- Fully Insured - When a company pays one price per employee/family per month to have a benefit, they are fully insured.There is no further risk with high claims.
- Self-Insured - Self-insured companies usually have a carrier or TPA who does the administration, approves the claims, and then bills the company for the claims. The company pays a fee for administration, and pays for the entire cost of claims.
- In-Network - An "in-network" doctor has an agreement with an insurance carrier to provide services for a reduced price because they know they will be paid by the insurance carrier. The doctor's office will bill the carrier. In most plans, the participant will have to pay a co-payment for an office visit, an d/or there may be a deductible for services provided by a hospital.
- Out-of-Network - If an employee elects to see a doctor who does not have an agreement with their insurance carrier, they will generally need to pay a deductible before the insurance company will pay. They have the freedom to be in or out of network, but they will pay more if they select a doctor who is out of network.
- HIPAA - HIPAA is a legal requirement that regulates how organizations must handle Protected Health Information (PHI).
- Dependent Age Out (DAO) - A dependent who doesn't enroll in college by a certain age (usually 19) cannot continue on their parent(s)' benefits. Companies do allow college-age depend ents to be on plans while they are in school. Most companies do not allow dependents to be on plans after age 23 t o 25, dependent on the company.
- Dependent Disability - Some companies will allow a dependent to be covered even if not in school if the dependent is disabled.
- Third Party Administrator (TPA) - benefitexpress is a TPA - we help companies by handling annual enrollment, new hire processing, ongoing administration, premium reconciliation, COBRA, FSA, and anything else necessary for benefits.
- Medical Terms - Medical plans may cover hospital visits, doctor visits, x-rays, tests, etc. that are covered in the plan offered by the company. Carriers (Aetna, Cigna, and BCBS) offer a variety of plans that a company can choose from. The company can either choose a package that the carrier offers or change/select specific benefits to offer based on what the employer feels is appropriate.
- Preferred Provider Option (PPO) - A PPO Plan allows an employee to visit either in or out of network providers and still receive some benefits from the insurance company. To receive a better benefit, an employee will usually go "in network".
- Deductible - The amount of money an employee pays before their insurance plan starts paying.
- Co-payment - For in-network doctors, this is the portion the participant pays for receiving services.
- Health Maintenance Organization (HMO) - An HMO Plan requires an employee and their family to select a primary care physician (PCP). If they need to see a different doctor, the primary care physician must give a referral to see another doctor. Participants are usually allowed to change PCPs during a plan year; however, if they go out of network or visit a doctor without a referral, an HMO traditionally will not pay anything towards the bill.
- High Deductible Health Plan (HDHP) - This plan has a lower premium than PPO or HMO plans, but has a very high deductible. Participants in an HDHP are eligible to contribute to a Health Savings Account (HSA)
- Health Savings Account (HSA) - An HSA is a tax-advantaged medical savings account available to taxpayers in the United States who are enrolled in a High Deductible Health Plan (HDHP). The funds contributed to the account are not subject to federal income tax at the time of deposit. Funds may be used to pay for qualified medical expenses at any time without federal tax liability.
- Traditional Medical - This medical plan is not used often anymore. Participants may see any provider they wish; there are no discounts or networks to follow. You generally pay a deductible – after that is met, the plan will pay a percentage.
Dental plans may cover teeth cleaning, fillings, crowns, partials, etc. Depending on the plan chosen by the company, the plan may also cover some of the cost of braces, surgery, and dentures.
- DPO - A Dental PPO Plan allows an employee to visit either in or out of network providers and still receive some benefits from the insurance company. To receive a better benefit, an employee will usually go "in network".
- DMO or DHMO - A Dental HMO Plan requires an employee and their family to select a primary care dentist (PCD). If they need to see a different dentist, the primary care dentist will must give a referral to another dentist. Participants are usually allowed to change PCDs during a plan year however, if t hey go out of network or visit a dentist without a referral, an HMO traditionally will not pay anything towards the bill.
- Traditional Dental - This dental plan allows you to see any dentist you wish without discounts or networks to follow. You usually pay a deductible first, then the plan will pay a percentage and you pay the rest.
A vision plan usually covers eye exams, glasses, and contacts. Any eye infections would usually be covered by the medical plan.
Life insurance terms
Various types of life insurance may be offered by a company to cover employees and their families.
- Basic Life - This is life insurance that is usually provided and paid for by the company. It can be offered as a flat amount or as a multiple of salary. This plan pays no matter how the participant dies if they are still employed by the company.
- Supplemental / Voluntary Employee - This is additional life insurance that the employee can buy. It is paid for totally by the employee. It can be in multiples of salary or dollar increments. This is term life insurance, meaning that it does not gain any value and continues to cover the insured until pay ment stops or company stops sponsoring the plan. This plan pays no matter how participant dies.
- Supplemental Spouse / Dependent - The company may provide plans allowing the employee to purchase life insurance for their spouse and/or dependents. The offering can be based on a % of employee's salary or dollar increments. This is term life insurance, meaning that it does not gain any value and continues to cover the insured until payment stops or company stops sponsoring the plan.
- Basic AD&D - Sometimes, a company will provide a Basic Accidental Death and/ or Dismemberment Plan. The insured must die as the result of an accident for the benefit to be paid out.
- Voluntary AD&D for Spouse / Dependent - The company may provide plans allowing the employee to purchase life insurance for the spouse and/or dependents. The offering can be based on a % of employee's salary or dollar increments. This insurance continues to cover the insured until payment stops or company stops sponsoring the plan.
- Group Universal Life Insurance - This plan is usually a term life insurance with a whole life
insurance component attached to it. An employee can add additional money to the plan for investment purposes.
- Whole Life Insurance - A plan that is also an investment along with life insurance coverage. Part of the premium goes to an investment option that can make the life insurance worth more than the face value, i.e., investments earn $3,000 on a $50,000 policy. At time of death, the beneficiary would receive $53,000. This plan may also allow for a loan against the investment portion.
- Evidence of Insurability (EOI) - An insurance company will require that an employee fill out a questionnaire concerning health issues and/or types of activities/sports to determine the risk involved in insuring the participant. The carrier may require a physical to determine insurability.
- Portability (for life insurance) - The opportunity to take a term life insurance plan and continue the plan even though the participant is no longer employed by the company. Insurance will continue until participant dies or stops paying.
- Conversion (for life insurance) - The opportunity to take a life insurance plan and continue the plan even though the participant is no longer employed by the company. This plan is also an investment vehicle, as part of the premium goes towards the investment. An employee may be required to do a con version for life insurance if they have a specific illness or are dying. A conversion is more expensive than portability. Insurance will continue until participant dies or stops paying.
- Age Based - The cost of term life insurance is usually based on age. The carrier usually changes participants every 5 years, e.g., 25-29, 30-35.
- Age Reduction Calculations - A company will reduce the amount of life insurance available to an employee and/or their spouse based on age, e.g., when participants turn 65, if they are still working, they are only eligible for 65% of the life insurance they had previously. Some carriers may not allow life insurance for a spouse after a specific age, e.g., age 70.
Disability is a program that provides pay or a percentage of pay at a time when an employee is ill and cannot work.
- Short Term Disability (STD) - This benefit is usually company paid. It is salary continuance to help an employee during a long illness or the birth of a child. Usually, the employee has a doctor fill out whatever forms the company requires to verify an illness. This benefit will last from 3 to 6 months dep ending on what the company offers.
- Long Term Disability (LTD) - This benefit picks up after STD ends. Once on LTD, an employee i s usually required to apply for Social Security Disability, which works in conjunction with LTD. This benefit can continue until an employee dies or retires.
- Buy Ups - STD can be on a graduating scale of payment, e.g., 1st 6 weeks paid at a 100%, 2nd 20 weeks at 80%, last 10 weeks at 60%. LTD is usually offered by a company at 50%, 60% or even 66-2/3%. Some companies offer the opportunity for the employee to purchase additional insurance that will give them an additional money, such as 10%, etc.
Flexible Spending Account terms
These are accounts that allow an employee to put pre-tax money aside to pay for reimbursement of medical, dental or vision benefits not paid for by an insurance plan (some restrictions may apply), or for day care while the parents are working.
- Health Flexible Spending Account (FSA) - This plan allows employee to pay for unreimbursed medical, dental, or vision costs, e.g. - deductible, copayments, drug costs, etc, using pr e-tax dollars. There are some things not covered (such as cosmetic surgery). Any unused money reverts back to the company; it is not refunded to employee, nor does it roll over to the next year.
- Dependent Care Savings Account (DCSA) - This pays for child care for children up to age 14 with pre-tax dollars while both parents are working. Any unused money reverts back to the company; it is not refunded to employee, nor does it roll over to the next year.
- Transportation - This plan pays for public transportation with pre-tax dollars. This plan continues from one year to the next and elections can be changed at any time.
- Parking - This plan pays for the parking an employee may use while they are working with pre-tax dollars. This plan continues from one year to the next and elections can be changed at any time.
Other types of benefits that may be offered
A company may offer any type of benefit they choose based on their population and what they feel their company would like to offer. Some of the benefits are paid by the participants directly to the company, but the employee may get a cheaper rate because their company has made a deal with a 3rd party. This is a sample of the most popular
- Legal Plans - ARAG and Hyatt are examples of legal companies that offer benefits, such as will writing, help with traffic tickets, child support cases, and possible divorce.
- EAP - An employee assistance program allows an employee to receive counseling for themself or a family member who needs therapy or is addicted to drugs or alcohol.
- Cancer Insurance - AFLAC is an example of a company that offers additional benefits to be paid if an employee is diagnosed with cancer. The additional benefits could be wages, hospital benefits or help with bill paying. It is dependent upon the contract written between the company and the carrier.
- Long Term Care - Long Term Care is a type of insurance that gives additional coverage when an employee or family member needs 24 hour care, assisted living, or help during an illness. The benefits received are based on what the employee has signed up for with the carrier.