California Small Group Health
Insurance- Glossary of Terms
This is a guide of the simple
terminology generally used when
reviewing and describing Small
Group health insurance plans.
Greater detail is also covered
in our section on
Understanding Your Small Group
Health Insurance Quote.
Deductible – The deductible is
the expense out of pocket for
the member which you pay first,
before the health insurance
carrier kicks in and starts
helping you with the bill
Co-Insurance – Co-insurance is
the phase of expense
reimbursement where the
subscriber is splitting the bill
wit the California Small Group
insurance carrier. Usually the
health insurance provider pays
the larger portion of the split
percentage. For example, if you
were to say 80/20 coverage or
80% coinsurance, the insurer
would pay the 80% and the member
pays 20%.
Co-Pay – A co-pay benefit is
where a small flat dollar amount
covers the entire medical
expense for the subscriber.
For example, a member might have
a $10 co-pay for a visit to the
doctor’s office for the common
cold.
Maximum Out-Of-Pocket - Max Out
of Pocket is essentially the
subscribers stop loss number.
The health insurance company
provides coverage at 100% once
the max out of pocket is reached
annually. It is not a per
condition or claim limit.
Maximum Out-Of-Pocket is also
referred to as Co-Pay Limit
sometimes.
Preferred Provider Organization
(PPO) - Healthcare providers who
participate in an insured
company's contracted PPO network
are paid fees for their
services.
Health Maintenance Organization
(HMO)- Healthcare provider of
managed care where the
California group health insurer
has a contract for specific
treatment types through
contracted doctors, hospitals,
and medical groups. You can
read more in our guide covering
understanding the differences
between HMO’s and PPO’s.
Catastrophic Coverage- There
are different types of
‘catastrophic coverage’
available and the meaning is
often casually defined. Mainly
catastrophic coverage plans fall
into plans that only cover
either medical expenses only
which are tied to an inpatient
hospital stay, or plans with
very high deductibles where the
member pays most or all medical
expenses which are small or
medium until the high deductible
is reached.
Generic Prescriptions- Generic
prescription drugs are
medications which contain the
active ingredients of Brand Name
prescription drugs, but are sold
at a lower cost because the
original drug manufacturer no
longer has the exclusive right
to market the medication.
Generic drug companies do not
have the research and
development costs the original
Brand drug manufacturers had
when producing the drug and
bringing it to market.
Brand Prescriptions- Brand Name
drugs are offered by the
official licensee of the
medication who has an original
formula for treating one or
several conditions. Brand
drugs, once approved for release
on the market, can be sold for 7
years exclusively by the drug
manufacterer or distributor.
Pre-Existing Condition- A
waiting period can be impose for
pre-existing conditions on a new
employee member if prior
creditable coverage was not in
place for any or all of the six
monts prior to the effective
date of the employees effective
date. If the employee had
coverage for partial periods in
the 6 months prior those months
will lessen the waiting period
for coverage for pre-existing
conditions only for the number
of months the employee had the
coverage. Pre-existing
conditions will usually not
exist on HMO plans. A
pre-existing condition is a
medical condition for which
someone consulted a physician or
provider within the last 6
months. Pre-existing conditions
are covered in greater detail in
our Pre-Existing Condition
and New Hire Waiting Period
section.
Other
important
resources:
California
Small Group
health quote
California
Small Group
online
doctor
listing
California
Group
Enrollment
and
Eligibility
Center
