Deductible:

An amount that a person must pay towards covered health benefits before any benefits are payable from the plan.

Co-Insurance:

A cost-sharing arrangement under which a covered person pays a specified percentage of the cost of a specified service, such as 20% of the cost of a doctor’s office visit.

Co-Payment:

A cost-sharing arrangement under which a covered person pays a specified dollar amount for a specified service, such as $10 for a prescription or $20 for a doctor’s office visit.

Insurance:

is used to protect from the unforeseen and the unbudgeted. Insurance is used to protect form economic catastrophes. It is a means of shifting risk that we cannot afford.

COBRA:

(Consolidated Omnibus Budget Reconciliation Act) this is the federal act of 1985, which established, among other things, the group health continuation coverage rules that are found in ERISA Code.

CP:

(Cafeteria Plan i.e. Sect 125) A cafeteria plan gives employees an Opportunity to choose among a menu of benefits consisting of cash or regular payand certain non-taxable benefits (for example, health insurance benefits).

DCP:

(Defined Contribution Plan) an employer gives a set amount of money to each employee to spend on benefits that are offered under a cafeteria plan.

DCAP:

(Dependent Care Assistance Plan) an employee can use a DCAP to be reimbursed for employment-related expenses that allow the employee and his or her spouse to be “gainfully employed.” Typical DCAP expenses are those incurred to have a baby-sitter or daycare provider take care of an employee’s child while Mom and Dad are both working.

DOL:

The U.S. (Department of Labor).

EOB:

(Explanation of Benefits) a statement from a plan explaining what portion of a claim was paid.

ERISA:

(Employee Retirement Income Security Act) this is the federal act of 1974, as amended, which governs the administration, supervision, and management of pension plans and welfare plans.

Flex Plan:

(Flexible Benefits Plan) a plan under which the employer contributes an amount that the employee can use to buy various benefits. **(Note same as DCP) The employee may also be permitted to purchase additional benefits with salary reduction dollars and/or elect cash in lieu of benefits under a cash-out option.

FMLA:

(Family and Medical Leave Act) this is the federal act of 1993, which allows eligible employees of covered employers to take up to 12 weeks of unpaid, job-protected family and medical leave each year, and requires employers to continue to provide group health plan benefits during the leave.

FSA:

(Flexible Spending Arrangement)  A Medical Reimbursement Plan  (including a Health FSA) or DCAP that gives employees coverage under which eligible expenses may be reimbursed, subject to certain conditions such as a maximum limit.  The most common FSA is one offered through a Cafeteria Plan, with employees paying the entire premium for coverage through pre-tax dollars.

Health FSA:

HIPAA:

(Health Insurance Portability and Accountability Act), which is far-reaching legislation designed to improve the portability of health coverage and to make other changes to the health care delivery system.

HMO:

(Health Maintenance Organization) is a benefit package option under the medical insurance plan.

HRA:

(Health Reimbursement Arrangement) is an employer-funded plan that reimburses employees for medical care expenses and allows unused amounts to be carried forward.

HSA:

(Health Saving Accounts) is an account established by an eligible individual covered by a high deductible health plan that meets the requirements of code 223 and enables the account-holder to pay for qualified medical expenses on a tax-favored basis.

MERP:

(Medical Expenses Reimbursement Plan) is any plan or arrangement under which an employer reimburses an employee for uninsured health or accident expenses incurred by the employee or his dependents.

MSA:

(Medical Savings Account) (Now know as Archer MSAs) enables individuals to pay for deductible medical expenses with pre-tax funds.

POP:

(Premium-Only Plan) the most common form of cafeteria plan, which has only one objective: to permit employees to pay for their share of the premiums for certain insurance coverage’s (e.g., group health coverage) with pre-tax dollars.

PPO:

(Preferred Provider Organization) is a benefit package option under the medical insurance plan.