Introduction to Health Insurance terms.

 

  • Assignment of Benefits: Your signed authorization to your doctor or hospital (medical provider) assigning payment to be made directly to them for your medical treatment.

 

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  • Business Day: Every day an insurance company is open for business, which excludes Saturday, Sunday, and state and federal holidays.

 

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  • Calendar Day: Every day of the calendar month, which includes Saturday, Sunday, and state and federal holidays. However, if any action tied to a time frame in an insurance policy or CDI regulation or code falls on a Saturday, Sunday, or state or federal holiday; then the action is postponed to the next calendar day that does not fall on a Saturday, Sunday, or state or federal holiday.
  • Certificate of Coverage: A document issued to a member of a group health insurance plan showing evidence of participation in the insurance.
  • Certificate of Creditable Coverage: A written statement from your prior insurance company or health plan documenting the length of time you were covered.
  • Creditable Coverage or Prior Qualifying Coverage: The number of months you had health insurance in place before your current or new policy became effective. Creditable coverage must be counted towards any pre-existing condition exclusion in either an individual or group policy.
  • Claim: A notification to your insurance company that payment is due under the policy provisions.
  • Co-payment: The portion of charges you pay to your provider for covered health care services in addition to any deductible.
  • Coverage: The scope of protection provided by an insurance contract which includes any of the listed benefits in an insurance policy.

 

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  • Denial: An insurance company decision to withhold a claim payment or preauthorization. A denial may be made because the medical service is not covered, not medically necessary, or experimental or investigational.
  • Deductible: A fixed amount which is deducted from eligible expenses before benefits from the insurance company are payable.

 

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  • ERISA: Stands for the Employee Retirement Income Security Act (1974). Administered by the U.S. Department of Labor, Employee Benefits Security Administration. ERISA regulates employer sponsored pension and insurance plans (self-insured plans) for employees.
  • Exclusions and/or Limitations: Conditions or circumstances spelled out in an insurance policy which limit or exclude coverage benefits. It is important to read all exclusion, limitation, and reduction clauses in your health insurance policy or certificate of coverage to determine which expenses are not covered.
  • Experimental and/or Investigational Medical Services: A drug, device, procedure, treatment plan, or other therapy which is currently not within the accepted standards of medical care.

 

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  • Grace Period: A specified period immediately following the premium due date during which a payment can be made to continue a policy in force without interruption. This applies only to Life and Health policies. Check your policy to be sure that a grace period is offered and how many days, if any, are allowed.
  • Guaranteed Issue: A health insurance policy that must be issued regardless of any pre-existing medical condition. The present and past physical condition of a health insurance applicant is not considered as a part of underwriting. No physical examination is required. The insurance company cannot decline coverage to an applicant of a guaranteed issue policy based on medical history

 

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  • Independent Medical Review: A process where expert medical professionals who have no relationship to your health insurance company or health plan review specific medical decisions made by the insurance company. California law provides for an Independent Medical Review Program, which is administered by the CDI and the DMHC depending upon what type of coverage you have (indemnity or HMO).

 

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  • Medically Necessary: A drug, device, procedure, treatment plan, or other therapy that is covered under your health insurance policy and that your doctor, hospital, or provider has determined essential for your medical well-being, specific illness, or underlying condition.

 

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  • Policy: The written contract between an individual or group policyholder and an insurance company. The policy outlines the duties, obligations, and responsibilities of both the policyholder and the insurance company. A policy may include any application, endorsement, certificate, or any other document that can describe, limit, or exclude coverage benefits under the policy.
  • Pre-existing Condition: Any illness or health condition for which you have received medical advice or treatment during the six months prior to obtaining health insurance. Group healthcare policies of 3 or more persons cover preexisting conditions after you have been insured for 6 months, and individual policies cover preexisting conditions after you have been insured for 1 year. Creditable coverage must be counted towards any preexisting condition exclusion in either an individual or group policy.

 

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  • Usual, Reasonable, and Customary: The amount that your insurance company determines is the normal payment range for a specific medical procedure performed within a given geographic area. If the charges you submit to your health insurance company are higher than what is considered normal for the covered health care services, then your health insurance company may not allow the full amount charged to you.

 

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  1. The glossary is for informational purposes only.
  2. The actual terms of an insurance policy prevail over the information provided in the glossary.
  3. In the case of a dispute, the insurance policy is controlling and a court will rely on the policy as it is written in English to resolve the dispute.
  4. The policy is the sole source of rights and obligations of the insurer and the insured.
  5. The information contained in the glossary does not create rights or obligations on the part of the insured, the insurer, the agent, the broker, or the state.
  6. The glossary is not intended to be a substitute for the actual policy written in English.
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