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Glossary

ADMINISTRATIVE SERVICES ONLY
A contract in which a third party administrator or insurance company processes claims for a self funded health plan

AGGREGATE ACCOMODATION (also called AGGREGATE ADVANCEMENT)
Optional stoploss protection against monthly claim fluctuations. The stop loss carrier advances the health plan amounts in excess of the accumulated monthly aggregate attachment point. 

AGGREGATE ATTACHMENT POINT
Under an aggregate stoploss policy, the amount of total claims that must be paid before the stoploss carrier begins to reimburse the plan.
  
AGGREGATE REPORT
A monthly claims report that exhibits total paid claims and claims that are subject to stoploss reimbursement.   
  
AGGREGATING SPECIFIC STOPLOSS
An optional type of specific stoploss policy whereby the specific attachment point applies only after a larger “aggregating specific” has been reached. 
  
AGGREGATE STOP LOSS
Stoploss coverage that protects the plan against total annual claims greater than predicted.  It is usually written to attach at 125% of expected annual claims. 

CERTIFICATE OF CREDITABLE COVERAGE
Carrier provides policy holders with written documents verifying an individual’s level of coverage under a particular plan.  Typically provided when an individual departs from a plan

COBRA
An active federal law since 1986.  COBRA stands for Consolidated Omnibus Budget Reconciliation Act and it makes it possible for an individual and their dependents to remain covered under an employer’s goupr health plan after leaving a position.

COBRA Continuation Coverage is available for those who worked for companies with 20 or more employees are were fired, quit, retired or relegated to working reduced hours.  Dependents of employees, encompassing survivors, divorcees and separated spouses, as well as, dependent children, are also entitled to coverage under COBRA’s Continuation Coverage which generally lasts 18 months, 36 months for dependents who qualify.

COINSURANCE
After the annual deductible has been met, the remaining amount the policy holder must pay for medical |health charges.  The amount is derived as a percentage of that which the insurance company will not pay.  For example 50/50 is an expression meaning the insurer will pay 50%, leaving the policy holder with a remaining balance of 50%.

CREDITABLE CLAIMS
The proportion of the claims experience of a group that is used in the calculation of the renewal premium, based primarily on the size of the group.

CAPITATED CHARGE
A service charge based on the number of participants in a group plan.

DEFICIT CARRY-FORWARD
A provision of minimum premium (and some other) plans that prohibits any savings from favorable claims experience in a partial self funding arrangement if the plan has experienced a deficit in previous years. 

DISEASE MANAGEMENT
A cost control service within a group plan whereby individuals with specific chronic conditions are identified and provided additional services to help them manage their conditions.

DISRUPTION REPORT
A report prepared by a proposed PPO network that compares the health providers in the proposed PPO to the health providers being used by the participants in the current PPO network.

ERISA (Employee Retirement Income Security Act)
A Federal law that (among other things) allows self funded health plans to be considered exempt from state regulations and provides for non-discrimination in self funded plans. 

EXPECTED CLAIMS
A prediction of paid claims for a plan year based on plan demographics, current claims experience, and insurance company trend.  The expected claims calculation is used to determine the aggregate attachment point. 

FIXED COSTS
Those costs in a self funded plan that are in addition to the claims and generally include all administration charges plus stoploss premiums. 

FULLY POOLED
A type of fully insured group insurance contract whereby the claims experience of an individual group is not used in the calculation of the rates.  The claims experience is “pooled” with other companies insured by the insurance carrier. 
  
GEO-ACCESS REPORT
A report that provides information on the types and numbers of health care providers within a PPO network based on their proximity to the participants in a group health plan.

INCURRED BUT NOT REPORTED (IBNR)
A term applied to claims wherein the service has been provided by the health professional (incurred) but has not yet been processed and paid.  This amount is also referred to as the RESERVE.

LAG REPORT
A claims report that shows the amount of time between the time claims are incurred and paid. 
  
LARGE CASE MANAGEMENT
A service provided to group medical plans whereby plan participants that have large medical events are assisted by a trained professional (usually an RN) in obtaining effective and cost efficient care. 
  
LASER
A provision in some stoploss contracts which sets a specific stop loss attachment point at a higher level than the rest of the contract for specific individuals. 
  
MAXIMUM LIABILITY
The amount calculated by adding the annual fixed costs to the annual aggregate attachment point in a self funded contract. 

MINIMUM PREMIUM
A type of partial self funding arrangement wherein the insurance company assumes the risk but charges the plan monthly fixed costs plus paid claims up to predetermined limits.  It is usually characterized by a deficit carry-forward provision.
  
PER EVENT CHARGE
A service charge based on a specified occurrence in a health plan. 

PHARMACY BENEFIT MANAGER (PBM)
A entity that supplies a network of member pharmacies to a health plan and manages the prescription claims to control cost.
   
POOLING POINT
In an insured contract, the limit to the amount of paid claims on an individual that will be charged against the experience of the plan.

PREDICTIVE MODELING
The science of ranking individuals from those with the greatest probability of disease onset to those with the least probability of disease onset.
  
PERCENT OF CLAIMS CHARGE
A method of charging for claims administration whereby the fee is set as a percentage of paid claims instead of an amount per participant. 

RUN IN
Claims that are incurred prior to the start of a plan year but are paid during the plan year.
  
RUN OUT
Claims that are incurred during the plan year but are paid after the plan year ends.
  
SHOCK CLAIMS
Large claims, usually in excess of $25,000.  Details of these claims are crucial to the underwriting process of a self funded plan. 
  
SPECIFIC DEDUCTIBLE
See SPECIFIC STOP LOSS
  
SPECIFIC STOP LOSS (also called INDIVIDUAL STOP LOSS)
Stop loss insurance that protects a health plan against catastrophic claims on an individual in excess of a predetermined amount, usually referred to as a SPECIFIC DEDUCTIBLE.
  
STOPLOSS
A type of insurance that covers a health plan for claims in excess of a predetermined amount.  Stoploss insurance is written on both a specific and aggregate basis. 
  
TERMINAL LIABILITY
Stoploss insurance that covers the RUN OUT. 

THIRD PARTY ADMINISTRATOR
An organization that contracts to process the claims and provide other administrative services for a self funded health plan.
  
UNFUNDED LIABILITY
The amount between the maximum liability and the sum of the fixed costs and paid claims that some employers choose to not fund. 
  
UTILIZATION REVIEW
A service provided to a health plan whereby the services provided by the health care provider are evaluated for medical necessity and appropriateness of charges.