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Glossary of Terms
A benefit of life insurance that allows an insured who is terminally ill or unable to perform two or more activities of daily living without substantial assistance to ask that a portion of his or her life insurance benefit be payable in advance to pay for required care. The life insurance benefit payable at death is reduced by the amount of the accelerated benefit that is paid.
Accidental Death and Dismemberment insurance
A form of health insurance that provides payment in the event of death or specific bodily losses resulting from an accident.
All Risk Policy/Open-Peril
A policy which covers loss caused by any peril which is not excluded, as contrasted to named peril policies which protect against certain perils named in the policies.
An applicant (risk) for automobile or workers’ compensation insurance declined by one or more companies may be assigned to a designated company as directed by a recognized authority.
A list showing how benefits are arranged for employees. For example: life insurance may be two times annual salary for in-office employees and two times commissioned earnings (excluding bonuses) for sales employees. It would also show any maximum benefit periods, elimination periods and any other variables along with premium amounts.
Co-insurance or co-payment
A provision in a health insurance contract by which the insurer and insured share, in a specific ratio, payment of the covered losses.
A failure to disclose a material fact which may void an insurance policy.
The right given to an insured person under a group insurance contract to change coverage, without evidence of medical insurability, to an individual policy upon termination of the group coverage.
The amount of covered expenses that must be incurred and paid by the insured before benefits become payable by the insurer.
A dental insurance plan that pays benefits in a predetermined amount in the event of a covered loss.
Disability income insurance
A form of insurance that provides periodic payments when the insured is unable to work as a result of illness or injury.
A specified number of days at the beginning of each period of disability during which no disability income benefits are paid.
Employee Assistance Program (EAP)
Provides family support services that address a variety of concerns such as legal support, bereavement counseling, eldercare counseling and other issues.
A document with language attached to and becoming part of the basic policy for the purpose of amplifying or modifying it, either at its inception or during its term.
Exclusive Provider Organization (EPO)
A network of individual medical care providers, or groups of medical care providers, who have entered into written agreements with an insurer to provide health insurance to subscribers. The insurer makes payment on behalf of a subscriber only if the medical expenses are derived from the designated network of medical care providers.
A policy which covers property at many locations, even worldwide and in the course of transit.
A provision allowing employees to be accepted for the group insurance generally without having to provide medical evidence of insurability.
Health Maintenance Organization (HMO)
A type of managed care organization (MCO) that provides a form of health care coverage that is fulfilled through hospitals, doctors, and other providers with which the HMO has a contract. Unlike traditional indemnity insurance, an HMO covers only care rendered by those doctors and other professionals who have agreed to treat patients in accordance with the HMO's guidelines and restrictions in exchange for a steady stream of customers.
A form of health insurance that provides a stipulated daily, weekly or monthly payment to an insured during hospital confinement, without regard to the actual expenses of the confinement.
Maximum benefit period
The maximum length of time for which benefits are payable during any one period of disability.
Point of Service (POS)
A plan in which members select a primary care physician from a list of participating providers, like in an HMO. All medical care is directed by this physician, so he/she is the “point of service.” This doctor will normally refer members to other in-network physicians if they have a need for specialist care. There is a broad base of medical providers in the network which typically covers a wide geographic area.
Preferred Provider Organization (PPO)
An arrangement in which a third party payer or an independent administrator contracts with a number of medical care providers to furnish services at lower than usual fees in return for prompt payment and a certain volume of patients.
A term often relating to dental insurance that includes benefits for treatments such as regular exams and cleanings designed to help prevent more serious conditions such as gum disease.
A mental or physical problem suffered by an insured prior to the effective date of insurance coverage.
Relating to group insurance, the employee's share of premiums deducted from his or her payroll earnings and then paid to the insurance company by the employer.
A provision of voluntary coverages that allows a terminating employee (other than for reason of retirement or disability) to continue coverage at the same or reduced benefit amount to a stipulated age, depending on the coverage.
Seat belt benefit
A provision in accidental death insurance that increases the accidental death benefit if an insured suffers loss of life in a vehicle accident and was wearing a seat belt at the time of the accident.
When an employer provides a qualified group health plan, manages the payments to the plan and pays claims from the fund of employer and employee payments.
Refers to an insurance plan being sold by itself and not being bundled with another product. For example: Selling life insurance on its own would be "stand-alone." Requiring life insurance to be sold with medical insurance would be a "bundled coverage."
A specified number of days that the insured must wait before becoming eligible for coverage. It could also apply to the time an insured is required to wait before becoming eligible for a certain type of benefits. For example, a new insured may have to be continuously insured for 12 months before becoming eligible for benefits for major services under voluntary dental insurance.
W-2 Reporting Requirements
On March 31, 2011, the Internal Revenue Service (IRS) released the 19-page Interim Final Rules on the Health Care Reform W-2 reporting requirements. The IRS is still taking comments on the rules for the next 60 days. Read more about W-2 Reporting.