DEFINITIONS-The following definitions are
what we use in our business. They may not agree with others,
nor are they the official definitions used by
every company, every agent or the government. They are what
we can use to communicate. For the official
definitions, go to http://www.ldi.state.la.us.
ANNUITY- A contract providing a guaranteed and a
projected percentage return on funds deposited. Fixed and
variable annuities are both savings plans with certain tax
advantages and conservation of money. For more information,
please e-mail a request and we will provide more
ASSIGNMENT- Often used with doctors who do or do
not accept assignment of Medicare benefits. A
doctor who accepts assignment agrees to accept as full
payment what Medicare specifies.
ASSISTED LIVING- Includes the cost of all or many
levels of care such as home health care, adult congregate
living facilities (ACLF), nursing home and more. See LONG
TERM CARE INSURANCE definition.
CAFETERIA PLAN (SECTION 125)- A plan offered by
employers to their employees where specific insurance plans
are funded through pretax dollars. Advantages are best for
larger groups .Please e-mail your request for more
COBRA (Consolidated Omnibus Budget Reconciliation
Act)- Federal program requiring group health plans to offer
employees continuation of coverage when employment is
terminated. Request more information by e-mail for details,
restrictions and size of group requirements.
CO-INSURANCE- On plans that pay a percentage of
expenses (usually after a deductible has been met),
co-insurance refers to the percentage paid by the insurance
and the percentage paid by the insured.
CO-PAY- Most HMO plans and some other plans
provide full coverage for certain expenses with the insured
paying only a small co-payment to the provider at the time
DEDUCTIBLE- Usually with PPO and Indemnity plans,
the deductible is the amount paid by the insured before any
insurance benefits are paid. Some plans have per
cause and some plans have per year
deductibles. Also, some plans offer selected benefits, such
as doctor office visits, with a co-pay without any
deductible with all other benefits available after the
deductible has been satisfied.
DISABILITY INSURANCE- Provides payment to insured
when disabled and unable to work. Usually, payments begin
after a certain period (elimination period), and will
continue to pay for a specific period of time ( to age 65,
10 years, etc) as long as the insured is unable to work.
Maximum payments are usually limited to a percentage of the
insurds prior year earnings and are usually made on a
FORMULARY- A listing of included prescription drugs
on a prescription drug insurance plan.Some prescription
plans offer different co-pays for generic and brand name
drugs, and a third co-pay for drugs that are not on their
list of approved drugs. Insurance companies and HMOs
often contracts with a third party to provide this benefit
to their members and policyholders.
GROUP INSURANCE-These plans are available regardless
of existing medical conditions (they may have one to two
year waiting periods for preexisting conditions depending on
whether or not prior qualifying insurance exists). Proof of
self-employment or business existence usually requires
income tax records reflecting income from self employment or
business. New business have other requirements.
HMO- Health Maintenance Organization-
Available to group and individuals, plans offer payment of
benefits with co-pays required. These plans usually excel in
providing coverage for preventative care and pregnancy.
Members must use doctors and other providers who are
contracted with the HMO, otherwise, there is no
INDIVIDUAL INSURANCE- Plans obtained by individuals
and families who will pay premiums without any employer
involvement. These plans require full medical
underwriting, applicants answering questions
about prior medical history ; sometimes medical exams are
required. The insurance company or HMO may decline to issue
if the preexisting medical conditions are not acceptable
INDEMNITY PLAN- Insurance that allows policyholder
to use any doctor or other provider. Unlike PPO or HMO
plans, there is no list or network to be concerned about.
Only restrictions are usually provider licensing and
treatments not excluded from coverage.
LONG TERM CARE INSURANCE (LTC)- Provides benefits for
nursing home care. Some plans cover all levels of
assisted living, including home health care,
adult congregate living facilities (ACLF), day care and
more. Claims are usually triggered by a persons inability to
perform a certain number of ADLs (Activities of
Daily Living). Plans can have an elimination period and
usually pay for a certain length of time or up to a maximum
amount specified in the policy.
MAJOR MEDICAL- Refers to a health insurance plan with
a high maximum benefit and with comprehensive
rather than scheduled benefits. Most health insurance is now
referred to as PPO, HMO, etc. rather than Major
Medical, with the assumption of high benefit
MEDICAID- Federal-State insurance for persons with
limited income or otherwise eligible do to health conditions
or other qualifying requirements.
MEDICARE- Federal plan of health insurance for
persons age 65 and over or others under age 65 with medical
disabilities. Medicare covers a per- percentage of medical
costs, the balance paid by the insured or by Medicare
supplement insurance (medi-gap), HMO plans or other plans.
Please request from us a Guide to Insurance for Persons on
Medicare for more details.
MODIFIED BENEFIT- Usually refers to life insurance
where the first and second year death benefit is limited to
something less than the full face amount.
NURSING HOME INSURANCE - Please see Long Term
OUTPATIENT- Refers to medical treatment not
requiring over night hospitalization. Treatment in a
doctors office, at a hospital but without over night
admission, and clinic services vices are examples.
POS- Point of Service- PLANS- Insurance
usually like HMO, with co-pays, but allows the insured to
obtain medical service out of network, usually
by paying a deductible and co-insurance.
PPO- Preferred Provider Organization-
Insurance plan, usually with a deductible and co-insurance,
with full benefits when utilizing network providers.
Benefits are available out of network, but at a lower level.
Some PPO plans have Primary Care Provider referral
requirements and some PPO plans offer co-pay benefits with
no deductible for certain services .
Primary Care Physician (PCP)- Most HMOs and
some PPOs require insured to select a PCP who is
usually a general practitioner, internist or other non
specialist. Some plans require the insured obtain a
referral from the PCP before seeing a
Prior Authorization- This normally applies to the
requirement from PPO and indemnity plans that before any
hospitalization, the insurance company be contacted and
advised of the course of treatment anticipated.
If this requirement exists, claim payment may be decreased
if prior authorization is not obtained. The doctor and/or
hospital normally is responsible for this procedure.
Provider Network- A listing of doctors, hospitals,
and other providers an HMO or PPO is contracted with. Many
provider networks are leased by more than one
company , some are established and maintained by the HMO or
insurance company internally.
Referral- Most HMO and PPO plans require the insured
to obtain a referral from a primary care
provider before seeing any specialist. Depending on the PCP,
this can be done with a simple telephone call or may require
a visit to the PCP. The purpose of referrals is to avoid
unnecessary specialist visits and the resulting cost.
Short Term (Interim) Insurance- Insurance plans that
can be held in force for specific, predetermined periods of
time- 6 months, 1 year. Designed for temporary needs
(between jobs, graduating students,etc), these plans are
generally available with very liberal underwriting with
preexisting conditions excluded from coverage.
Supplementary Plans- Plans that supplement coverage
from another source. Medicare supplements are most common.
Other supplementary or specialtyplans include
those that cover only cancer, accidents, intensive care ,
Underwriting- This is the process an insurance
company or HMO utilizes in determining if a risk is
acceptable. Applications requiring answers to many health
questions, medical examinations and home office telephone
interviews are some of the methods used.