Demystifying Health Insurance: One Word at a Time

Health insurance. It’s a tricky dialect. And if you’re not fluent, enrollment can feel like a giant mystery. But you’re in luck: We’re here to help you decipher it.

Want to demystify open enrollment season? Give your employees the chance to learn key terms year-round. We’ve built this glossary to be your quick-access reference. With our help, your workforce can have a better understanding in no time.

Annual out-of-pocket maximum
An annual out-of-pocket maximum is the most you’ll pay for covered health expenses in a plan year. Once you hit your annual out-of-pocket maximum, your health plan pays 100 percent of covered health expenses for the rest of the plan year.

Authorization
Authorization means approval. Many health plans require you to get authorization before certain medical services, like a hospital stay or outpatient procedure. Authorization can also be called prior authorization or pre-certification.

To make sure that your care is authorized, call us at the number on the back of your ID card—or chat with a representative on myCigna.com.

Beneficiary
A beneficiary is a person who is eligible to receive health coverage under a plan. It could be the person who signed up for the plan, or their covered dependents, like their spouse or kids. For life insurance plans, a beneficiary is the person who will receive payment should the person who bought the plan die.

Benefit
This is an important term to know. A benefit is an item or service that’s covered by your health plan. For example, preventive care is a benefit under most health plans.

Carrier
A carrier is a licensed insurance company (like Cigna Health and Life Insurance Company.) Carrier can also refer to a health maintenance organization (HMO) or a third-party administrator (TPA).

Claim
A claim is a payment request from you or your health care provider to your health plan for covered services. In other words, it’s what you or your doctor sends your health plan carrier to get paid.

Coinsurance
Coinsurance is the portion of the cost you pay for covered health services after your health plan starts to pay. This usually happens once the deductible has been met. Coinsurance can also refer to the percentage of covered expenses paid by your health plan.

Consumer driven health plan (CDHP)
A consumer driven health plan, or CDHP, is a type of health plan that combines a high annual deductible with lower monthly premiums/plan contributions and a tax-advantaged personal account. This account is usually either a health reimbursement account (HRA) or a health savings account (HSA).

Copay
A copay is the dollar amount you have to pay for a covered health care service under the terms of your health plan. It’s usually due at the time you receive the service, at a doctor’s appointment or for a medical procedure.

Coverage
Coverage is the benefits a health plan provides you, and any covered dependents, for certain health expenses.

Customer ID
Your customer ID is the unique identifier associated with a health plan customer. Your customer ID is usually printed on your health plan ID card. It’s often a series of numbers and letters.

Deductible
A deductible is the amount you pay each year before your plan begins to pay. Once the deductible has been met, your health plan starts to pay a share of the covered costs.

Dependent
A dependent is a person who depends on you for health coverage. It’s usually a spouse, partner or child. If you’re enrolled in a health plan, a dependent may be eligible for coverage under your plan because of their relationship with you.

Effective date
Your activation date, also called your effective date or coverage start date, is the date your health plan starts. For example, you might enroll in your employer’s health plan on July 15 but have an activation date of September 1.

Employee assistance program (EAP)
An employee assistance program, or EAP, is a program purchased by an employer to:

• Provide 24/7 confidential resources and assistance to employees and household members.
• Address life challenges and needs which can affect health, well-being, relationships, and productivity.
• Assist organizations with workplace concerns and critical events, e.g. natural disasters, loss of a co-worker, and more. Most services provided through the EAP are offered at no cost.

Exclusions and limitations
Exclusions and limitations are exceptions to your insurance policy or plan coverage. An exclusion is a condition or situation that is not covered by your plan. A limitation may limit benefits to a certain amount or for a certain amount of time.

Explanation of benefits
An explanation of benefits, or EOB, is a statement sent by the health plan carrier that explains what medical treatments and or services were paid for. It’s an explanation of your benefits for a particular service.

Identification (ID) card
This is the card given to all health plan customers by their health insurance company or health plan carrier. Your ID card helps doctors and other health care providers confirm that you have coverage and that you’re eligible under your plan to receive coverage for their services.

In-network
In-network refers to the doctors, hospitals, labs, and other providers that a health plan contracts with to provide discounted rates to its health plan customers. You typically pay less when you see in-network providers.

Inpatient care
Inpatient care is the type of care you receive when you’re admitted to a hospital, extended-care facility, nursing home or other similar health care facility for 1 night or longer.

Network
A network is a group of doctors, hospitals, labs, and other health care professionals that have contracted with a health plan to deliver health care services to its customers. Usually, the providers in a network offer a discounted rate to health plan customers.

Non-network provider
A non-network, or out-of-network, provider is a doctor, hospital, lab, or other type of health care provider who isn’t part of your health plan’s contracted network. Some plans provide coverage when using a non-network provider. However, you’ll typically pay more for these services than if you were to stay in-network.

Open enrollment
Open enrollment is a time during the year when you can buy or change your health care coverage, either through your employer or on your own. The dates for open enrollment vary, depending on how you get your coverage. For many people, open enrollment takes place sometime during the fall.

Out-of-pocket maximum
An out-of-pocket maximum is the most you’ll pay out of your pocket for covered health care costs in a year, according to the terms of your health plan. Depending on the plan, this amount may include money spent on deductibles, copays, and coinsurance. Once you meet your out-of-pocket maximum, your health plan pays all covered health care costs for the rest of the year.

Plan year
A plan year is the 12 months during which your health plan is active and providing you with benefits. The 12 months don’t necessarily follow the calendar year. For example, your plan year can be from July 1 to June 30.

Premium
A premium is the required monthly payment you make to your health insurer for your health plan. If you have coverage through your employer, your premium cost is typically deducted from your paycheck each pay period.

Primary care provider (PCP)
A primary care provider, or PCP, is a health care provider that provides a broad range of routine medical services. A primary care provider refers patients to specialists, hospitals, and other health care providers as necessary. A primary care provider is usually a family or general practitioner, internist, or pediatrician. Some types of health care plans require you to choose a primary care provider and get a referral before seeing a specialist.

Provider
A provider is another term for a doctor, hospital, or another health care professional or facility that provides health care services. A dermatologist, pharmacist, nurse practitioner, physical therapist, or midwife are all examples of providers.

Referral
A referral is a recommendation from your doctor or health care provider to go see another health care provider for additional care, treatment, or a consultation. Many health plans require you to get a referral from your regular doctor or primary care provider before you can see a specialist.

Summary of benefits
A summary of benefits is the document from your health insurance company or health plan that gives you a brief list of your plan’s coverage and the cost sharing you’ll be responsible for when you go for services.

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Product availability may vary by location and plan type and is subject to change. All group health insurance policies and health benefit plans contain exclusions and limitations. For costs and details of coverage, contact a Cigna representative.

All Cigna products and services are provided exclusively by or through operating subsidiaries of Cigna Corporation, including Cigna Health and Life Insurance Company (CHLIC), Cigna Behavioral Health, Inc., Cigna Health Management, Inc., and HMO or service company subsidiaries of Cigna Health Corporation. Policy forms: OK - HP-APP-1 et al., OR - HP-POL38 02-13, TN - HP-POL43/HC-CER1V1 et al. (CHLIC). The Cigna name, logo, and other Cigna marks are owned by Cigna Intellectual Property, Inc.

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