Glossary

Coinsurance – Your share of the cost of a covered health care service, calculated as a percent (for example, 20%) of the allowed amount for the service, typically after you meet your deductible. For instance, if your plan’s allowed amount for an office visit is $100 and you’ve met your deductible (but haven’t yet met your out-of-pocket maximum), your coinsurance payment of 20% would be $20.

Copay – The fixed amount, as determined by your insurance plan, you pay for health care services received.

Deductible – The amount you owe for health care services before your health insurance or plan sponsor (employer) begins to pay its portion. For example, if your deductible is $1,000, your plan does not pay anything until you’ve met your $1,000 deductible for covered health care services. This deductible may not apply to all services, including preventive care.

Employee Contribution – The amount you pay for your insurance coverage (e.g., Buy-Up STD, LTD, GUL).

Evidence of Insurability (EOI) – An application process in which you provide information on the condition of your health or your dependent’s health in order to be considered for certain types of insurance coverage (e.g., Buy-Up STD, LTD, GUL).

Explanation of Benefits (EOB) – A statement sent by your insurance company that explains which procedures and services were provided, how much they cost, what portion of the claim was paid by the plan and what portion is your liability, in addition to how you can appeal the insurer’s decision. These statements are also posted on the insurance company’s website for your review.

Flexible Spending Accounts (FSAs) – A special tax-free account you put money into that you use to pay for certain out-of-pocket health care costs. This means you’ll save an amount equal to the taxes you would have paid on the money you set aside. Flexible Spending Accounts are “use it or lose it,” meaning that funds not carried over and used by the end of the plan year will be lost. There are multiple types of FSAs:

• Health Care FSA (HCFSA) – A pretax benefit account used to pay for eligible medical, dental and vision care expenses that aren’t covered by your insurance plan or elsewhere. All expenses must be qualified as defined in Section 213(d) of the Internal Revenue Code. Please note that over-the-counter medications are not eligible for reimbursement without a doctor’s prescription with the Health Care FSA.
• Limited Purpose FSA (LPFSA) – A Flexible Spending Account that can be used in conjunction with a Health Savings Account (HSA). You can use an LPFSA to pay for eligible out-of-pocket dental and vision expenses.
• Dependent Care FSA (DCFSA)– A pretax benefit account used to pay for dependent care services, such as preschool, summer day camp, before- or after-school programs and child or elder daycare. For additional information on eligible expenses, refer to Publication 503 on the IRS website.

Health Savings Account (HSA) – A personal health care bank account funded by your or your employer’s tax-free dollars to pay for qualified health care expenses. You must be enrolled in a high-deductible health plan to open an HSA. Funds contributed to an HSA roll over from year to year and the account is portable, meaning if you change jobs your account goes with you.

High-Deductible Health Plan (HDHP) – A plan option that provides choice, flexibility and control when it comes to spending money on health care. Preventive care is covered at 100% with in network providers, there are no copays, and all qualified employee-paid medical expenses count toward your deductible and your out-of-pocket maximum.

Network – A group of physicians, hospitals and other health care providers that have agreed to provide medical services to a health insurance plan’s members at discounted costs.

• In-Network – In-network providers are doctors, hospitals and other providers that contract with your insurance company to provide health care services at discounted rates.
• Out-of-Network – Out-of-network providers are doctors, hospitals and other providers that are not contracted with your insurance company. If you choose an out-of-network doctor, services will not be provided at a discounted rate.

Out-of-Pocket Maximum – The most you pay during a policy period (usually a 12-month period) before your health insurance or plan begins to pay 100% of the allowed amount. This limit does not include your premium, charges beyond the Reasonable & Customary, or health care your plan doesn’t cover. Check with your health insurance provider to confirm what payments apply to the out-of-pocket maximum.

Over-the-Counter (OTC) Medications – Medications made available without a prescription.

Prescription Medications – Medications prescribed to you by a doctor. Cost of these medications is determined by their assigned tier: generic, preferred brand, non-preferred band, or specialty.

• Generic Drugs – Drugs approved by the U.S. Food and Drug Administration (FDA) to be chemically identical to corresponding preferred or nonpreferred versions. The color or flavor of a generic medicine may be different, but the active ingredient is the same. Generic drugs are usually the most cost-effective version of any medication.
• Maintenance Drugs – Medications prescribed for chronic, long-term conditions and are taken on a regular, recurring basis. Examples of chronic conditions that may require maintenance drugs are high blood pressure, high cholesterol and diabetes.
• Preferred Brand Drugs – Brand-name drugs on your provider's formulary list that are favored by a prescription plan based on drug effectiveness and cost. Express Scripts maintains its own formulary list, which it updates periodically.
• Nonpreferred Brand Drugs – Brand-name drugs not on your provider’s list of preferred drugs. These drugs are typically newer and have higher copayments.
• Specialty Drugs – Prescription medications used to treat complex, chronic, and often costly conditions such as multiple sclerosis, rheumatoid arthritis, hepatitis C and hemophilia. Because of the high cost of these specialty drugs, many insurers require that specific criteria be met before a drug is covered. Under the pharmacy benefits provided (through Express Scripts) when you enroll in a WSP Aetna medical plan option, specialty medications may only be covered when ordered through Accredo, Express Script’s specialty pharmacy. Accredo is dedicated to helping you meet the particular needs and challenges of using specialty medications, many of which require injection or special handling.

Reasonable and Customary Allowance (R&C) – The amount paid for a medical service in a geographic area based on what providers in the area usually charge for the same or similar medical service. The R&C amount sometimes is used to determine the allowed amount.

Summary of Benefits and Coverage (SBC) – Mandated by health care reform, your insurance provider or plan sponsor will provide you with a clear and easy-to-follow summary of your benefits and plan coverage.

Summary Plan Description (SPD) – A document that explains the fundamental features of an employer’s defined benefit or defined contribution plan, including eligibility requirements, contribution formulas, vesting schedules, benefit calculations and distribution options.