC Health Plan. Complaints can involve many different issues, including, but not limited to, the quality of care or services, benefits exclusions, claim denials, rescission of coverage, or coordination of benefits.
• Copayment—A fixed charge that you must pay for a covered health care service, usually at the time you receive the service.
• Cost sharing—The share of costs for covered services that you must pay out of your pocket. This term usually includes deductibles, copayments, and co-insurance.
• Cost-sharing reduction—A discount that lowers the amount you have to pay for deductibles, copayments, and coinsurance. In the Health Insurance Marketplace, cost-sharing reductions are often called “extra savings.” If you qualify, you must enroll in a plan in the Silver category to get the extra savings.
• Covered service—A health care service that is eligible under your plan.

D

• Deductible—The amount you owe for health care services your health insurance or plan covers before your health insurance or plan begins to pay. For example, if your deductible is $1,000, your plan won't pay anything until you've met your $1,000 deductible for covered health care services that are subject to the deductible. The deductible may not apply to all services.
• Dependent—A child or spouse who gets health insurance coverage through your plan.
• Durable medical equipment (DME)—Equipment and supplies ordered by a health care provider for everyday or extended use. DME may include oxygen equipment, wheelchairs, crutches, or blood testing strips for diabetes.

E

• Effective date—The date on which your coverage begins. The effective date is found in your acceptance letter and on your plan documents.
• Emergency medical condition—An illness, injury, symptom, or condition so serious that a reasonable person would seek care right away to avoid severe harm.
• Essential Health Benefits (EHB)—A specific set of health benefits, items, and services that must be covered by health plans in the individual and small group markets beginning in 2014.
• Excluded services—Health care services that your plan doesn't cover.
• Exclusive Provider Organization (EPO)—With this plan, you are not required to select a PCP as a “gatekeeper” in making referrals to specialists. However, an EPO does require you to receive care from a defined network of providers in order for your care to be covered.
• Explanation of Benefits (EOB)—After a claim has been submitted, you will receive a written (or electronic) statement (not a bill) from UPMC Health Plan that shows covered and non-covered benefits and payments as well as charges that may be your responsibility.

F

• Fair Labor Standards Act—The Fair Labor Standards Act provides compensation standards. These standards relate to issues such as wages, minimum wages, child labor, and overtime pay. The Act also indicates companies and individuals who are exempt from the standards.
• Federally-Facilitated Exchange (FFE)—A health insurance marketplace operated primarily by the federal government for consumers who live in a particular state. Pennsylvanians no longer uses the Federally-Facilitated Exchange. It has established Pennie^® as its state-based health insurance marketplace. See 'Pennie' for more information.
• Formulary—A list of prescription drugs covered by your plan. Drugs can fall into different categories, or tiers, that are covered at different payment levels. These different categories are determined based on the drug's cost, efficacy, or other considerations. Also known as drug lists, formularies are reviewed and modified on a regular basis.
• Full-time (FT) employee—An employee who works an average of 30 or more hours per week.

G

• Generic medication—A medication that has the same active ingredients as a brand-name drug. Inactive ingredients can vary, such as dyes used to color the drug or powders used to shape the tablets. These differences do not affect how generic medications work in the body. Generics are cost-effective alternatives that offer the same level of safety and quality as their brand-name equivalents.
• Grandfathered health plans—The Affordable Care Act exempts most plans that existed on March 23, 2010—the day the law was enacted—from some of the law's consumer protections. This preserves consumers' rights to keep the coverage they had before health insurance reforms.
• Grievance—A request on the part of a member, a member's representative, or a health care provider (with written member consent) to have a managed care plan reconsider a decision solely concerning the medical necessity and appropriateness of a health care service.
• Guaranteed issue—A requirement that health plans permit you to enroll regardless of health status, age, gender, or other factors that might predict the use of health services. Except in some states, guaranteed issue doesn't limit how much you can be charged if you enroll.

H

• Habilitative services—Health care services that help a person keep, learn, or improve skills and functioning for daily living. Examples include therapy for a child who isn't walking or talking at the expected age. These services may include physical and occupational therapy, speech-language pathology, and other services for people with disabilities in a variety of inpatient and/or outpatient settings.
• Health Insurance Portability and Accountability Act (HIPAA)—A federal law that was enacted in 1996. It is designed to improve availability, portability, and efficiency of health coverage. HIPAA also protects your personal health information (PHI), whether it's in oral, written, or electronic format. UPMC Health Plan will not use or disclose your PHI without your consent, except for treatment, payment, or health care operations.
• Health savings account (HSA)—This is a savings account that has tax advantages. It allows you to save money to pay for current and future health care costs. To be eligible for an HSA, you must be covered by a qualified high-deductible health plan. Our UPMC Advantage Silver HSA $4,000/$0 and Gold HSA $3,000/$0 plans are such plans.
• High-deductible health plan (HDHP)—A health insurance plan with a minimum deductible that must be met before the health plan begins to pay. The minimum deductible for a plan to be categorized as an HDHP varies each year as determined by the Internal Revenue Code. An HDHP can be combined with a health savings account, allowing you to pay for certain medical expenses with money that's free from federal taxes.
• Home health care—Health care services a person receives at home.
• Hospice services—Services to provide comfort and support to people in the last stages of a terminal illness.
• Hospitalization—When you receive care in a hospital that requires admission as an inpatient (usually requires an overnight stay).
• Household income—Modified adjusted gross income of the subscriber and any members of the subscriber's family (including spouse and dependents) who are required to file an income tax return.

I

• ID card—The identification card you and/or your dependents carry that provides important information related to your health coverage, such as your member ID number, plan effective date, copayments, and the toll-free number you can call for assistance.
• Illustrative rate—The sample monthly premium generated for you and/or your family. This premium does not factor in any medical history or conditions that you and/or your family members may have and is subject to change.
• Individual policy—Health coverage for individuals or families who are either self-employed, or do not have health coverage through an employer or other group plan.
• In-network—Refers to care received from providers who participate in the Health Plan's provider and/or hospital network. It's important to know if your provider is in the network because the Health Plan provides a higher level of coverage for in-network providers.

J

K

L

M

• Medical loss ratio (MLR)—The percentage of your premium dollars that an insurance company spends on providing you with health care and improving the quality of your care versus how much is spent on administrative and overhead costs.
• Medically necessary (or medical necessity)—Medical services or supplies that are appropriate and effective for the treatment of an illness or injury in accordance with clinical research findings or accepted medical standards, as described in the Covered Benefits section of individual plan documents.
• Minimum essential coverage (MEC)—The type of coverage an individual needs to have to meet the individual responsibility requirement under the Affordable Care Act. This includes individual market policies, job-based coverage, Medicare, Medicaid, CHIP, TRICARE, and other certain coverage.
• Minimum value—Coverage in which the plan's share of the total allowed costs of benefits provided under the plan is at least 60 percent of such costs.

N

• National Committee for Quality Assurance (NCQA)—An independent, not-for-profit organization that evaluates managed care plans. The NCQA accreditation process is nationally recognized and evaluates how well a health plan manages all aspects of its system and the extent to which it helps to continuously improve health care for individuals.
• National health expenditures—The nation's spending on health care, compiled annually in the Report of National Health Expenditures. The report is developed by the Centers for Medicare & Medicaid Services. National health spending is projected to grow at an average annual rate of 5.4 percent from 2019 to 2028 and reach $6.2 trillion by 2028.
• Network—Also called "provider network." It includes the doctors, hospitals, and other health care professionals that contract with your plan to provide services, typically at a negotiated rate of payment.
• Non-participating provider—This term is generally used to describe doctors, hospitals, and other health care professionals who have not contracted with a health plan to provide services. They may also be called "out-of-network providers."

O

• Open Enrollment period—This is the period of time when people can choose a new health plan. This usually occurs once a year.
• Out-of-pocket maximum—This is the most you pay during a policy period (usually a year) before your health insurance or plan begins to pay 100 percent of the allowed amount. This limit never includes your premium, balance-billed charges, or health care your health insurance or plan doesn't cover. Some health insurance or plans don't count all of your copayments, deductibles, coinsurance payments, out-of-network payments, or other expenses toward this limit.
• Over-the-counter medication—Medication that may be obtained without a prescription.

P

• Partnership Exchange—A Health Insurance Marketplace that is jointly operated by a state and the federal government.
• Participating provider—A doctor, hospital, nursing facility, or other health care provider that has contracted with your plan to provide covered service for a negotiated charge. Also known as an “in-network provider."
• Patient Centered Outcomes Research Institute (PCORI)—A non-profit organization funded by the U.S. government to support scientific research on the effectiveness of certain medical treatments or procedures.
• Pennie^®—The name of the Pennsylvania health insurance exchange. Pennsylvania residents can visit—pennie.com—to buy qualified health benefit plans at an affordable price.
• Pharmacy & Therapeutics Committee (P&T)—A group of pharmacists, nurses, and other health care professionals who advise your plan regarding the prescription drug list and the safe and effective use of medications.
• Premium — This is the amount you pay for an insurance policy. It is often paid in monthly installments. For example, your monthly premium may be $200. You must pay this amount each month regardless of whether you use your insurance to receive covered health care services.
• Prescription drug—A medication that cannot be dispensed without an order from a medical professional.
• Preventive service—A recommended routine health care service or screening that may be covered at no cost to you by your health plan.
• Primary care provider (PCP)—A provider who is part of your plan's network and serves as your main point of contact for medical care. A PCP is usually a general or family care practitioner, or in some cases, an internist, pediatrician, or ob-gyn.
• Prior authorization—Some medical services/treatments and medications require Health Plan approval before they can be covered. The Health Plan requires prior authorization for medical services to determine whether the treatment or services are medically necessary and will be obtained in the appropriate setting. Prior authorization is required before receiving the service/treatment. If a drug requires prior authorization, your provider must consult with UPMC Health Plan for approval for the medication to be covered. Prior authorizations are set on a drug-by-drug basis and require specific criteria for approval based on FDA and manufacturer guidelines, medical literature, safety concerns, and appropriate use.
• Producer—A licensed insurance salesperson.
• Provider—A licensed health care facility, program, agency, provider, or other health professional that provides health care services.

Q

• Qualified health plan (QHP)—Under the Affordable Care Act, this is defined as an insurance plan that is certified by an Exchange, provides essential health benefits, follows established limits on cost-sharing (like deductibles, copayments, and out-of-pocket maximum amounts), and meets other requirements. A QHP will have a certification by each Exchange on which it is sold. It will offer coverage at a Bronze, Silver, or Gold level.
• Qualified high-deductible health plan (QHDHP)—A health insurance plan with a minimum deductible that must be met before the health plan begins to pay. The minimum deductible for a plan to be categorized as a QHDHP varies each year as determined by the Internal Revenue Code. Being covered by a QHDHP is also a requirement for having a health savings account.
• Qualifying life event—A change in your life that can make you eligible for a Special Enrollment Period to enroll in health care coverage. Qualifying life events include, but are not limited to, moving to a new state, certain changes in your income, changes in your family size (for example, if you marry, divorce, or have a baby), and gaining membership in a federally recognized tribe or status as an Alaska Native Claims Settlement Act (ANCSA) Corporation shareholder.
• Qualified medical expense—A qualified medical expense is an expense for medical care as defined by Internal Revenue Code Section 213(d). The expenses must be primarily to alleviate or prevent a physical or mental defect or illness, including dental and vision. (Refer to IRS Publications 502 “Medical and Dental Expenses” and 969 “Health Savings Accounts and Other Tax-Favored Health Plans” for more information on qualified medical expenses on the U.S. Department of Treasury website at treasury.gov).
• Quantity limits—Drug-specific limits on the amount of certain drugs that can be dispensed during a specific period of time. For these drugs, your plan's Pharmacy & Therapeutics Committee follows FDA guidelines and other clinical literature to limit how much of the drug you may receive in a certain period of time or how long you may stay on the drug.

R

• Rate—A rate is a base price for health benefits. It is sometimes confused with a premium. A premium is the specific amount charged to covered groups and individuals. Depending on a number of different variables, actual premiums for covered individuals and groups may be higher or lower than a fixed rate.
• Reimbursement—Payment from your plan to reimburse your covered medical expenses directly to the health care professional or to you to pay for the services you received.
• Reinsurance—A reimbursement system that protects insurers from very high claims. It usually involves a third party paying part of an insurance company's claims once they pass a certain amount. Reinsurance is a way to stabilize an insurance market and make coverage more available and affordable. Beginning in 2021, Pennsylvania will run its own reinsurance program.
• Rider—A provision or added feature in an insurance policy allowing for amendments to its terms and/or coverage.

S

• Service area—The geographical area that's covered by a network of health care providers.
• Special enrollment period—A time outside the Open Enrollment period during which you and your family can sign up for health coverage. With Marketplace plans, you qualify for a special enrollment period for 60 days after certain life events that involve a change in family status (for example, marriage, birth of a child, or loss of other health coverage). Job-based plans must provide a Special Enrollment Period of 30 days.
• Specialist—A provider who provides medical care in a medical or surgical specialty (such as a dermatologist, cardiologist, or oncologist).
• Step therapy—A pharmacy program that may require you to try a more cost-effective drug or one that's considered the standard first-line treatment before moving to a more expensive drug.
• Summary of Benefits and Coverage (SBC)—A document detailing, in plain language, simple and consistent information about insurance coverage. The SBC helps consumers better understand the coverage they have and allows them to easily compare different coverage options. It summarizes the key features of the plan.

T

• Tax credits for families — Tax credits to help the middle class afford insurance. They are generally available for those with income between 100 and 400 percent of the poverty line who are not eligible for other affordable coverage.
• Telehealth (also known as telemedicine)—The practice of using a computer or mobile device to access behavioral or physical health care.

U

V

• Variable hour employee—An employee for whom it cannot be determined at their start date that they are reasonably expected to work an average of at least 30 hours per week.
• Virtual visit—Health care interactions that do not involve you and your provider being in the same room at the same time. These visits may be conducted using a computer or mobile device.

W

• Waiting period—The period of time that must pass before coverage can become effective for an employee or dependent who is otherwise eligible to enroll under the terms of a plan. Any eligibility conditions that are based solely on the lapse of a time period are allowed, but not for more than 90 days.

X

Y

Z