| Baseline Benefit Package | For each type of health plan, the typical benefit package is the benefit package that has the highest percentage of enrollees (the statistical "mode.") Also referred to as the typical benefit package. |
| Benefit Package | Services covered by a health insurance plan and the financial terms of such coverage. These include including cost sharing, limitations on the amounts of services, and annual or lifetime spending limits. |
| Coinsurance | A type of cost sharing where the insured party and insurer share payment of the approved charge for covered services in a specified ratio after payment of the deductible. Most fee-for-service plans require a 20 percent coinsurance for covered inpatient and outpatient medical/surgical services. |
| Copayment | A type of cost sharing where the insured party is responsible for paying a fixed dollar amount per covered service. For example, an HMO could require a $10 copayment for every visit to a network physician. |
| Cost sharing | A health insurance policy provision that requires the insured party to pay a portion of the costs of covered services. Deductibles, coinsurance, and copayment are types of cost sharing. |
| Coverage Decision | A decision by a health plan whether to pay for or provide a medical service for particular clinical conditions. |
| Deductible | A type of cost sharing where the insured party pays a specified amount of approved charges for covered medical services before the insurer will assume liability for all or part of the remaining covered services. |
| ERISA | The Employee Retirement Income Security Act of 1974 (ERISA). Health plans that are self-insured are exempt from state regulation under ERISA. |
| FFS | Fee-for-service. A type of health care plan where health care providers are paid for individual medical services rendered. |
| Gatekeeper | A primary care physician in a managed care plan (such as an HMO or POS plan) who oversees the care of enrollees in the plan. |
| HayGroup | The HayGroup is a firm that conducts actuarial analysis. |
| HMO | Health maintenance organization. A type of managed care plan that acts as both insurer and provider of a comprehensive set of health care services to an enrolled population. Services are furnished through a network of providers (such as physicians and hospitals). |
| Health Plan | An organization that acts as insurer for an enrolled population. Types of health plans include fee-for-service (FFS), preferred provider organization (PPO), point-of-service (POS), and health maintenance organization (HMO). |
| Managed Care | A system of health care delivery where the health plan attempts to control or coordinate the use of health services by enrolled members to contain health care expenditures and/or improve quality. Types of managed care plans include HMOs, point-of-service (POS) plans, and preferred provider organizations (PPOs). |
| POS | Point-of-service. Point-of-service plans are managed care plans that cover both in-network and out-of-network services. To encourage use of network providers, patient out-of-pocket costs are higher when non-network providers are used. POS plans generally manage in-network services more tightly than PPOs manage services because POS plans use gatekeepers. |
| PPO | Preferred provider organization. A PPO is a managed care plan that contracts with providers to furnish services to plan enrollees. PPO providers are paid according to a discounted fee schedule. Enrollees pay lower out-of-pocket costs when they use network ("preferred") providers. However, services they receive from non-network providers are also covered. Enrollees pay higher out-of-pocket costs when they use non-network providers for covered services. |
| Premium | The amount an insurer charges for a health insurance policy. The premium amount is computed to pay for the expected costs of all health insurance expenses. Health insurance expenses include medical/surgical services, MH/SA services, and administrative costs and profits. |
| Primary Care Physician | Primary care physicians generally include physicians with the following specialties: general practice, family practice, internal medicine, obstetrics/gynecology, and pediatrics. |
| SAMHSA | Substance Abuse and Mental Health Services Administration. SAMHSA is a government agency. Its responsibilities include conducting evaluations and other activities to improve prevention and treatment of mental health and substance abuse disorders. |
| SMI | Serious mental illness. The National Advisory Mental Health Council defines serious mental illness to include disorders with psychotic symptoms such as schizophrenia, schizoaffective disorder, manic depressive disorder, and autism, as well as severe forms of other disorders such as major depression, panic disorder, and obsessive compulsive disorder. |
| Self-insured Health Plan | Employer-provided health insurance in which the employer, rather than an insurer, is at risk for its employees' medical expenses. |
| Service Limits | Limits on the amount of services covered by a health plan. For example, a health plan can limit the number of covered outpatient visits or inpatient hospital days. |
| Typical Benefit Package | For each type of health plan, the typical benefit package is the benefit package that has the highest percentage of enrollees (the statistical "mode.") Also referred to as the baseline benefit package. |
| Utilization Review | The review of services delivered by a health care provider or supplier to determine whether those services were medically necessary. |
| William M. Mercer | William M. Mercer is an employee benefits consulting firm. |
