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Important Insurance Terms for Rhode Island | |
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General Insurance Terms Adverse Decision: When the cost of a covered service ordered by your provider is not paid for by your health plan because the health plan decided that the service was not medically necessary. Affiliation Period: The time a health plan may require you to wait after you enroll and before your health coverage begins. During this time premiums cannot be charged. Allowable Charge: This is the amount of money that your health plan agrees to pay your health provider for the services you receive. Annual Limits: Each year some health plans set a maximum limit on the total number of health care services you receive per year, or a limit is set on the total amount of money the health plan pays for yearly health care services. Appeal: If your health plan decides not to pay for a covered service, you have the right to ask your health plan to review this decision. This review is called an appeal. Benefits: Your health plan agrees to pay for specific health care services as part of your health care coverage. These covered services are called benefits. Balance Billing: The practice of billing a patient for the amount that remains after the insurance company has made its payment and after the enrolled patient has made their copayment. Capitation: A way that a health plan pays it participating providers. It is a form of risk sharing. The health plan pays the provider a set amount of money each year for all the covered services that he or she provides to the health plan's enrollees. Catastrophic Insurance: A type of limited health insurance that covers costly medical expenses. The deductibles are very high ($2,000 or more) and the premiums are low. Centers of Excellence: Hospitals that specialize in treating particular illnesses, or performing treatments for cancer or organ transplants. Consolidated Omnibus Budget Reconciliation Act (COBRA): Permits you and your dependents to continue receiving coverage from your employer's group health plan after your job ends. If your employer has 20 or more employees this coverage may extend to job loss due to retiring, quitting, being fired, or reduction of work hours. If you choose to continue in your employer's group health plan for a limited time, then you pay the full premium, including the share your employer used to pay on your behalf. COBRA continuation coverage usually lasts for 18 or 36 months. For federal eligibility refer to the Rhode Cancer Council's brochure titled Health Care Protection Under Rhode Island Law. Co-Insurance: Each time you receive certain health care service; you pay a percentage of the allowable charge. Comprehensive Coverage: Insurance that is broader in coverage and has higher indemnity payments. Concurrent Review: This occurs when your health plan reviews the covered services ordered by your provider while you are currently being treated for a health problem. The health plan decides if the services are medically necessary as a part of its decision to continue to pay for services. Conversion: Your right to convert your former health plan when you leave a fully insured group health plan. Copayment: Each time you receive certain health care services; you pay a set amount of money to the provider of the services. This amount is usually found on the enrollee's insurance identification card. Covered Services: These specific health care services are also called benefits. The health plan agrees to pay for these services as part of your health care coverage. Credentialing: A health plan reviews the qualifications of a provider before he or she can be a participating provider in the health plan. Deductible: The amount of money that you must pay for covered services before your health plan begins to pay for the services. Emergency Service: A service given to treat a person with a serious medical or health problem when the person needs care right away to prevent permanent damage or death. A medical problem includes physical, mental and dental conditions. Enrollee: Anyone who is covered by a health plan. This may include you, your spouse, and/or your children. Enrollment Period: The period during which all employees and their dependents can sign up for coverage under an employer group health plan. Besides permitting workers to elect health benefits when first hired, many employers and group health insurers hold an annual enrollment period during which all employees can enroll in or change their health care coverage. Explanation of Benefits (EOB): One of these forms comes with or without an insurance check to explain what portion of the submitted bill was covered and why. If the enrollee has more than one policy, then this form is proof of what his or her primary coverage had paid. Exclusions: Specified illnesses, injuries, conditions, or treatments that are not covered by the health plan. Experimental therapies, cosmetic surgery, and eyeglasses are common exclusions. Exclusions are also referred to as non-covered services. Fee-for-Service: A method of charging patients per visit to a health care provider. Premium costs for fee-for-service agreements can increase if providers increase their fees, increase the number of visits, or substitute less costly services with more expensive ones. Formulary Medications: This is a list of medications that your health plan pays for or provides when they are ordered by a participating provider of the health plan. Grace Period: Payment of your health plan coverage premium is due on the date set by the health plan, which is found on your billing statement. If your portion of the bill is not paid, your health care coverage continues for a set number of days after this due date. This is known as a grace period. If the bill is paid during the grace period, your coverage continues; if it is not paid during this period, your coverage is cancelled. Group Health Plan: Health insurance that is usually bought through an employer, union, or professional association. This insurance covers at the minimum two employees or the self-employed. Guaranteed Issue: Requires that health plans allow you to enroll regardless of your health status, age, gender, or other related factors that may predict your use of health care services in the future. All health plans in Rhode Island with 2-50 employees are guaranteed issue. Guaranteed Renewable: A feature in health plans that prevents your coverage from being cancelled if you get sick. Federal law under the Health Insurance Portability and Accountability Act (HIPAA) requires that all health plans be guaranteed renewable. Your coverage can be cancelled for other reasons unrelated to your health status, such as failure to make payments. Health Maintenance Organization (HMO): Provides a wide range of comprehensive health care services for enrollees in group health plans. This form of coverage has a fixed periodic payment. Health Insurance Portability and Accountability Act (HIPAA): This is a national law that protects individuals with pre-existing conditions from being discriminated against when purchasing or maintaining health insurance. This applies to both group health plans and individual health plans. For further information, see the Rhode Island Cancer Council's brochure titled Health Care Protection Under Rhode Island Law. Indemnity Insurance: A form of payment by insurance companies for their enrollee's use of health care services. After you receive a covered service, you pay your provider in full. Then you ask your health plan to pay you back. The health plan may refund some or all of the money you paid, if it feels that the services were medically necessary. Individual Health Plan: Health insurance that is purchased by an individual to cover themselves and often their families. This insurance is not employer-based. In-Network Providers: A health care provider who is a participating provider in your health plan. Inpatient Services: Health care services that you receive when you stay one night or more in a hospital, nursing home, or rehabilitation center. Late Enrollment: Enrollment in a health plan at a time other than the open or special enrollment period. If you are a late enrollee, you may be subject to a longer pre-existing condition waiting period. Limited Coverage: A policy that covers only specified illnesses or accidents. Major Medical Expense Insurance: A form of insurance that provides coverage for costly medical conditions. These plans may contain limits on coverage and usually have high deductibles and high coinsurance. Managed Care Plan: An organization that functions as both the insurer and the provider of health care services. Maximum Life Benefit: The total amount that your health plan pays for a covered service while you are enrolled in that plan. Maximum Lifetime Cap: This is the total amount of money that your health plan pays for all of the care that you receive while enrolled in that health plan. Medicaid: A joint federal and state health insurance program that assists individuals with low incomes and/or limited resources in getting health care coverage. Medical Savings Account (MSA): An established account in which individuals can accumulate funds to pay for medical expenses and insurance costs. These savings accounts are tax deductible. Medically Necessary: There may be times that your health care provider feels that certain health care services are necessary in the proper treatment of your health care problem. The health plan you are enrolled in reserves the right to review the services that your provider feels are necessary, before, during or after you receive the services. Upon review the health plan may decide, based upon its own medical standards, that the services you received or will receive are not medically necessary. If the health plan makes this decision, then they will not pay for the services. Non-Covered Service: A health care service that is not covered by your health plan. Non-Formulary Medications: Medications that are not paid for or provided by your health plan. Official Plan Document: This is a formal booklet given to you by your health plan that describes you health coverage in detail. It is important to hold onto this document for future reference. Open Enrollment: The period of time in which eligible individuals may enroll in, or transfer between, health care insurance plans. Plans must accept all previously covered individuals who enroll during an open enrollment. Out-of-Network Provider: A health care provider who is not a participating provider in your health plan. Out-of-Pocket Expense: Payments you make for health care services. These payments include copayments, coinsurance, and payments for non-covered services. Outpatient Services: Health care services provided at a hospital or other free standing health care facility that do not require an overnight stay. Participating Provider: A provider is a person or an organization who can deliver health care services. A participating provider is a person or organization that has an agreement with your health plan to deliver health care services to the individuals enrolled in that plan. Portability: Insurance that can be retained if you leave your current employment or your group health plan. Portability is protected under COBRA (see above for COBRA definition). Pre-Existing Condition: A health condition that existed before a policy was purchased. Insurance companies definition of a pre-existing condition vary, but usually any condition for which a potential enrollee has seen a doctor for in the last 6 months is a pre-existing condition. Pre-Existing Condition Waiting Period: When an enrollee has a pre-existing condition, health plans usually have a 6-12 month waiting period in which any health care services provided for this condition are not covered. Preferred Provider Organization (PPO): A managed care plan that allows members to access services from both in-network providers and out-of-network providers. Premium: A premium is the amount of money paid for health care coverage. Primary Care Provider (PCP): These health care providers are non-specialty physicians. Enrollees in health plans choose a primary care provider to serve as the coordinator for all their health care services. In managed care health plans, in order for an enrollee to see a specialist, he/she must obtain a referral from their primary care provider. Prior Authorization Review: Occurs when your health plan requires that it review certain covered services before you receive them in order to determine if the services are medically necessary and how much the health plan will pay for the services. Provider: A person or organization that provides health care services to the insured. Examples of providers are physicians, psychologists, pharmacists, and physician assistants. Provider Network: All of the providers who have an agreement with the health plan to deliver medical or health care services to plan members. Once in the provider network, the providers are known as participating providers. Point-of-Service Plan (POS): A managed care plan that allows enrollees to see providers who do not participate in the health plan. Reimbursement occurs like an indemnity plan, where you pay in full and then ask your health plan to reimburse you. In this type of health plan if you choose to see a participating provider, then you pay only the copayment for the services you receive. Provider-Sponsored Organization (PSO): A type of managed care program that is formed by a group of doctors and/or hospitals. Prudent Person Rule: In individual health plans only (see page 3), this rule permits insurers to exclude coverage of any condition that they feel is pre-existing. Retrospective Review: A follow-up analysis that makes sure health care services were medically necessary and appropriate in order to reduce fraud and unnecessary treatments. Rider: This is a separate part of your health care coverage; for instance, the agreement that your health plan will cover prescription costs for an additional amount of money per month. Riders are agreed upon before you enroll in a plan. Second Opinion: When you go to a second health care provider for a recommendation on the first provider's diagnosis and/or treatment plan. Second Surgical Opinion: Health plans may require patients to obtain a second physician's opinion before certain elective surgeries can occur. Special Benefit Network: Provider networks that cover particular health care services, such as prescription costs. Special Enrollment Period: A time during which you and your dependents are permitted to sign up for coverage under a group health plan. Employers and group health insurers must make such a period of enrollment available to employees and their dependents when their family status changes or when their health insurance status changes. Special enrollment periods must last at least 30 days. State Continuation Coverage: In Rhode Island if you are enrolled in a fully insured group health plan, in certain circumstances you have the right to continue your health coverage for up to 18 months after your job ends. This coverage is different from COBRA, as you are not eligible for continued coverage if you were laid off involuntarily, if you are the spouse or dependent of an employee who died, and if your employer's workforce was permanently reduced. State Mandated Benefits: Each state requires insurance companies to provide certain covered benefits for a variety of medical conditions. For a list of Rhode Island's mandated benefits see the Rhode Island Cancer Council's brochure titled Insurance Health Benefits Required Under Rhode Island Law. Stop Loss: The point during a calendar year when your insurance policy pays 100% of costs for the remainder of the year. Subscriber: A subscriber is the person with whom the health plan has an agreement. They are the purchaser of the health plan. The health plan agrees to provide necessary health care services to the subscriber and his or her dependents covered under the health plan. Third Party Administrator: An outside person or firm that maintains all records regarding the enrollees under the health plan. Underwriting: The process by which an insurer determines whether or not it will accept an application for insurance. Urgent Care: A serious, but not life threatening, medical or health problem that needs to be treated by a provider within 24 hours to prevent the problem from getting worse. Utilization Review: The process that analyzes the delivery of health care services to determine if they were appropriate, medically necessary, and of high quality. A utilization review may include a review of hospital admissions, services ordered and provided by participating providers, the length of hospital stays, and the discharge procedures at a hospital. Waiting Period: The time you may be required to work for an employer before you are eligible to receive health benefits. Not all employers require waiting periods, but they do reserve the right to so. Waiting periods are not considered gaps in health insurance when it is determined whether or not coverage has been continuous. COBRA Terms For the definition of COBRA see above. For Federal Eligibility refer to the Rhode Island Cancer Council's brochure titled, Health Care Protection Under Rhode Island Law. Disability: People eligible for Social Security disability benefits may receive COBRA coverage for 29 months. Extensions: Although COBRA sets specific time limits on coverage; the health plan may extend your benefits and coverage beyond the mandated coverage period. Moving: If you relocate out of your COBRA health plan's coverage area, you will loose your benefits. However, the previous employer is required to offer you a plan in your new area. Notification Rights: The U.S. Department of Labor has jurisdiction over issues involving notification about COBRA coverage. Employers that fail to comply with the notification rules face fines of up to $110 for every day that no notice is sent after the deadline. In addition, the IRS can impose an excess tax against any company that does not comply with COBRA regulations. Premium Costs: Your premium can be increased if the cost of the health plan is increased for everyone at the workplace. The plan must allow you to pay this premium on a monthly basis if you choose. Short Payment Rules: If your COBRA payment is short by an insignificant amount, either 10% or $50, whichever is lesser of the two, then the employer must accept this as full payment. However the employer can notify you of the short payment and give you another 30 days to pay in full. MEDICARE Terms Durable Medical Equipment: This equipment is used to care for individuals who are sick or injured. The equipment is either purchased or rented, depending on which has a lesser cost, and the equipment is brought to the where the patient is currently living. Examples of durable medical equipment are canes, home oxygen equipment, nebulizers, and wheelchairs. Free Standing Facility: A medical facility that does not have any hospital affiliations. It is certified by the public health department and performs covered out-patient services, such as chemotherapy and laboratory testing. Home Health Care: Skilled nursing care and other health services you get in your home for the treatment of an injury or illness. Lifetime Reserve Days: When you are in the hospital for more than 90 days, Medicare pays for 60 of those days. These 60 days are called lifetime reserve days. Limiting Charge: The highest amount of money you can be charge for covered services. This does not apply to medical supplies and equipment. Medicare Approved Amount: The fee Medicare sets as reasonable for a covered medical service. This is the amount that the health care provider is paid. It is also called an approved charge. Respite Care: Inpatient care given to a hospice patient, so that the usual caregiver can rest. For further information contact the Insurance Commission through the: Rhode Island Department of Business Regulation 233 Richmond Street Providence, RI 02903
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