Insurance documents are easier to use when the vocabulary is familiar. These definitions are general; your own plan documents may use more specific language.
Costs
Premium: the amount paid to keep coverage active. Deductible: the amount you may need to pay for covered services before certain plan benefits begin sharing costs. Copay: a fixed amount for a covered service. Coinsurance: a percentage of an allowed cost. Out-of-pocket maximum: the plan-defined limit on certain member costs for covered services during a plan period.
Networks and access
Network: providers and facilities that have contracted under the plan. In-network: participating care under the plan’s network terms. Out-of-network: care from a provider outside that network. Primary care provider: the clinician who may coordinate routine care. Referral: a direction from one clinician to another that some plans require for specialist care.
Coverage rules
Prior authorization: approval required before certain services or drugs. Medical necessity: plan criteria used to determine whether care meets coverage requirements. Formulary: the plan’s covered drug list. Tier: a category that helps determine prescription cost-sharing. Step therapy: a rule that may require trying one treatment before another is covered. Quantity limit: a coverage limit on the amount of a drug within a period.
Claims and documents
Claim: a request for payment submitted to a health plan. Allowed amount: the plan-defined amount used to calculate payment and member responsibility. Explanation of Benefits (EOB): a statement showing how a claim was processed; it is not itself a bill. Appeal: a request to review a coverage decision. Summary of Benefits and Coverage (SBC): a standardized summary designed to help compare plan features.
Enrollment
Open enrollment: a designated period for enrolling in or changing coverage. Special enrollment period: an enrollment opportunity triggered by qualifying circumstances. Dependent: a family member covered under another person’s plan. Effective date: the date coverage begins under the plan.