New health care plans for 2008
A reference guide to health care lingo
Not sure what a PPO or TPA is? Well, you’re not alone. This list of definitions will help you get familiar with some of the terms and acronyms used when discussing the new health care plans.
Coinsurance
A percentage of the cost for services
you must pay to a provider
once the deductible is met.
Copayment or Copay
A fixed dollar amount you must
pay to a provider at the time services
are received.
Covered Health Services
Health services, supplies, or
equipment provided for the
purpose of preventing, diagnosing,
or treating a sickness, injury,
mental illness, substance abuse,
or symptoms. Covered health services
are supported by national
medical standards of practice and
are consistent with conclusions of
prevailing medical research. Covered
services under the University’s
health care plans are defined
in the plan document.
Deductible
The amount of out-of-pocket
expenses that you must pay for
health services before the plan
begins to pay benefits for many
covered services.
Health Savings
Account (HSA)
A health savings account (HSA)
is a tax advantaged savings plan
that individuals can use to cover
current and future medical expenses.
It allows you to set aside
pretax money, invest the funds
within a broad range of choices,
and then withdraw the money
tax free for qualified health care
expenses. HSA funds roll over
from year to year. Note: You
must be enrolled in an HSA-eligible
plan in order to contribute
to an HSA.
HSA-Eligible Plan
For 2008, the federal government
generally defines an HSAeligible
plan as those with an
individual deductible of at least
$1,100, or family deductible of at
least $2,200. Other requirements
must be met as well. Based on
guidelines, the federal government
will review these amounts
each year and increase them, if
appropriate.
Negotiated Costs
The amount the network provider
has agreed with the thirdparty
administrators (TPAs) to
accept as payment in full for
covered services.
Network Provider
A provider who participates in
the third-party administrator’s
network. A non-network provider
does not participate in
the network.
Out-of-Pocket Maximum
The maximum amount you could
pay out of your own pocket for
covered health care expenses in
a calendar year for deductible
and coinsurance. Copays and the
cost of prescription drugs are not
included (with the exception of
the PPO HSA-Eligible Plan).
Preferred Provider
Organization (PPO)
A preferred provider organization,
or PPO, is a health care
benefit plan that allows those
covered to receive care by network
and non-network providers.
In many cases those covered will
receive a higher level of benefits
for using a network provider
in addition to the lower fees
charged by the provider. The network
provider will automatically
bill the plan, and patients are not
billed for charges higher than the
amount allowed by the TPA.
Reasonable Charges
(Also referred to as “Reasonable
and Customary” or “Usual, Customary,
and Reasonable”)
For services provided by or
on behalf of a network physician,
the reasonable charge is
an amount that does not exceed
negotiated costs. For services
provided by non-network providers,
the maximum amount
considered under your plan for
payment is reasonable charges.
The third-party administrator
develops reasonable charges taking
into account factors such as
the complexity of the service, the
range of services provided, and
the prevailing charge level in the
geographic area where the provider
is located.
Third-Party
Administrator (TPA)
A third-party administrator
(TPA) processes health care
claims and provides additional
services for members. The University
offers the choice of two
TPAs to administer its health
care plans: Aetna or Excellus
BlueCross BlueShield.
