A drug formulary is a list of prescription drugs that are covered under the plan. An independent group of practicing doctors, pharmacists and other healthcare professionals meet often to look at new and existing drugs to cover under the formulary. They choose drugs for these lists based on a number of factors including how well they work, value to patients and safety. All drugs on the formaulary are approved by the Food and Drug Administration (FDA).

Maximum allowed amount on which payment is based for covered health care services. This may be called “eligible expense,” “payment allowance,” “maximum allowed” or “negotiated rate.” If your provider charges more than the allowed amount, you may have to pay the difference. (See Balance Billing.)

A request for your health insurer or plan to review a decision or a grievance again.

When a provider bills you the difference between the provider’s charge and the allowed amount. For example, if the provider’s charge is $100 and the allowed amount is $70, the provider may bill you for the remaining $30. Applicable to non-preferred providers only; a preferred provider may not balance bill you for covered services.

Your share of the costs of a covered health care service, calculated as a percent (for example, 30%) of the allowed amount for the service. You pay co-insurance plus any deductibles you owe. For example, if the health insurance or plan’s allowed amount for an office visit is $100 and you’ve met your deductible, your co-insurance payment of 30% would be $30. The health insurance or plan pays the rest of the allowed amount.

Conditions due to pregnancy, labor and delivery that require medical care to prevent serious harm to the health of the mother or the fetus. Morning sickness and a non-emergency caesarian section aren’t considered complications of pregnancy.

Consumer Directed Health Plans (CDHPs) come in various forms, but most commonly a CDHP means offering a high-deductible health plan paired with a spending account for out-of-pocket expenses such as a Health Savings Account (HSA). CDHPs can be offered as a Health Maintenance Organization (HMO), or as a Preferred Provider Organization (PPO). CDHPs encourage employees to make informed decisions and spend wisely, which typically means CDHPs enjoy a lower premium than traditional plans.

A fixed amount (for example, $20) you pay for a covered health care service, usually when you receive the service. The amount can vary by the type of covered health care service and can be dependent upon fulfilling a deductible.

The amount you owe for health care services your health insurance or plan covers before your health insurance or plan begins to pay. For example, if your deductible is $1,000, your plan won’t pay anything until you’ve met your $1,000 deductible for covered health care services subject to the deductible. The deductible may not apply to all services.

Equipment and supplies ordered by a health care provider for everyday or extended use. Coverage for DME may include: oxygen equipment, wheelchairs, crutches or blood testing strips for diabetes.

An illness, injury, symptom or condition so serious that a reasonable person would seek care right away to avoid severe harm.

Ambulance services for an emergency medical condition.

Emergency services you get in an emergency room (ER).

Evaluation of an emergency medical condition and treatment to keep the condition from getting worse.

The Evidence of Coverage (EOC) is a document that describes in detail the health care benefits covered by the health plan. It provides documentation of what the plan covers or excludes and how it works, including how much you pay.

Health care services that your health insurance or plan doesn’t pay for or cover.

An explanation of benefits (EOB) provides details about a medical insurance claim that has been processed by your health insurance/plan, and explains what portion was paid to the health care provider where you received the medical services and what portion of the payment, if any, is your responsibility. The EOB is not a bill. Any portion of the medical expense not covered by the insurance company, such as a deductible or co-pay, will be billed by the provider and should be paid directly to the provider.

A complaint that you communicate to your health insurance or plan.

Health care services that help a person keep, learn or improve skills and functioning for daily living. Examples include therapy for a child who isn’t walking or talking at the expected age. These services may include: physical and occupational therapy, speech-language pathology and other services for people with disabilities in a variety of inpatient and/or outpatient settings.

A contract that requires your health insurer to pay some or all of your health care costs in exchange for a premium.

A type of health insurance plan that usually limits coverage to care from preferred providers contracted with the Health Maintenance Organization (HMO). These plans require you to choose a primary care physician (PCP) to coordinate your care and issue referrals to specialists as needed. Please note, typically you cannot see a specialist without a referral from your PCP when enrolled in an HMO.

A type of savings account that lets you put aside money on a pre-tax basis to pay for qualified medical expenses (as defined by the IRS). By using untaxed dollars in a Health Savings Account (HSA) to pay for the deductibles, co-payments, co-insurance and some other expenses, you can lower your overall health care costs. An HSA can be used only if you have a High Deductible Health Plan (HDHP). Additionally, HSA funds roll over year to year if you don’t spend them, and an HSA may earn interest, which is not taxable.

A plan with a higher deductible than a traditional insurance plan. The monthly premium is usually lower, but you pay more for care costs before the insurance company starts to pay its share (your deductible). The IRS defines a high deductible health plan (HDHP) as any plan with a deductible of at least $1,350 for an individual or $2,700 for a family, and the out-of-pocket limit can’t be more than $6,650 for an individual, or $13,300 for a family. HDHPs can be combined with a health savings account (HSA) allowing you to pay for certain medical expenses with money free from federal taxes.

Health care services a person receives at home.

Services to provide comfort and support for persons in the last stages of a terminal illness and their families.

Care in a hospital that usually doesn’t require an overnight stay.

Care in a hospital that requires admission as an inpatient and usually requires an overnight stay. An overnight stay for observation could be outpatient care.

The percent (for example, 30%) you pay of the allowed amount for covered health care services to providers who contract with your health insurance or plan (also known as preferred providers). In-network co-insurance usually costs you less than out-of-network co-insurance.

A fixed amount (for example, $20) you pay for covered health care services to providers who contract with your health insurance or plan. In-network co-payments usually are less than out-of-network co-payments.

Medical treatment that is provided in a hospital or other facility and requires at least one overnight stay.

Health care services or supplies needed to prevent, diagnose or treat an illness, injury, condition, disease or its symptoms and that meet accepted standards of medicine.

The facilities, providers and suppliers of your health insurer or plan has contract with to provide health care services.

A provider who doesn’t have a contract with your health insurer or plan to provide services to you. You’ll pay more to see a non-preferred (or out-of-network) provider. Check your policy to see if you can go to all providers who have contracted with your health insurance or plan, or if your health insurance or plan has a “tiered” network, which indicates a higher cost share to visit certain providers.

The percent (for example, 50%) you pay for the allowed amount for covered health care services to providers who do not contract with your health insurance or plan. Out-of-network co-insurance usually costs you more than in-network co-insurance.

The most you pay during a policy period (generally a calendar year, January 1 to December 31) before your health insurance or plan begins to pay 100% of the allowed amount. This limit never includes your premium, balance-billed charges or health care your health insurance or plan doesn’t cover. Some health insurance or plans don’t count all of your co-payments, deductibles, co-insurance payments, out-of-network payments or other expenses towards this limit.

Medical treatment for a patient who is not hospitalized overnight but who visits a hospital, clinic or associated facility for diagnosis or treatment. Generally, all covered services that do not require an overnight stay are considered outpatient care.

Health care services a licensed medical physician (M.D. – Medical Doctor or D.O. – Doctor of Osteopathic Medicine) provides or coordinates.

A benefit your employer, union or other group sponsor provides to you to pay for your health care services.

A decision by your health insurer or plan that a health care service, treatment plan, prescription drug or durable medical equipment is medically necessary. Sometimes called prior authorization, prior approval, predetermination or precertification. Your health insurance or plan may require preauthorization for certain services before you receive them, except in an emergency. Preauthorization isn’t a promise your health insurance or plan will cover the cost.

A type of health insurance plan that contracts with medical providers that include doctors and hospitals who are all contracted with the health plan to provide services at a discounted rate. You’ll save money by using preferred providers, although you can still use those that are out-of-network – at extra cost.

A provider who has a contract with your health insurer or plan to provide services to you at a discount. Your health insurance or plan may have preferred providers who are “participating” providers, also considered in-network. Participating providers also contract with your health insurer or plan, but the discount may not be as great, and you may have to pay more.

The amount that must be paid for your health insurance or your plan. You and/or your employer typically pay a portion of the total premium remit to your health insurance or plan.

Health insurance or plan that helps pay for prescription drugs and medications.

A physician (M.D. – Medical Doctor or D.O. – Doctor of Osteopathic Medicine), nurse practitioner, clinical nurse specialist or physician assistant, as allowed under state law, who provides, coordinates or helps a patient access a range of health care services.

A physician (M.D. – Medical Doctor or D.O. – Doctor of Osteopathic Medicine), health care professional or health care facility licensed, certified or accredited as required by state law.

Surgery and follow-up treatment needed to correct or improve a part of the body because of birth defects, accidents, injuries or medical conditions.

The recommendation of a medical or paramedical professional. If you get a referral to ophthalmology, for example, you are being sent to the eye doctor. In HMOs and other managed care schemes, a referral is usually necessary to see any practitioner or specialist other than your primary care physician (PCP), if you want the service to be covered. The referral is obtained from your PCP, who may require a telephone or office consultation first. The term referral can refer both to the act of sending you to another medical professional, and to the actual paper authorizing your visit.

Health care services that help a person keep, get back or improve skills and functioning for daily living that have been lost or impaired because a person was sick, hurt or disabled. These services may include physical and occupational therapy, speech-language pathology and psychiatric rehabilitation services in a variety of inpatient and/or outpatient settings.

Services from licensed nurses in your own home or in a nursing home. Skilled care services are from technicians and therapists in your own home or in a nursing home.

A physician specialist focuses on a specific area of medicine or a group of patients to diagnose, manage, prevent or treat certain types of symptoms and conditions. A non-physician specialist is a provider who has more training in a specific area of health care.

Care for an illness, injury or condition serious enough that a reasonable person would seek care right away, but not so severe as to require emergency room care.

The amount paid for a medical service in a geographic area based on what providers in the area usually charge for the same or similar medical service. The UCR amount is sometimes used to determine the allowed amount.