|
Activities of daily
living
Those activities performed as part of an individual's daily self-care
routine. These include bathing, dressing, eating, transference and
toileting. Commonly used as a gauge for disability benefits.
Adjusted community rating
See also (community rating). Health insurance premium adjustments
made based on group-specific demographics.
Administrative services only (ASO)
Services provided by a third-party health care vendor that are limited
to administrative services for an employer group, absent of any risk-sharing
arrangement for the cost of health care. Frequently sought when an
employer self-insures health care benefits but does not wish to perform
administrative functions.
Administrator
The fiduciary subject to ERISA requirements who is responsible for
the administration, operation and management of a benefits plan.
Adverse selection
Situation in which in insurance carrier enrolls members who are disproportionally
higher risk than the average member of a group as a whole.
Allowable costs
Those charges for services or supplies rendered by a health provider
that qualify as covered expenses.
Annuity
Typically a contract that provides income at regular intervals (either
level amounts or index-adjusted) for a specified period of time, usually
a set number of years for life. May be purchased as an investment
under a plan or distributed to plan participants as a form of benefits.
Asset reversion
The recovery by a sponsoring employer of any pension fund assets
in excess of those required to pay accrued benefits under a terminated
defined benefits plan. The recovered assets are subject to regular
corporate income tax plus an excise tax of either 20% or 50%, depending
on subsequent retirement arrangements made for employees.
Assignment of benefits
An arrangement under which claimants request that their benefit
payments be made directly to a designated person or facility, such
as a doctor or hospital.
Average length of stay
A health care service measure indicating the average number of days
a patient spends in the hospital for each admission. Hospitals and
employers commonly use this average as one factor in assessing quality
of care relative to other institutions.
Average wholesale price
The standardized cost of a prescription drug arrived at by averaging
the cost of a nondiscounted pharmaceutical charged to a pharmacy provider
by a large group of wholesalers.
Return to the
Top
Balance billing
Submitting an invoice to a patient for the difference between the
original charge for health care services and the amount paid by Medicare.
Bank investment contract (BIC)
A contract similar to a GIC (see guaranteed investment contract) but
issued by a bank.
Bed disability days
The days when an individual is kept in bed either all or most of the
day due to illness or injury. Includes those work-loss and school-loss
days actually spent in bed.
Board certified
Indicates a physician who has passed an examination given by a medical
specialty board and who has been certified as a specialist in that
field of practice.
Return to the Top
Cafeteria plan
A plan in which participants may choose among two or more benefits
containing taxable or nontaxable compensation elements, i.e. cash
or (qualified benefits.) Participants may choose qualified benefits
by electing not to receive taxable cash compensation or currently
taxable benefits treated as cash.
Capitation
Financial arrangement between an employer and a health care provider
in which the former pays a fixed, usually monthly amount for all services
rendered to a beneficiary and the latter assumes risk for service
costs in excess of those amounts.
Case management
The process through which covered persons with specific health
needs are identified and counseled to achieve the most appropriate
levels of service utilization and optimum treatment outcomes.
CHAMPUS
The Civilian Health and Medical Program of the Uniformed Services.
Provides insurance coverage for armed forces personnel who are receiving
care from a nonmilitary facility.
COBRA
Consolidated Omnibus Budget Reconciliation Act. 1985 law that requires
employers to offer continued health insurance coverage to terminated
employees and their beneficiaries, restricted the definition of insured
termination for purposes of the Pension Benefit Guaranty Corp. and
raised the employer's annual PBGC premium rate.
Return to the Top
Collectively bargained plan
A plan with benefits provided as the result of good-faith negotiations
between an employer or group of employers and employee representatives,
primarily unions. Terms are usually spelled out in a collective bargaining
agreement."
Coordination of benefits
Occurs when an individual is covered by more than one group medical
program and payments must be coordinated to avoid duplication of benefits.
Core alternative
Under an ERISA 404(c) plan, a participant's choice from among at least
three investment alternatives representing a range of options. Each
must be diversified and have different risk and return characteristics.
CPT codes
Current procedural terminology. List of medical services assigned
five-digit codes that have become the standard reference for billing
and reporting.
Return to the Top
Deductible
Fixed amount for insured medical services that must be paid by the
beneficiary prior to any claims reimbursement by the benefit plan.
Defined contribution plan
A qualified retirement plan in which specified contributions are
made to the individual accounts of participants. Benefits are based
solely on those contributions and their investment performance. Accumulated
amounts may also include employer contributions from accounts of other
employees who left the organization before becoming fully vested.
Disease management
An information-based process involving the continuous improvement
of value in all aspects of care (prevention, treatment and management)
throughout the continuum of health care delivery.
Drug utilization review
A system for analyzing physician prescribing patterns or targeted
drug use intended to determine and influence appropriate treatment.
Return to the Top
Employee self-service
Generally an employer's efforts to give employees more access to and
control over human resource or benefits data that pertains directly
to them through access from personal computers, video kiosks or interactive
voice response systems. Also referred to as disintermediation.
Employee self-service
The Employee Retirement Income Security Act of 1974. Federal statute
that regulates qualified private employee benefit plans. It incorporates
Internal Revenue Code and labor law provisions and imposes fiduciary
responsibilities and other standards on both pension and welfare plans.
Employee stock ownership plan (ESOP)
An individual account plan that provides shares of stock in the
sponsoring company to participating employees-retirement plans. 'Leveraged'
ESOPs are permitted to borrow money.
Employee welfare plan
Any plan, fund or program established and maintained by an employer
to provide its participants with any benefits other than retirement
or pensions.
Exclusive provider organization
A health care plan that covers only the services of designated
providers.
Experience rating
A health insurance plan that bases premiums on the past cost experience
of the enrolled group.
Return to the Top
401(k) plan
A tax-qualified defined contribution plan that allows participants
to make contribute pre-tax dollars through salary reduction.
Fee-for-service
A traditional reimbursement in which a health care provider receives
a payment equal to their billed charge for each unit of service.
Fiduciary
A person who exercises discretionary control or authority over management
of a benefit plan, often identified in relationship to a pension or
retirement savings plan.
Firewall protections
Safeguards established to protect pricing information of pharmacy
benefit management companies from their competitors or from drug manufacturers.
Also, computer software protections against data access by unauthorized
persons.
Flexible benefit plan
Sometimes referred to as a (cafeteria) plan, a qualified arrangement
that lets beneficiaries choose from among a combination of taxable
and non-taxed forms of compensation, such as health insurance, 401(k)
plan contributions, dependent are or vacation days.
Return to the Top
Gatekeeper
Typically in an HMO or similar managed care plan, a primary care provider
who serves as the patient's entry point to the system and often controls
patient access to physician specialists.
Generic drug
A prescription drug that is chemically equivalent to a brand-name
product with an expired patent, dispensed under its generic chemical
name. Generally less expensive than branded products, pharmacy benefit
plans often measure the success of cost-cutting techniques by monitoring
substitution of generics for brand names ("generic fill rate").
GIC
Guaranteed Investment Contract. A negotiated contract issued by an
insurance company which specifies how and when contributions are made,
the applicable interest rate and length of time to maturity. Common
option under 401(k) plans.
Group universal life insurance
Usually an employee-pay-all program that provides employees with universal
life insurance and offers a choice between a fixed death benefit and
a benefit that is a multiple of compensation plus the policyÕ s cash
value at time of death.
Return to the Top
HCFA
Health Care Financing Administration. The federal agency, within the
Department of Health and Human Services, that administers Medicare
and oversees state administration of Medicaid.
HMO
Health Maintenance Organization. A prepaid managed medical plan that
arranges to provide specified services to enrolled members through
designated hospitals and doctors for a fixed premium per person. Model
types such as group, network, staff and independent practice association
refer to the contractual relationship between the plan and its providers.
Hospice
A program or facility that provides palliative care and support for
the terminally ill.
Return to the Top
Indemnity plan
A health insurance program that provides specific cash reimbursements
for covered services. Payments may be made directly to the patient
or assigned to a provider.
IRA
Individual Retirement Account. A trust or custodial account for the
exclusive benefit of an individual or his/her beneficiary. By law,
certain individuals can make tax-deductible contributions up to a
fixed annual amount, currently $2,000.
IRC
The Internal Revenue Code of 1986, as amended.
Return to the Top
Job sharing
Form of flexible work schedule strategy in which two people voluntarily
share one full-time job with prorated salary and benefits.
Keogh plan
A qualified retirement plan (either defined benefit or defined contribution)
for self-employed persons, although not excluding coverage for other
employees. Tax-deductible contributions up to an annual limit may
be made in compliance with the IRC.
Return to the Top
Large case management
Management of catastrophic illnesses.
Length of stay
Number of days a plan member spends as a hospital inpatient. LOS
is often mentioned as an indicator or quality and/or cost efficiency
when assessing how a facility treats patients with a given condition.
Long term care
Assistance and care for persons with chronic, often deteriorating
health conditions and those having difficulty with activities of daily
living.
Long term disability
Disability preventing an individual from continuing in an occupation
for which he/she was trained or educated, generally of two years or
more in duration.
Lump sum distribution
The distribution of the entire account balance from a defined
contribution plan or value of an accrued benefit from a defined benefit
plan.
Return to the Top
Mandated benefits
Those benefits, such as workers' compensation, that employers are
required to offer by state or federal governments.
Medically necessary
Health care service or treatment ordered by a provider that can not
be omitted without harming the patient's health status, as judged
against generally accepted standards of medical practice.
MEWA (multiple employer welfare arrangement)
A noncollectively bargained plan or arrangement maintained to provide
benefits to employees of two or more unrelated companies.
Money Purchase Pension Plan
A defined contribution plan with individual accounts wherein employer
contributions are usually determined as a fixed percentage of pay
and allocated to participantsÕ accounts.
Morbidity
Incidence and severity of illness in a given population.
Multiemployer plan
Plan to which two or more unrelated companies are required to contribute,
pursuant to a collective bargaining agreement with one or more groups
representing employees, usually those engaged in similar types of
work.
Return to the Top
Nondiscrimination rules
Rules denying an employer, employee or both the benefit of tax advantages
if the plan discriminates in favor of highly compensated or key employees
as demonstrated by government-specified tests.
Normal retirement
The age or other point at which a pension plan member can retire and
immediately receive unreduced benefits.
Outcomes measurement
Processes used to track a patient's clinical progress and responses
to various treatments, for purposes of identifying those treatment
pathways to lead to the most desirable outcome as measured by morbidity
and functional status.
Outsourcing
Popular employer means of eliminating in-house management, administrative
and/or clerical duties associated with a particular benefit by contracting
with an external service provider specializing in that particular
benefit area.
Return to the Top
Parental leave
Leave benefits for mothers or fathers offered by employers voluntarily
or as mandated by federal The Family and Medical Leave Act of 1993,
state-mandated disability insurance or agreed to through a collective
bargaining agreement.
Participating provider
A hospital, physician, pharmacy or other provider to agrees to serve
plan members under terms of a sponsoring network such as an HMO or
PPO.
Pharmacy and Therapeutics committee (P&T)
Panel of doctors from various medical specialties who advise a
health plan on use of prescription drugs. Typically a focal point
of decisions about which drugs will be included on an open or closed
formulary and covered by reimbursement.
Pharmacy benefit manager (PBM)
Service vendors that contract to manage an employerÕ s prescription
drug benefit. Services typically include development of formularies
and drug utilization review.
POS
Point of service plan. A health plan that allows members to choose
to receive services from a participating or nonparticipating network
provider, usually with a financial disincentive for going outside
the network. More of a product than an organization, POS can be offered
by HMOs, PPOs or self-insured employers.
PPO
Preferred Provider Organization. A managed health care plan in which
a network of providers agrees to serve a group of employees in a fee-for-service
arrangement, usually at discounted rates based on volume purchasing
power.
Profit sharing plan
A defined contribution plan where contributions are allocated among
participants' accounts according to an established formula, with payment
based on age, fixed number of years or occurrence of an event such
as disability.
Prospective payment system
Medicare reimbursement system established in 1983 which sets hospital
rates before delivery of service. Payments are based on costs occurring
within statistical norms around treatment of categories of illness,
knows as diagnosis related groups (DRGs).
Return to the Top
Qualified plan
Any employee benefit plan meeting applicable federal standards and
receiving tax-favored treatment by the Internal Revenue Service.
Return to the Top
Reinsurance
Also commonly known as stop-loss, reinsurance is coverage purchased
by a self-funded employer, at-risk managed care plan, or another insurance
company to protect against a payout of claims in excess of a designated
limit such as $25,000 or $50,000.
Relocation assistance
Benefits offered by an employer a current employee accepting an assignment
at a different worksite. Benefits might include reimbursement for
house-hunting expenses, household moving costs and interim travel
expenses.
Replacement rate
The designated percentage of a retiree's final income to be replaced
by retirement plan benefits.
Return to the Top
Savings plan
Also known as a (thrift plan), a defined contribution plan allowing
participants to make voluntary contributions up to a specified limit
and allowing employers to contribute, usually in the form of a percentage
match of employee contributions. Participant contributions are usually
made with after-tax dollars, a distinction between a cash or deferred
arrangement.
Secondary payer
In a coordination of benefits, an insurer whose coverage is subordinate
to that of another company, plan or program which is rightfully the
primary payer. Often mentioned in the context of Medicare's efforts
to recoup payments made as primary payer when other primary, duplicate
coverage existed.
Section 125 Plan
Synonymous with flexible benefit plans. Refers to the IRS code which
defines such plans and establishes that employee contributions may
be made with pre-tax dollars.
Self-dealing
An ERISA prohibition against actions undertaken by plan fiduciaries
for personal gain or profit, such as inappropriate use of plan assets
or accepting bribes or kickbacks from anyone dealing with the plan.
Self-funding/Self insurance
A health care benefit financing technique in which an employer pays
claims out of an internally funded pool, as permitted under ERISA.
Self-funded companies might or might not also be self-administered,
meaning they perform the administrative tasks associated with the
benefit as opposed to purchasing such services from an outside firm.
Short-term disability (STD)
Period of disability precluding normal occupational duties, generally
defined as lasting less than two years.
Social investing
An investments strategy that directs retirement plan money towards
funds or individual companies that espouse some form of social responsibility,
e.g., (green) funds that target investments reflecting environmental
awareness.
Split-dollar insurance
Life insurance polices in which the employer and employee share in
premiums, ownership and death benefits.
Subrogation
The ability of an insurance company to recover from a third party
all or part of benefits paid to an insured.
Summary plan description
A detailed description of all benefits offered to an employee as part
of the employers benefit package. A required document for all persons
covered by self-insured plans.
Return to the Top
Third party administrator (TPA)
An independent company or person who contracts with an employer
to provide administrative functions associated with a benefit or benefits
but does not assume or underwrite risk.
Top hat plan
A plan maintained by an employer primarily to provide deferred compensation
for highly compensated employees or certain members of upper management.
Total compensation
The aggregation of all wages, salaries and other cash payments and
employer payments for employee benefits.
Trustee
Any person or group of persons serving in a fiduciary capacity to
a plan.
Upcoding
Practice of health care providers who seek to maximize reimbursement
by coding a treated illness as more serious than presented.
Return to the Top
Vesting
Under a qualified retirement plan, the process or schedule by which
a participant earns nonforefeitable accrued benefits for account balances
representing employer contributions to the plan.
Voluntary employee beneficiary association
(VEBA)
A tax-exempt welfare benefit fund, regulated by the IRC, which pays
death, sickness, accident or other benefits to members, dependents
and/or beneficiaries.
Workers' compensation
State-mandated benefits to workers disabled by an occupational accident
or illness. Components include first-dollar coverage for medical services
and wage replacement. |
