OHA: Common Insurance Terms

Health Insurance 101

Below, you will find a list of some of the most commonly used terms with clear definitions.



This is a complex concept that may be simply defined as a person’s ability to obtain health care.  A real measure of effective access includes consideration of:  1. Availability – can the person receive the services within a reasonable timeframe with an appropriate provider and, if insured, with a provider who accepts the member’s plan; 2. Accessibility – can the person get to the health care provider (hours of operation, location, transportation, etc); 3. Affordability – is the person able to manage the cost of the health service; and 4. Acceptability – is the person satisfied with the available service and provider options.



The Connecticut Health Insurance Exchange, authorized under the Affordable Care Act (ACA). Also known as the Marketplace, or the Obamacare Marketplace.


ADVANCE PREMIUM TAX CREDIT (APTC):  Some people will be eligible for under the ACA for QHPs purchased through AHCT.  This is dependent on a household’s Modified Adjusted Gross Income (MAGI).

ADVERSE DETERMINATION:  Under CT law, any determination before (prospective), during (concurrent) or after (retrospective) a service has been received that denies, reduces, terminates or fails to provide or make payment, in whole or in part, for a benefit under the health carrier’s health benefit plan requested by a covered person or a covered person’s treating health care professional.

Stated more simply, an adverse determination is a denial by an insurer to pay for some or all of a covered service.

AFFORDABLE CARE ACT (ACA):   See Patient Protection and Affordable Care Act


ALLOWABLE CHARGE: The amount of payment an insurance company allows for a covered service, which may be less than the actual charge by the physician or hospital


AMBULATORY CARE:  An institutional health setting in which organized health services are performed on an outpatient basis, such as a surgery center, clinic or other outpatient facility. Ambulatory care settings also may be mobile units or service, such as mobile mammography.


APPEAL: The formal review process, initiated by a managed care member or their authorized representative/ designee when a service is denied or disapproved.


AUTHORIZATION: The process of obtaining coverage approval for a service (or medication) from the managed care plan before receiving the service (or medication); Managed care plans require such approval for services to a non-participating provider or facility, non-covered medication, continued care for specific services, or exception to a benefit plan.


BALANCE BILLING: The practice by health care providers of charging fees in excess of covered amounts and then billing the patient for that portion of the bill that the payer does not cover


BENEFICIARY:   A person who is eligible to receive benefits from an insurance policy


BENEFITS:   List of health and related services guaranteed to be provided in a health plan


CASE MANAGEMENT:  As pertaining to insurance carriers: A process whereby enrollees with specific health needs are identified by the managed care organization and a plan of treatment is set up and monitored to achieve optimum patient outcome in a cost-effective manner. OHA: Reflect OHA’s mission and following case expectations.


CHIP:  Children's Health Insurance Program (Husky B) provides low-cost health coverage to children in families that earn too much money to qualify for Medicaid. In some states, CHIP covers parents and pregnant women. Each state offers CHIP coverage, and works closely with its state Medicaid program. CHIP benefits are different in each state.  https://www.healthcare.gov/medicaid-chip/childrens-health-insurance-program


CLAIM:  Information submitted by a provider or enrollee to establish that medical services were provided, from which payment to the provider is made. The term generally refers to the charges submitted to the health plan for services received by enrollees.


CLAIMS REVIEW:  Review of claims by insurers, government of others responsible for payment to determine liability and amount of payment. This review may include determination of the eligibility of the claimant; the eligibility of the provider that the benefit is covered; that the benefit is not payable under another policy; and that the benefit was necessary and of reasonable cost and quality.


CLINICAL TRIALS:  In a clinical trial, participants receive specific interventions according to the research plan or protocol created by the investigators. These interventions may be medical products, such as drugs or devices; procedures; or changes to participants' behavior, such as diet. Clinical trials may compare a new medical approach to a standard one that is already available, to a placebo that contains no active ingredients, or to no intervention.  https://clinicaltrials.gov/ct2/about-studies/learn#ClinicalTrial


COBRA (Consolidated Omnibus Budget Reconciliation Act):  A federal law that, among other things, requires certain employers to offer continued health insurance coverage, for a definitive amount of time, to certain employees and their beneficiaries who have had their group health insurance coverage terminated; The individual (or family) benefiting from this extension is responsible for the health care premium in full, as well as an additional amount allowed by law. Consumers in this position should contact their employers for specific information regarding the availability of this extension.

COB (Coordination of Benefits):  This applies when a person has more than one health insurance plan, and details the order in which each plan pays for the services that person receives.


CO-INSURANCE:  The portion of covered health care cost for which the covered person has a financial responsibility; usually according to a fixed percentage;  Often coinsurance applies after first meeting a deductible requirement.


COMPLAINTS:  Complaints by members may be generally defined as problems that members bring to the attention of the managed care plan. Complaints that are not resolved to the satisfaction of the member may evolve into formal grievances.


CONCURRENT REVIEW:  This describes the process where a managed care plan reviews services that are currently being provided for medical necessity.  What this means is that, while a particular service may be covered, the managed care plan may review the service to determine whether there continues to be a legitimate, covered clinical reason for that service to continue. In the event that the managed care plan determines that the service is not clinically indicated, the service may be denied for continued coverage under the plan.


CO-PAYMENT:  A cost-sharing arrangement in which a plan member pays a specific charge for a specified service, such as $10 for an office visit.  The member is usually responsible for payment at the time the health care is rendered.


A discount that lowers the amount you have to pay out-of-pocket for deductibles, coinsurance, and copayments. You can get this reduction if you get health insurance through the Access Health CT, your income is below a certain level, and you choose a health plan from the Silver plan category.  https://www.healthcare.gov/medicaid-chip/eligibility/


DATE OF SERVICE:   The date on which health care services were provided


DEDUCTIBLE:  The amount of eligible expense a person must pay each year from his/her own pocket before the health plan will make payment for eligible benefits.  It is important to understand that this is in addition to the premium amounts that a person must pay for the insurance.  However, preventive services are not subject to the deductible, and will be covered with no cost to the member.


DENIAL:  The managed care plans decision to disallow or reject the services based on specifics outlined in the enrollees contract with the plan.


DRUG FORMULARY:  A listing of prescription medications, sometimes referred to as a “preferredlist, which is approved for use and/or coverage by the plan and which will be dispensed through “participating” pharmacies to a covered member. The list is subject to periodic review and modification by the managed care plan.  Medications may be classified in Tiers, with varying cost sharing dependent on the tier.

DURABLE MEDICAL EQUIPMENT (DME):  Equipment which can stand repeated use, is primarily and customarily used to service a medical purpose, and is appropriate for use at home. Examples include hospital beds, wheelchairs and oxygen equipment.

EFFECTIVE DATE:    The date on which the insurance under a policy begins


EMERGENCY:  A true medical emergency is a sudden and unexpected onset of a condition in which delay in treatment would endanger the enrollees life or health. Examples include: difficulty breathing, excessive bleeding or chest pain.


EXCLUSIONS:  Specific conditions or circumstances listed in the policy for which the policy will not provide benefit payments.  It is important to understand that Exclusions may modify otherwise covered services.  For example, a plan may offer benefits for speech language pathology(SLP) treatment, but in the Exclusion section, may clarify that SLP benefits are only covered in specific circumstances, and that all other reasons a person might need SLP would not be covered, or would be excluded, from coverage under the plan.


Medical, surgical or other health care services, supplies, treatments procedures or devices that are determined by the health plan to be either:


1. not generally accepted by informed health care professionals in the U.S. as effective in treating the condition, illness or diagnosis for which their use is proposed, or

2. not proven by scientific evidence to be effective in treating the condition, illness or diagnosis for which their use is proposed

3. not part of a clinical trial that allows coverage for specific treatment to certain qualified enrollees


EXPLANATION OF BENEFITS (EOB):  The statement sent to members by their health plan listing services provided, amount billed and payment made, as well as cost sharing balances, and reasons for claim denial and appeal options, if applicable.


EXTERNAL REVIEW:  In the event that the managed care plan has denied a benefit under your plan, you may submit an appeal directly to the plan, explaining why that the service should be covered.  Staff at the plan will review the appeal and make a determination about whether the initial denial was appropriate, and uphold the denial, or not, and reverse the denial, covering the benefit.  If the denial is upheld at through the internal appeal process, there may be an opportunity to have an independent, third-party review the claim and make a binding decision. 


Services denied because the insurer deemed them to be not medically necessary or experimental or investigational in nature are eligible for external review.  If the Independent Review Organization (IRO) reviews the denial and determines that the denial was improper, the service will be approved and the managed care plan must cover the benefit.

Depending on whether your plan is fully or self insured, your external appeal options and processes will vary.


GROUP INSURANCE:  An insurance plan by which a number of employees (and their dependents), members of a similar homogeneous group, are insured under a single policy, issued to their employer or the group with individual certificates or insurance given to each insured individual or family.


GENERIC DRUG:  A chemically equivalent copy designed from a brand name (or single source) drug that has an expired patent, or drug substitute. A generic is typically less expensive and sold under a common or genericname for that drug, not the brand name.


GRIEVANCES:  Are formal complaints unresolved by the plan; managed care plans are required to have a formal internal grievance procedure according to a time sensitive established review system. Grievances and appeals are now referred to in the same manner. See CGS § 38a-591a et seq.


HEALTH MAINTENANCE ORGANIZATION (HMO):  A company that provides, offers or arranges for coverage of health services needed by plan members for a fixed, prepaid premium. In Connecticut, such organizations are licensed as health care centers


HIPAA (Health Insurance Protection and Portability Act):  Public Law 104-191, was signed into law on August 21, 1996 with its primary intent to provide better access to health insurance, limit fraud and abuse and reduce administrative costs. It requires the U.S. Department of Health and Human Services to develop standards for maintenance and transmission of health insurance information to protect the security and confidentiality of this data.


HUSKY:  This is Connecticut’s Medicaid program that provides health coverage to eligible children, parents, relative caregivers, elders, individuals with disabilities, adults without dependent children, and pregnant women.  For more about eligibility for the different programs and benefits, look here.


IN-NETWORK PROVIDER:  For most managed care plans, members will have access to a specific network of healthcare providers who have agreed to deliver medical services to plan members at a discounted rate.  In order to limit your financial liability for the cost of healthcare services, it is important that you use in-network providers whenever possible, since providers who are not in your plan’s network may charge you the full amount for their service.


MANAGED CARE ORGANIZATIONS (MCOs):  MCOs Are health maintenance systems that are responsible for both the financing and the delivery of a broad range of health services to an enrolled population. They provide health care services through a network of certain doctors, hospitals and other health care providers to give a range of services to plan members. The acronym “HMO(health maintenance organization”) is often interchangeable with “MCO”.

MEDICAL NECESSITY:  This term describes services that are consistent with a diagnosis, meet standards of good medical practice, and are not primarily for the convenience of patient or provider. This definition and how it is used varies from plan to plan and will provide the basis for coverage in that the plan only pays for services that meet the plans medical necessity criteria.


MEDICARE:  The federal health insurance program for older Americans and the disabled. www.medicare.gov (5/15/15)


MEDIGAP POLICY:  A health insurance policy designed to supplement Medicare coverage.


MEMBER:   State law defines a “consumer” as a resident of the state who receives services from an MCO. The managed care industry defines each consumer with insurance coverage under a health plan as a member”. Other terms used include enrollees and covered lives.


NETWORK:    A list of participating providers that participate with a managed care plan.


NON-COVERED SERVICE:  A medical service that is excluded from the plans contracted benefits. Non- covered services are outlined in the Summary Plan Description or Member Contract provided to the new enrollee.  See Exclusions.


OBSERVATION STATUS:  Hospitals provide observation care for patients who are not well enough to go home but not sick enough to be admitted.  This care requires a doctor’s order and is considered an outpatient service, even though patients may stay as long as several days. The hospitalization can include short-term treatment and tests to help doctors decide whether the patient should be admitted. Medicare guidance recommends that this decision should be made within 24 to 48 hours. Observation patients cannot receive Medicare coverage for follow-up care in a nursing home, even though their doctors recommend it.  To be eligible for nursing home coverage, seniors must have first spent at least three consecutive days (through three midnights) as an admitted patient, not counting the day of discharge.   http://kaiserhealthnews.org/news/observation-care-faq/ (5/5/15)

Connecticut law requires that hospitals provide patients with oral and written notice of their observation status within 24 hours of the determination. 


OPEN ACCESS:  A term describing a members ability to self-refer for specialty care; Open access arrangements allow a member to see a participating specialty provider without a referral from another doctor.


OPEN ENROLLMENT:  The period during which consumers may choose to enroll in a health plan or change health plan coverage.  Open Enrollment for different plans/programs are held at different times, but in most cases except for Medicaid and absent a Qualifying Life Event or Special Enrollment Period (not common), you will not be able to enroll for coverage outside of the Open Enrollment period.


OUT-OF-POCKET PAYMENTS:  The portion of the cost for services borne directly by a consumer/member.  For example, co-pays and co-insurance that you pay towards routine care is considered an out of pocket cost.  


OUT OF NETWORK:  A term describing the treatment obtained by a member outside the plan’s provider network.


OUTPATIENT:  A consumer who is receiving ambulatory care at a hospital or other health facility without being admitted to the facility



A provider who has contracted with a managed care organization to deliver medical services to enrollees for an agreed upon fee.


Health reform act passed in 2010. Also referred to as “Obamacare,” this Act makes numerous reforms to insurance delivery, creates health insurance exchanges for the purchase of insurance for uninsured residents, expands Medicaid eligibility and reforms Medicare. For more information, see  www.healthcare.gov. (5/15/15)


PEER TO PEER REVIEW:  In the event that you have had coverage for a service denied, your healthcare provider who ordered the service may request to speak with a medical director at your managed care plan.  At this conference, your provider will discuss the reason for the requested service, along with supporting clinical evidence, with the plan’s medical director.  As a result of this discussion, the medical director may reverse the initial denial and authorize the service based on the additional information gained during the peer to peer review.   A peer-to-peer is only allowed before 1st appeal submitted.


PHI -  (Protected health information) is defined in 45 CFR 160.103, where ‘CFR’ means ‘Code of Federal Regulations’, and, as defined, is referenced in Section 13400 of Subtitle D (‘Privacy’) of the HITECH Act.  “Protected health information means individually identifiable health information”. For more information visit: http://www.hipaa.com/hipaa-protected-health-information-what-does-phi-include/  (5/15/15)


POINT OF SERVICE (POS) PLAN:  This type of plan is a blend of the HMO and PPO plans. Members may see providers either in-network or out of network, but must be referred for OON service by their PCP else be responsible for the full charge for the service.  Care receiving from a non-participating provider typically will include deductibles and coinsurance.

PRE-EXISTING CONDITION:  Any medical condition that has been diagnosed or treated within a specified period immediately preceding the enrollees effective date of coverage under the group contract. Pre-Existing Condition is not allowed under the ACA.


PREFERRED PROVIDER ORGANIZATION (PPO):  A network of health professionals who agree to provide medical services to plan enrollees for discounted rates. Plan enrollees may go out of network to seek medical services from non-affiliated medical professionals. Enrollees pay higher out of pocket charges for services by providers who are not in the PPO.


PRIMARY CARE PHYSICIAN (PCP):  A doctor who provides, arranges, authorizes, coordinates and monitors the care of managed care members. Upon joining a managed care plan a member chooses such a doctor from an extensive list of network physicians. In general, family practitioners, internists and pediatricians are usually considered PCPs. Under CT law and the ACA, OB/GYNs may also be PCPs.


PRE-AUTHORIZATION (or PRE-CERTIFICATION):  The process of obtaining coverage approval for a service or medication from the managed care plan before receiving the service. Most managed care plans require such approval for services to a non-participating provider or facility, non-covered medication, continued care for specific services, or exception to a benefit plan.


For fully insured plans, once a pre-authorization or pre-certification has been granted, it cannot be reversed if the service it approved a) has already taken place or b) is less than 3 days from the date of the attempted reversal.


PROVIDER:  A physician, hospital, nursing home, pharmacy or any individual or group of individuals that provides a health care service


QUALIFIED HEALTH PLAN (QHP):  Insurance plan that meets the minimum requirement for coverage under the ACA and

Connecticuts Exchange


REFERRAL:  The process by which a managed care patients primary care doctor recommends or authorizes treatment from a medical specialist or facility; Some types of referrals also require approvals by the managed care plan as well as the doctor.


RIDER:  A legal document which modifies the protection of an insurance policy, either expanding or decreasing its benefits, or adding or excluding certain conditions from the policys coverage


Release of Information (ROI):  Release of information must comply with state and federal guidelines to obtain medical records and/or receive/release PHI. Patient Authorization for Release of Mental Health - A separate, specific authorization is required for the disclosure of mental health/substance abuse records.


SELF-INSURED PLANS:  In a self-insured (or self-funded) plan, the costs of medical care are borne by the employer on a pay-as-you-go basis. The plan sponsor (usually a large employer like GE or Pitney Bowes) decides what services are covered. A managed care plans (HMO, etc.) may be contracted with by the employer for the process of paying claims.  These plans are not subject to Connecticut law, but instead are governed under federal ERISA.


SERVICE LIMITS:  Certain number of times you may use a health service and a certain time period when you may use a service. This does not apply to ACA plans or Fully-Insured plans.


SKILLED NURSING FACILITY (SNF):  An institution providing skilled nursing and related services to residents; a nursing home


SUMMARY PLAN DESCRIPTION:  A description of the entire benefit package available to an employee covered by a self- insured plan.


SUBSCRIBER:   An individual and eligible dependent. Also referred to as member


URGENT CARE:  Occurs when a patient has an illness that is not life-threatening but requires immediate attention


USUAL, CUSTOMARY AND REASONABLE REIMBURSEMENT (UCR):   The rate of payment to a doctor based on the commonly charged or prevailing fees for health services within a geographic area; a fee is considered to be reasonable if it falls within the parameters of the average or commonly charged fee for the particular service, (e.g. x-ray) within that specific community, (e.g. New Haven county)


UTILIZATION REVIEW (UR):  The assessment process that determines the medical necessity and appropriate level of care provided to members. A review may take place either before the services can be provided or while they are being provided in order to decide whether to pay for those services. Services denied by UR can be appealed.

Content Last Modified on 9/15/2017 6:53:11 PM