Glossary of Terms
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Automated Clearing House (ACH): An electronic network for financial transactions in the United States. ACH processes large volumes of both credit and debit transactions, which are originated in batches.
Beneficiary: A person eligible for benefit under a health insurance policy.
Broker: A licensed legal representative of the policyholder, who negotiates with an insurance company on behalf of a customer, but is paid a commission by the insurance company.
Cancellation: Termination of insurance coverage during the policy period.
Carrier: An insurance company.
Claim: Form submitted to a payer (by a health care provider or patient) to request payment for items or services.
Co-payment (co-pay): A predetermined fee, in addition to what health insurance covers, that an individual pays for health care services. For example, a PPO may require a $20 "co-payment" for normal services delivered during a physician office visit.
Consolidated Omnibus Budget Reconciliation Act (COBRA): Requires group health plans with 20 or more employees to offer continued health coverage for employees and their dependents for 18 months after the employee leaves the job. Longer durations of continuance are available under certain circumstances.
Contributions: The amount of money contributed to a health plan.
Deductible: Cost-sharing arrangement between an insured person and health insurance company in which the insured person is required to pay a fixed dollar amount of covered expenses each year before the health insurance company will reimburse for covered health care expenses.
Dependent: A covered person who relies on another person for support or obtains health coverage through a spouse or parent who is the covered person under a health plan.
Eligible Expenses: The lower of the reasonable and customary charges or the agreed upon health services fee for health services and supplies covered under a health plan.
Exclusions and Limitations: Medical services that are either not covered or limited in benefit by a health insurance policy.
Family: Anyone you can claim as a dependent on your federal tax return qualifies as a family member. To meet the requirements for a family member they must be a "qualifying child" or "qualifying relative."
Generic Drug: A duplicate of a brand name drug. Once the brand name company's patent runs out, other drug companies are allowed to sell a duplicate of the original. Generic drugs are cheaper, and most prescription and health plans reward clients for choosing generics.
Health Insurance Portability & Accountability Act (HIPAA): A law that expands health care coverage for persons who have lost their job, or move from one job to another. HIPAA protects people who have pre-existing medical conditions, and/or problems, based on past or present health, in getting health insurance coverage.
Health Maintenance Organization (HMO): An insurance plan in which individuals or their employers pay a fixed monthly fee for services, instead of a separate charge for each visit or service. The monthly fees remain the same, regardless of types or levels of services provided. Services are provided by physicians who are employed by, or under contract with, the HMO.
Health Savings Account (HSA): A tax-advantaged personal savings account into which Individuals and employers can contribute money on a pre-tax basis to set aside funds for qualified medical care and expenses, including annual deductibles and co- payments. A person must enroll in a qualified High-Deductible Health Plan (HDHP) before they can establish an HSA.
High Deductible Health Plan (HDHP): A person must be enrolled in a qualified HDHP before they can establish an HSA. Not all high-deductible health plans qualify for purposes of establishing HSA eligibility.
HRA: (see Pre-funded HRA or Promise-to-Pay HRA)
In-Network: Providers or health care facilities that are part of a health plan's network of providers.
IRS 213(d) Expenses: Defines categories of "qualified medical expenses" that may be deductible on an individual income tax return or are reimbursable on a tax-free basis. Long-term Care: Policies that cover specified services for a specified period of time. Covered services often include nursing care, home health care services, and custodial care.
LyfeVault: An account unique to LyfeBank in which an individual may combine funds from multiple sources electronically to pay for "qualified medical expenses." Sources of funds for an individual or family LyfeVault account may be pre-tax contributions from HRAs established by one or more employers, the individual's own post-tax funds, the post-tax funds from a third party, a charitable contribution, or a government subsidy.
Medical Savings Account (MSA): The predecessor to the HSA. It has been impermissible to establish a new MSA since January 1, 2004. An MSA - like an HSA - is a tax-advantaged personal savings account used in conjunction with a high deductible health policy. Individuals can contribute money to this account on a pre-tax basis to set aside money for qualified medical care and expenses, including annual deductibles and co-payments.
Multiple Employers: Only LyfeBank's patent-pending LyfeVault program offers the benefit of pooling healthcare contributions from multiple employers for an individual or family.
Network Provider: Physicians, hospitals or other providers of medical services that have agreed to participate in a network, to offer their services at negotiated rates, and to meet other negotiated contractual provisions.
Open enrollment (for group plans only): A period each year during which employees have an opportunity to change their employer-provided health care coverage. One can usually choose among various plans from different health insurance providers. Over-the-Counter (OTC): A drug for which a prescription is not needed.
Out-of-Network: Refers to physicians, hospitals or other health care providers who are considered non-participants in an insurance plan. Depending on an individual's health insurance plan, expenses incurred by services provided by out-of-plan health professionals may not be covered, or covered only in part by an individual's insurance company.
Policy: The insurance agreement or contract.
Portable Healthcare Account (PHA): The LyfeBank account. Employers make deposits to accounts that LyfeBank maintains for employees. The employer's only responsibilty, unless they are using the PHA in connection with a group plan, is determining the amount to contribute they will contribute each month to employee accounts. Once deposited to employee accounts, the money is available to employees and their dependants to pay healthcare expenses. Any funds saved remain in the account, even after an employee leaves the employer. Funds are protected against employer bankruptcy or mismanagement.
Portability: This has multiple meanings: (1) The ability for an individual or family to take and access their LyfeVault to pay for qualified medical expenses anywhere in the United States and in many foreign countries; (2) An individually-owned medical insurance policy that an individual can take with them from job-to-job (increasingly, even across state lines (with some restrictions)); (3) The ability for an individual to transfer from one health insurer to another health insurer with regard to pre-existing conditions or other risk factors.
Pre-existing Condition: A health problem that existed before the date your insurance became effective. Each health insurance company uses its own particular definitions of pre-existing condition.
Pre-Tax: Contributions made to a benefit account with no deduction for local, state, or federal taxes.
Preferred Provider Organizations (PPOs): A network of health care providers in which a health insurer has negotiated contracts for its insured population to receive health services at discounted costs. Health care decisions generally remain with the patient as he or she selects providers and determines his or her own need for services.
Premium: The amount charged by a medical insurance carrier for health insurance coverage under a particular policy.
Preventive Care: An approach to health care which emphasizes preventive measures and health screenings such as routine physicals, well-baby care, immunizations, diagnostic lab and x-ray tests, pap smears, mammograms and other early detection testing. The purpose of offering coverage for preventive care is to diagnose a problem early.
Primary Care Provider: A health care professional responsible for monitoring an individual's overall health care needs.
Primary Care Physician: Usually an insured person's first contact for healthcare. This is often a family physician, internist, or pediatrician. A primary care physician monitors patient health, treats most patient health problems, and refers patients, if necessary, to specialists.
Promise-to-Pay HRA: This arrangement is similar to a line of credit, in which an employer promises to reimburse employees for certain qualified medical expenses, subject to a cap. Unused "funds" may or may not roll over to future periods but even if they do, the employee loses the benefit of the "promise" if they are terminated or leave the employer. This is very different from the LyfeBank Portable Healthcare Account (see above).
Reimbursement: Payment back to an individual of money spent out-of-pocket on qualified medical expenses, such as through an employer-sponsored HRA or an insurance company.
Renewal: A continuation of an insurance policy on revised terms, such as adjusted premium rates.
Risk: For a health insurance company, risk is the chance of loss, the degree of probability of loss or the amount of possible loss. For an individual, risk represents such probabilities as the likelihood of surgical complications, medications' side effects, exposure to infection, or the chance of suffering a medical problem because of a lifestyle or other choice.
Trust Account: A type of savings account, held according to the terms of a trust agreement by the trustee (for example, the major bank that is the trustee for the LyfeVault funds, where payments from the fund can be made only in compliance with the trust agreement.
Zero Balance Account (ZBA): A checking account in which a balance of zero is maintained by automatically transferring funds from a master account in an amount only large enough to cover checks presented.