ERISA Healthcare Vocabulary

ERISA Healthcare Plan Lexicon

 

What Meaning
ACA  Affordable Care Act (ACA) refers to two separate pieces of legislation — the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010. Signed under the title of The Patient Protection and Affordable Care Act, the law included provisions that would take effect over a matter of years, including expansion of Medicaid eligibility, establishment of health insurance exchanges and prohibiting health insurers from denying coverage due to pre-existing conditions (colloq.’ ObamaCare’).   (See PPACA).
Access Fee Access Fee is BCBS internal jargon that referred to a specific amount that a person covered under the policy must pay each time certain services are used or received. The access fee is not part of the deductible amount, and is not usually reimbursed by the health insurance carrier. Includes “the Provider Fee, contingency and any cost transfer subsidies or surcharges…”.   However, this term can be misleading. (Syn. “hidden fee”).
Adverse Benefit Determination Adverse Benefit Determination generally includes any denial, reduction, or termination of, or a failure to provide or make payment (in whole or in part) for, a benefit.
AICPA American Institute of Certified Public Accountants (AICPA).
Appeals Process The ERISA Appeals Process is defined by ERISA, § 503, Sec. 1133, Claims procedure.
ASC Administrative Services Contract (ASC). A contract between an insurance company and a self-funded plan where the insurance intermediary company performs administrative services only and does not assume any risk; services usually include claims processing but may include other services such as actuarial analysis and utilization review.   (See ASO).
ASO Administrative Services Only (ASO). An arrangement in which an employer hires an outside third party to deliver administrative services to the employer such as claims processing and billing; the employer bears the risk for claims. Common in self-insured health care plans. See ASC.
Association Health Plan Association Health Plan is sometimes used loosely to refer to any health plan sponsored by an association. It also has a precise definition under HIPAA that exempts from certain requirements insurers that sell insurance to small employers only through association health plans that meet the definition.
BC Colloquial acronym of Blue Cross Blue Shield. (See BCBS).
BCBS Blue Cross Blue Shield (BCBS). The 37 Blue Cross and Blue Shield companies cover more than 105 million Americans (1 in 3 Americans). In the US, more than 96% of hospitals and 92% of professional providers contract with Blue Cross and Blue Shield companies — more than any other insurer. The Blues® currently serve 85% of Fortune 100 companies and 76% of Fortune 500 companies. Moreover, the Blues have enrolled more than half of all U.S. federal workers, retirees and their families, making the Federal Employee Program the largest single health plan group in the world. At least some BCBS companies, like BDBS Michigan have a special tax status:   “special status as a nonprofit, tax-exempt, charitable and benevolent institution”.   A health care corporation subject to this act is declared to be a charitable and benevolent institution, and its funds and property shall be exempt from taxation by this state or any political subdivision of this state. The words insurance, casualty, surety, health and accident, mutual, or other words descriptive of the insurance or surety business” may not be included in its corporate name. BCBSM is a unique statutory creation, distinct from a private insurance company in that “‘it is not carried on as an insurance business for profit . . . , but rather it provides a method and welfare in assisting . . . persons to budget’ health care costs.
BCBSM Blue Cross Blue Shield of Michigan (BCBSM). Note that this style of acronym is applicable to BCBS in other states, e.g. BCBSNC for North Carolina
Beneficiary Beneficiary is any person designated by a participant (or by the terms of an ERISA plan) who is or may become entitled to a benefit under the plan.
BUCAH BUCAH refers to the five largest healthcare TPAs, plus Wellpoint, which together provide TPA services to about half of the insured population in the USA, or approximately 157 million Americans. . (Syn. Insurance Intermediary):♦ Blue Cross Blue Shield (BCBS) (105 million insurees)♦ United Health Care (13 million covered for pharmaceuticals)♦ Cigna (11 million medical insurees)

♦ Aetna (18 million medical insurees)

♦ Humana (10 million medical insurees)

 

Wellpoint, Inc. with 34 million members, or 1 in 9 Americans. It licenses the Blue Cross Blue Shield brand, and operates under several names, e.g. Anthem Blue Cross and Blue Cross Blue Shield of Georgia

Cafeteria Plan Cafeteria Plan is a reimbursement plan governed by IRS Section 125 that allows employees to contribute a certain amount of their gross income to a designated account or accounts before taxes are calculated. These accounts can be for insurance premiums and medical or dependent care expenses not covered by insurance, from which employees can be reimbursed throughout the plan year or claim period as they incur the expenses.  A Cafeteria Plan allows the employer to reduce employees’ gross income, thereby reducing the amount the company pays in Federal Insurance Contributions Act (FICA or Social Security), Federal Unemployment Tax Act (FUTA), Workers’ Compensation, and some State taxes. (See Section 125 Plan, FPB).
CAHI Council for Affordable Health Insurance (CAHI).
CDH Consumer Driven Health (CDH). (See CDHC, CDHP).
CDHC Consumer Driven (or Directed) Health Care (CDHC).   Defined narrowly, CDHC refers to third-tier health insurance plans that allow members to use health savings accounts (HSAs), Health Reimbursement Accounts (HRAs), or similar medical payment products to pay routine health care expenses directly, while a high-deductible health plan (HDHP) protects them from catastrophic medical expenses.
CDHP Consumer Driven Health Plan (CDHP). A CDHP is a health coverage plan that allows members (participants) to use a health reimbursement account (HRA) to pay health care expenses directly, while a high-deductible health coverage plan protects the participant from catastrophic medical expenses.
Claims Process Claims Process for ERISA are defined by DOL regulations.   The deadlines can and do, however change from time to time and there is often considerable lag time before a particular plan is updated. The Fifth Circuit has held that technical noncompliance with ERISA procedures will be excused so long as the claimant is not denied a full and fair review.
CMS HHS Centers for Medicare & Medicaid Services (CMS) oversees Medicare (the federal health insurance program for seniors) and Medicaid (the federal needs-based program), the Children’s Health Insurance Program (CHIP), the Health Insurance Portability and Accountability Act (HIPAA) and the Clinical Laboratory Improvement Amendments (CLIA) and is responsible for implementation of electronic health record (EHR) incentive programs. CMS programs impact about 1 in 3 Americans.
COBRA Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) provides some employees and beneficiaries with the right to continue their coverage under an employer-sponsored group health benefit plan for a limited time after the occurrence of certain events that would otherwise cause termination of such coverage, such as the loss of employment.
Coinsurance Coinsurance is a form of medical cost sharing in a health insurance plan that requires an insured person to pay a stated percentage of medical expenses after the deductible amount, if any, was paid.
Common law fiduciary duty Fiduciary duties in ERISA fall into two broad categories: the duty of loyalty and the duty of care. To perform their services effectively, fiduciaries must be entrusted with power over the entrustors or their property (‘power’). The sole purpose of entrustment is to enable fiduciaries to serve their entrustors.
Concierge <Medical> concierge refers shopping around for the same medical service provided at lowest cost
Conventional Indemnity Plan Conventional Indemnity Plan is an indemnity that allows the participant the choice of any provider without effect on reimbursement.   These plans reimburse the patient and/or provider as expenses are incurred.
Copayment Copayment is a form of medical cost sharing in a health insurance plan that requires an insured person to pay a fixed dollar amount when a medical service is received. The insurer is responsible for the rest of the reimbursement.
Cost sharing Cost sharing for medical services can take a variety of forms, including deductibles (an amount that must be paid before most services are covered by the plan), copayments (fixed dollar amounts), and/or coinsurance (a percentage of the charge for services).
CPCP Contributory Plans Criminal Project (CPCP) is EBSA’s first solely national criminal project. It is designed to target persons who commit fraud and abuse against participants and beneficiaries of contributory employee benefit plans
Deductible Deductible is a fixed dollar amount during the benefit period – usually a year – that an insured person pays before the insurer starts to make payments for covered medical services. Plans may have both per individual and family deductibles.
Deemer Clause Deemer Clause essentially provides that state insurance law cannot operate on employer self-funded benefit plans
Discovery There is Discovery in ERISA cases. The United States Supreme Court issued its opinion in MetLife v. Glenn on June 19, 2008.
EBP Employee Benefit Plan (EBP) refers to a benefit other than salary (such as health insurance or pension) granted by an employer to its employees, subject to a written plan document, the taxable status of which is governed by ERISA.
EBPAQC AICPA Employee Benefit Plan Audit Quality Center (EBPAQC) requires member firms to obtain employee benefit plan specific training, conduct internal inspections of their audit practice, have a peer review, and meet other requirements that provide qualifications to perform an EBP audit.
EBSA Employee Benefits Security Administration (EBSA, DOL), formerly known as the Pension and Welfare Benefits Administration (PWBA).     EBSA is charged with enforcing the rules governing the conduct of plan managers, the investment of plan assets, the reporting and disclosure of plan information, the fiduciary provisions of the law, and workers’ benefit rights.  EBSA provides support and training for compliance to ACA and ERISA.
EOB Explanation of Benefits (EOB) is a form or document that you should get after you had a healthcare service that was paid by the insurance company if you have private health insurance, a health plan from your employer, or Medicare.
EPO Plan Exclusive Provider Organization (EPO) plan is a more restrictive type of PPO plan under which employees must use providers from the specified network of physicians and hospitals to receive coverage; there is no coverage for care received from a non-network provider except in an emergency situation.
Erie Doctrine Erie Doctrine is a fundamental legal doctrine of civil procedure mandating that a federal court in diversity jurisdiction (and some allied state-law claims in federal-law actions) must apply state substantive law. The federal court must honor state common law when deciding state law issues.
ERISA § 1104 Section 1104 of the ERISA Act sets forth the “duty of loyalty that ERISA fiduciaries owe the plan, beneficiaries, and the participants. It requires that fiduciaries discharge their duties solely in the interests of participants and beneficiaries”. Using misleading communication to hide administrative fees is in breach of this fiduciary duty. If actively involved in fraud or concealment, this is in breach of this duty.
ERISA § 1106 Section 1106 of the ERISA Act precludes self-dealing by the TPA. It describes the statute of limitations for breaches of the Act’s sections.
ERISA § 503 Section 503 of the ERISA Act sets forth Claims procedure of ERISA.
ERISA Act Employee Retirement Income Security Act (ERISA) of 1974, as amended. The statute contains four titles (I to IV). ERISA is a A federal law that sets minimum standards for most voluntarily established pension and health plans in private industry to provide protection for individuals in these plans. ERISA requires plans to provide participants with plan information including important information about plan features and funding; provides fiduciary responsibilities for those who manage and control plan assets; requires plans to establish a grievance and appeals process for participants to get benefits from their plans; and gives participants the right to sue for benefits and breaches of fiduciary duty. There have been a number of amendments to ERISA. HIPAA, for example, is an ERISA amendment. In general, ERISA does not cover group health plans established or maintained by governmental entities, and it applies only to the USA. The duties ERISA imposes on fiduciaries have been called the “highest known to law”.  Responsibility for the interpretation and enforcement of ERISA is divided among the Department of Labor, the Department of the Treasury (particularly the Internal Revenue Service), and the Pension Benefit Guaranty Corporation.There have been several significant amendments to ERISA concerning health benefit plans: (a) The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) provides some employees and beneficiaries with the right to continue their coverage under an employer-sponsored group health benefit plan for a limited time after the occurrence of certain events that would otherwise cause termination of such coverage, such as the loss of employment, (b) The Health Insurance Portability and Accountability Act of 1996 (HIPAA) prohibits a health benefit plan from refusing to cover an employee’s pre-existing medical conditions in some circumstances. It also bars health benefit plans from certain types of discrimination on the basis of health status, genetic information, or disability and (c) Other relevant amendments to ERISA include the Newborns’ and Mothers’ Health Protection Act, the Mental Health Parity Act, and the Women’s Health and Cancer Rights Act.
ERISA statute of limitation ERISA statute of limitation varies. ERISA contains a 6-year statute of limitations for certain breach of fiduciary duty claims. However, ERISA does not contain statute of limitations provisions for other claims, including the limitations period for filing a lawsuit after a benefit claim has been denied.
ERISA violations ERISA violations investigated by EBSA are of two types, civil and criminal violations. There are many possible civil violations, e.g. Using plan assets to benefit certain related parties to the plan. Criminal provisions of ERISA are identified in Sections 411, 501, 511 and 519.
FBP Flexible Benefits Plan (FPB) is A benefit program underSection 125 of the Internal Revenue Code that offers employees a choice between permissible taxable benefits, including cash, and nontaxable benefits such as life and health insurance, vacations, retirement plans and child care. Although a common core of benefits may be required, the employee can determine how his or her remaining benefitdollars are to be allocated for each type of benefit from the total amount promised by the employer.   Sometimes employee contributions may be made for additional coverage.
FCA False Claims Act or FCA (31 U.S.C. §§ 3729–3733, also called the “Lincoln Law”) is an American federal law that imposes liability on persons and companies (typically federal contractors) who defraud governmental programs. It is the federal Government’s primary tool in combating fraud against the Government.
Fee schedule Fee Schedule is a list of the maximum fee allowances that a health plan will pay for a certain service based on current procedural terminology (CPT) billing codes; the fee determined by a MCO to be acceptable for a procedure or service, which the doctor agrees to accept as payment in full.
FFS payment Fee for Service (FFS) payment is a system in which the insurer will either reimburse the group member or pay the provider directly for each covered medical expense after the expense has been incurred.
Fidelity Bond Fidelity Bond is a form of business insurance that offers an employer protection against losses – either monetary or physical – caused by its employees’ fraudulent or dishonest actions. Fidelity bonds are often held by insurance companies and brokerage firms, which are specifically required to carry protection proportional to their net capital. Among the possible forms of loss a fidelity bond covers include fraudulent trading, theft and forgery.
Fiduciary In practice, an entity is a fiduciary when a TPA exercises ‘practical control over an ERISA plan’s money’. For example, BCBS had the ability to write checks on the Plan account, determine where Plan funds were deposited, and how and when they were disbursed, and that it allotted to itself an administrative fee, e.g. OTG fee. An entity does not become a fiduciary merely by adhering to contractual obligations or performing ministerial functions.
Form 5500 The IRS, Department of Labor, and Pension Benefit Guaranty Corporation jointly developed the Form 5500-series returns for employee benefit plans to satisfy annual reporting requirements under ERISA and the Internal Revenue Code (Syn. IRS Form 5500).
Fraud Fraud is the intentional deception of a third party that causes some form of harm to the victim. There are many forms of fraud. The statute of limitations for fraud depends on the crime, the region, and sometimes when the crime was discovered.
FSA Flexible Spending Account (FSA) is set up by an employer for an employee, the account allows employees to contribute a portion of their regular earnings to pay for qualified expenses, such as medical expenses or dependent care expenses. FSAs are limited to $2500 per year, and that amount is not taxable.   FSAs are available only with job-based health plans. Employers may make contributions to your FSA.
FSPCP Fiduciary Service Provider Compensation Project (FSPCP) of EBSA investigates the receipt of improper or undisclosed compensation by employee benefit plan consultants and other investment advisers. This project complements the Department’s regulatory and reporting initiatives intended to ensure that plan fiduciaries and participants receive comprehensive disclosure about service provider compensation and conflicts of interest
Fully insured plan Fully insured plan is where an employer purchases healthcare insurance from an insurer, who carries the risk of paying those health benefits for employees. (Ant. self-funded plan”).
Gatekeeper Under some health insurance arrangements, a Gatekeeper is responsible for the administration of the patient’s treatment; the gatekeeper coordinates and authorizes all medical services, laboratory studies, specialty referrals and hospitalizations.
Group Purchasing Arrangement Group Purchasing Arrangement includes a wide array of arrangements in which two or more small employers purchase health insurance collectively, often through a common intermediary who acts on their collective behalf. Such arrangements may go by many different names, including cooperatives, alliances, or business groups on health.
Group Retiree Surcharge Retiree Surcharge was an internal BCBS jargon referring to a fee BCBS began charging customers in the 1980s. This fee irritated some customers and some refused to pay it. Related to a BCBS approach called “retention reallocation”.
HBSP Health Benefits Security Project (HBSP) of EBSA.   The HBSP involves a broad range of health care investigations, including examinations for compliance with ERISA Part 7 and ACA, civil and criminal investigations of multiple employer welfare arrangements (MEWAs), investigations of insurance companies and claim administrators to ensure that promised benefits are actually provided, and criminal investigations of fraudulent medical providers.
HDHP plan High Deductible Health Plan (HDHP) is a health plan product that combines a Health Savings Account (HSA) or a Health Reimbursement Arrangement (HRA) with traditional medical coverage. It provides insurance coverage and a tax-advantaged way to help save for future medical expenses. HDHP/SO plans include savings options.
Health Care False Claims Act Health Care False Claims Act (FCA) is the US government’s primary civil remedy to redress false claims for government funds and property under government contracts, including national security and defense contracts, as well as under government programs as varied as Medicare, veterans benefits, federally insured loans and mortgages, transportation and research grants, agricultural supports, school lunches and disaster assistance.   In 1986, Congress strengthened the Act by amending it to increase incentives for whistleblowers to file lawsuits on behalf of the government, which has led to more investigations and greater recoveries (See FCA).
HHS United States Department of Health and Human Services (HHS).   “The public health system” which is responsible for administrating programs that deal with health and welfare.
HIOS Health Insurance Oversight System (HIOS) is the federal document collection repository for form filing submissions.
HIPAA The Health Insurance Portability and Accountability Act of 1996 (HIPAA) prohibits a health benefit plan from refusing to cover an employee’s pre-existing medical conditions in some circumstances. It also bars health benefit plans from certain types of discrimination on the basis of health status, genetic information, or disability.
HMO Health Maintenance Organization (HMO), a type of MCO, is an organization that provides or arranges managed care for health insurance, self-funded health care benefit plans, individuals, and other entities in the United States and acts as a liaison with health care providers (hospitals, doctors, etc.) on a prepaid basis. Also: Group Model HMO, Staff Model HMO, Network Model HMO, IPA HMO.
HRA Health Reimbursement Arrangements (HRA) are company owned, Internal Revenue Service (IRS)-sanctioned, employer-funded, tax-advantaged employer health benefit plans that reimburse employees for out-of-pocket medical expenses and individual health insurance premiums. Health Reimbursement Accounts are funded solely by the employer and cannot be funded through employee salary deductions. HRAs are among the fastest growing and most popular trends in consumer-driven health care.
HRSA Health Resources and Services Administration (HRSA) is an agency of the U.S. Department of Health and Human Services located in Rockville, Maryland.  It is the primary federal agency for improving access to health care services for people who are uninsured, isolated or medically vulnerable.
HSA Health Savings Account (HSA) is a tax-advantaged medical savings account available to taxpayers in the United States who are enrolled in a high-deductible health plan (HDHP). HSAs are owned by the individual. An HSA account has three major tax savings: the money contributed into the account is tax deductible, it grows tax free, and certain withdrawals are tax free if they are for qualified medical expenses.   HSAs are a consumer-directed plan.
Indemnity Plan Indemnity Plan is a medical plan that reimburses the patient and/or provider as expenses are incurred. (See conventional indemnity plan).
Insurance Intermediary Insurance intermediaries facilitate the placement and purchase of insurance, and provide services to insurance companies and consumers that complement the insurance placement process.   Traditionally, insurance intermediaries have been categorized as either insurance agents or insurance brokers.   (See BUCAH).
IPA Independent Practice Organization (IPA) is an association of independent physicians, or other organization that contracts with independent physicians, and provides services to managed care organizations on a negotiated per capita rate, flat retainer fee, or negotiated fee-for-service basis.
IQPA Independent Qualified Public Accountant (IQPA) is an ERISA requirement. An integral component of ERISA’s annual reporting provisions is the requirement that employee benefit plans, unless otherwise exempt, be subjected to an annual audit performed by an independent qualified public accountant (IQPA) and that the accountant’s report be included as part of the plan’s annual report filed with the DOL.
IRO Independent Review Organization (IRO). State external review programs are usually operated by each state’s department of insurance, and the state typically uses an IRO to assess claims.
IRS Determination Letter IRS Determination Letter is an IRS ruling on the tax consequence of proposed changes to an organization’s purposes or activities. You can request a private letter ruling or determination letter from the IRS. In some areas, the law requires that an organization notify the Internal Revenue Service or receive an advance determination before undertaking a transaction resulting in certain tax consequences.
IRS Form 5500 IRS Form 5500 Series is an important compliance, research, and disclosure tool for the Department of Labor. The Department of Labor, Internal Revenue Service, and the Pension Benefit Guaranty Corporation jointly developed the Form 5500 Series so employee benefit plans could utilize the Form 5500 Series forms to satisfy annual reporting requirements under Title I and Title IV of ERISA and under the Internal Revenue Code (See Form 5500).
IRS Section 105 IRS Section 105 is code that governs TPAs providing these plans:♦ Health Reimbursement Arrangements (HRAs)
IRS Section 125 IRS Section 125 is code that governs TPAs providing these plans:♦ “Cafeteria plans”♦ Medical and Dependent Care Flexible Spending Accounts (FSAs)♦ Premium Only Plans (POPs)
IRS Section 132 IRS section 132 is code that governs TPAs providing these plans:♦ Qualified Transportation Plans (QTPs)
IRS Section 223 IRS section 223 is code that governs TPAs providing these plans:♦ Health Savings Accounts (HSAs)
Lasering Lasering is when an employee gets a high level of claims related to an illness and the insurance company increases the deductible on that one employee. A carrier may also exclude such individuals from coverage. As PPACA rules take effect, they may prohibit lasering.
Limited Benefit Health Insurance Plan Limited Benefit Health Insurance Plan is an insurance product with reduced benefits intended to supplement comprehensive health insurance plans, not to be an alternative to them. You may have seen these types of plans marketed as Cancer Only, Specific Disease, Hospital Cash or Indemnity plans. Limited benefit health insurance plans are not typically required to provide the same level of coverage, so they cover fewer types of medical expenses than a comprehensive policy. These plans also have higher co-insurance percentages, co-payments and deductibles than comprehensive plans.
LMRDA Labor-Management Reporting and Disclosure Act of 1959 (LMRDA).
Loyalty There is an overarching duty of ‘‘Loyalty’’ under §404(a)(1) of ERISA that requires plan fiduciaries to discharge their duties with respect to the plan solely in the interest of the plan’s participants. (See Prudence)
LTD Long Term Disability (LTD) care refers to when a disability prevents a person from working.
MCO Managed Care Organizations (MCO) are organizations that combine the functions of health insurance, delivery of care, and administration. Examples include the independent practice association (IPA), third-party administrator (TPA), management service organization (MSA), and physician-hospital organization (PHO). HMOs and POS are both examples of MCOs.
MCP Managed Care Plans (MCP) generally provide comprehensive health services to their members, and offer financial incentives for patients to use the providers who belong to the plan. Examples of managed care plans include EPO, HMO, PPO and POS plans.
Medigap Medigap, otherwise known as Supplementary Medicare Insurance, are are private policies designed to fill in some of the gaps in Medicare coverage.
MERP Medical Expense Reimbursement Plan (MERP) is a plan that allows employers to give tax-free money to their employees to pay medical expenses. (Syn. HRA).
MEWA Multiple Employer Welfare Arrangement (MEWA) is defined in ERISA as an employee welfare benefit plan, typically providing medical, surgical, or hospital care benefits or benefits in the event of sickness, accident, disability, death or unemployment, to the employees of two or more employers.
MGA Managing General Agent (MGA) is a specialized type of insurance agent/broker that, unlike traditional agents or brokers, is vested with underwriting authority from an insurer. MGAs perform certain functions ordinarily handled only by insurers, such as binding coverage, underwriting and pricing, appointing retail agents within a particular area, and settling claims.
MPD Master Plan Document (MPD). (Syn. Master Plan). (See Plan Document).
MPP Minimum Premium Plan (MPP) is a plan where the employer and the insurer agree that the employer will be responsible for paying all claims up to an agreed-upon aggregate level, with the insurer responsible for the excess. The insurer usually is also responsible for processing claims and administrative services.
MSA Medical Savings Account (MSA) plans combine a high-deductible insurance plan with a medical savings account that you can use to pay for your health care costs. High-deductible health plan: The first part is a special type of high-deductible Medicare Advantage Plan (Part C).
MSO Management Service Organizations (MSO) are owned by a group of physicians, a physician hospital joint venture, or investors in conjunction with physicians.  MSOs generally provide practice management and administrative support services to individual physicians and group practices.
Multiple Employer Health Plan Multiple Employer Health Plan is generally an employee health benefit plan maintained pursuant to a collective bargaining agreement that includes employees of two or more employers.   These plans are also known as Taft-Hartley plans or jointly-administeredPlans and are subject to federal but not State law (although States may regulate any insurance policies that they buy). They often self-insure.
NAHU National Association of Health Underwriters (NAHU). NAHU represents more than 100,000 licensed health insurance agents, brokers, general agents, consultants and benefit professionals through more than 200 chapters across America.
NCQA National Committee on Quality Assurance (NCQA) is a voluntary accreditation organization for HMO and POS products.
Network(also: network doctors, In-network,Out of network) Network is a group of doctors, hospitals and other medical care providers that a specific managed care plan has contracted with to deliver medical services to its members. These doctors either have an agreement with the health plan to charge a set lower amount for services or a hold harmless agreement that they will not bill the marginal difference. Note that in self-insurance with a TPA, companies will be constrained access to a network of doctors for their employees.
Nonprofit Health Care Corporation Reform Act Nonprofit Health Care Corporation Reform Act (Act), 1980 PA 350, MCL 550.1101 et seq. A State Law of Michigan. Act 350 of 1980. The Act defines “health care corporation” to mean a nonprofit hospital service corporation, medical care corporation, or a consolidated hospital service and medical care corporation incorporated or reincorporated under this act, or incorporated or consolidated under former Act 108 or Act 109 of the Public Acts of 1939. Section 105(2).
OAS HHS OIG Office of Audit Services (OAS) conducts independent audits of HHS programs and/or HHS grantees and contractors. These audits examine the performance of HHS programs and/or grantees in carrying out their responsibilities and provide independent assessments of HHS programs and operations.
OEI HHS OIG Office of Evaluation and Inspections (OEI) conducts national evaluations of HHS programs from a broad, issue-based perspective. The evaluations incorporate practical recommendations and focus on preventing fraud, waste or abuse and encourage efficiency and effectiveness in HHS programs.
OI HHS OIG Office of Inspections (OI) conducts criminal, civil and administrative investigations of fraud and misconduct related to HHS programs, operations and beneficiaries. State-of-the-art tools and technology assist OIG investigators around the country and help OI meet its goal of becoming the world’s premier health care law enforcement agency.
OIG HHS Office of Inspector General (OIG) is the largest inspector general’s office in the Federal Government, with approximately 1,600 dedicated to combating fraud, waste and abuse and to improving the efficiency of HHS programs.
OLMS Office of Labor Management Standards (DOL) is the federal law enforcement agency responsible for administering most provisions of the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA).
OTG Other Than Group (OTG) fee. An obscure phrase sometimes formerly used by BCBS to refer to a subsidy (to subsidize insurance policies for any Medicare-eligible person who is not a member of a ‘group’).
Overpayment Overpayment is the identification of insurance claims that were either denied or underpaid to the provider and overpaid and not reimbursed to the self-funded employer (See Recoupment).
PBM Pharmacy Benefit Manager (PBM) typically refers to any of the three large players (Medco, Caremark, Express Scripts)who process and pay prescription drug claims and are responsible for creating and updating your health plan’s drug formulary.
PCP Primary Care Providers (PCP) are physicians who serve as a group member’s primary contact within the health plan. In a managed care plan, the primary care physician provides basic medical services, coordinates and, if required by the plan, authorizes referrals to specialists and hospitals.
PHI Permanent Health Insurance (PHI) is a form of insurance that provides up to 75% of a person’s salary, until retirement, in case of prolonged illness or disability.
PHO Physician Hospital Organization (PHO) refers to alliances between physicians and hospitals to help providers attain market share, improve bargaining power and reduce administrative costs. These entities sell their services to managed care organizations or directly to employers.
Plan Administrator Plan Administrator is a person with statutory responsibility for ensuring that all of the required filings with thefederal government are timely made and the person upon whom the statute imposes authority to make important disclosures to participants about plan benefits. Generally, the plan administrator is designated in the plan document. However, if the plan administrator is not so designated, then the responsibility defaults to the plan sponsor, which is usually the employer. (See Plan Sponsor)
Plan Document The scope of an ERISA plan is defined by the official Plan Document. It is an ERISA requirement that every ERISA health and welfare plan be established and maintained in writing. The plan document describes the plan’s terms and conditions related to the operation and administration of a plan. The plan document determine participant rights and obligations under the plan. It is also a form of notice to employees and provides guidelines for decisions under the plan. The written instrument should be adopted by the employer. An insurance company’s master contract, certificate of coverage, or summary of benefits is usually not sufficient to protect the plan sponsor and should be reviewed by legal counsel. Participants and beneficiaries may bring suit to enforce ERISA’s written plan document requirement.
Plan Sponsor Plan Sponsor refers to the employer in the case of an employee benefit plan established or maintained by a single employer, (ii) the employee organization in the case of a plan established or maintained by an employee organization, or (iii) in the case of a plan established or maintained by two or more employers or jointly by one or more employers and one or more employee organizations, the association, committee, joint board of trustees, or other similar group of representatives of the parties who establish or maintain the plan.
POS Plan Point of Service (POS) plan is an “HMO/PPO” hybrid; sometimes referred to as an “open-ended” HMO when offered by an HMO. POS plans resemble HMOs for in-network services. Services received outside of the network are usually reimbursed in a manner similar to conventional indemnity plans (e.g., provider reimbursement based on a fee schedule or usual, customary and reasonable charges).
PPACA Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (Syn. ACA). Its key provisions are intended to extend coverage to millions of uninsured Americans, to implement measures that will lower health care costs and improve system efficiency, and to eliminate industry practices that include rescission and denial of coverage due to pre-existing conditions.
PPO Plan Preferred Provider Organization (PPO) plan is an indemnity that allows the participant the choice of any provider without effect on reimbursement. These plans reimburse the patient and/or provider as expenses are incurred.
Premium Premium is an agreed upon fee paid for coverage of medical benefits for a defined benefit period.   Premiums can be paid by employers, unions, employees, or shared by both the insured individual and the plan sponsor.
Premium equivalent Premium equivalent is For self-insured plans, the cost per covered employee, or the amount the firm would expect to reflect the cost of claims paid, administrative costs, and stop-loss premiums.
Prudence
  • 404(a)(1) of ERISA imposes a duty of Prudence on all plan fiduciaries, requiring them to act with the care, skill, prudence and diligence that a prudent man familiar with such matters would exercise under similar circumstances (See Loyalty).
QHWBP Qualified Health and Welfare Benefit Plans (QHWBP) are health plan that provide the essential health benefits package described in section 18022 (a) of title 42 U.S. Code § 18021.
qui tam Most false claims actions are filed under the False Claims Act’s (FCA) whistleblower, or qui tam, provisions, which allow private citizens to file lawsuits alleging false claims on behalf of the government. Of the $3. 8 billion the US Justice department recovered in fiscal year 2013, $2. 9 billion related to lawsuits filed under the qui tam provisions of the False Claims Act. In a qui tam action, the citizen filing suit is called a “relator”.
RCM Revenue Cycle Management (RCM) is the process that manages claims processing, payment and revenue generation.   It entails using technology to keep track of the claims process at every point of its life, so the healthcare provider doing the billing can follow the process and address any issues, allowing for a steady stream of revenue.
REACT Rapid ERISA Action Team (REACT). Begun in FY 2001, REACT enables EBSA to respond in an expedited manner to protect the rights and benefits of plan participants when the plan sponsor faces severe financial hardship or bankruptcy and the assets of the employee benefit plan are in jeopardy.   Under REACT, EBSA responds to employer bankruptcies by ensuring that all available legal actions have been taken to preserve pension plan assets.
Recoupment Recoupment is the identification of insurance claims that were either denied or underpaid to the provider and overpaid and not reimbursed to the self-funded employer (See Overpayment).
Reinsurance Reinsurance involves the acceptance by one or more insurers, called reinsurers or assuming companies, of a portion of the risk underwritten by another insurer that has contracted with an employer for the entire coverage.
Retention reallocation Retention reallocation is a phrase used internally by BCBS.   Its meaning is difficult to ascertain, but it is thought to refer to how BCBS may hide certain fees (See Access Fee).
RICO Racketeer Influenced and Corrupt Organizations Act (RICO). RICO was enacted by section 901(a) of the Organized Crime Control Act of 1970 (Pub.L. 91–452, 84 Stat. 922, enacted October 15, 1970). RICO is codified as Chapter 96 of Title 18 of the United States Code, 18 U.S.C. § 1961–1968.
SAR Summary Annual Report (SAR) outlines in narrative form the financial information in the plan’s Annual Report, the Form 5500, and is furnished annually to plan participants.
SBC Summary of Benefits and Coverage (SBC) refers to a concise document detailing, in plain language, simple and consistent information about health plan benefits and coverage, usually four pages. It summarizes the key features of the plan or coverage, such as the covered benefits, cost-sharing provisions, and coverage limitations and exceptions.
Section 105 Plans 26 U.S. Code § 105 – Amounts received under accident and health plans. Section 105 regulations allow for reimbursement of medical expenses under an employer-sponsored health plan. There are various types of Section 105 plans including: Health Reimbursement Arrangements, Medical Expense Reimbursement Plans, Accident and Health Plans, and more.
Section 125 Plan 26 U.S. Code § 125 – Cafeteria plans.   A cafeteria plan is a separate written plan maintained by an employer for employees that meets the specific requirements of and regulations of section 125 of the Internal Revenue Code. It provides participants an opportunity to receive certain benefits on a pretax basis. Participants in a cafeteria plan must be permitted to choose among at least one taxable benefit (such as cash) and one qualified benefit (See Cafeteria Plan, FPB).
Self administration Self administration, unlike outsourcing to a TPA, is where the self-insured company administers its own benefits plan.
Self insurance Self-insurance is a risk management method in which a calculated amount of money is set aside to compensate for the potential future loss. A popular and cost-effective form of self-insurance can be found in various types of employee benefits insurance offered by corporations with many thousands of employees.   It is insurable because having many employees makes the risk pool large enough to predict and price the risk of losses from benefits offered to employees.   The more members, the more predictable forecast of claims experience. The idea of self-insurance is that by retaining, calculating risks, and paying the resulting claims or losses from captive or on-balance sheet financial provisions, the overall process is cheaper than buying commercial insurance from a commercial insurance company. Cost savings to the self-insured entity is usually realized through the elimination of the carrying-costs that commercial insurers are obliged to pass on to their insurance consumers. Self-funded health care is a type of self-insurance arrangement.
Self-funded health care plan Self-funded health care refers to a self-insurance arrangement whereby an employer provides health or disability benefits to employees with its own funds.   The employer carries the risk of providing healthcare for its employees. Historically self-funding has been most effective for large corporations and Fortune 500 companies with over 1,000 employees but with the rising cost of healthcare over the past ten years at a rate of close to 10%, self-funding has become an option for smaller employers. It is now estimated that the average self-funded plan covers 300-400 employees and that about 60% of companies within the U.S. self-fund part of their healthcare plan. About 65% of those self-funded plans have stop-loss insurance. Self-funded plans are not subject to the premium taxes fully-insured plans pay. State mandates are not enforced as plan is governed solely by ERISA. (Ant. Fully Insured plan).
Self-insured plan Self-insured plan offered by employers who directly assume the major cost of health insurance for their employees. Some self-insured plans bear the entire risk.   Other self-insured employers insure against large claims by purchasing stop-loss coverage. Some self-insured employers contract with insurance carriers or third party administrators for claims processing and other administrative services; other self-insured plans are self-administered. MMP are included in the self-insured health plan category.   All types of plans (Conventional Indemnity, PPO, EPO, HMO, POS and PHO) can be financed on a self-insured basis. Employers may offer both self-insured and fully insured plans to their employees.
SMM Summary of Material Modifications (SMM) describe material (important, significant) modifications to a plan and changes in the information required to be in the SPD.
SPBA Society of of Professional Benefit Administrators (SPBA).
SPD Summary Plan Document (SPD) is the main vehicle for communicating plan rights and obligations to participants and beneficiaries. The SPD tells participants what the plan provides and how it operates. It provides information on when an employee can begin to participate in the plan, how service and benefits are calculated, when benefits becomes vested, when and in what form benefits are paid, and how to file a claim for benefits.  If a plan is changed, participants must be informed, either through a revised summary plan description, or in a separate document, called a summary of material modifications, which also must be given to participants free of charge. The plan administrator is legally obligated to provide the SPD to participants, free of charge. The funding mechanism described in the SPD will determine if the plan is self-funded or fully insured. The required content of the SPD is prescribed.
Stackable (or Stacking) Stackable refers to a type of health benefit plan design that combines aspects of different plan types.
Stark Law Stark Law prohibits hospitals from submitting claims to Medicare for patients referred to the hospital by physicians who have a prohibited financial relationship with the hospital.
STD benefits Short-term disability (STD) benefits pay a percentage of an employee’s salary for a specified amount of time, if they are ill or injured, and cannot perform the duties of their job. Coverage usually starts one to 14 days after your employee suffers a condition that leaves them unable to work. Many times, employees are required to use sick days before short term disability kicks in, if it’s an illness that keeps them out of work for an extended period of time.
Stop-loss coverage Stop-loss coverage is a form of reinsurance for self-insured employers that limits the amount the employers will have to pay for each person’s health care (individual limit) or for the total expenses of the employer (group limit). It is reinsurance for a self-funded plan, which an employee benefit plan buys (usually arranged by the TPA as a normal part of administration) as back-up insurance to stop the loss from unexpectedly high claims on the plan. With self-funded plans, employers pay health care claims incurred by employees and their dependents, and purchase stop-loss insurance to cover claims that exceed a certain amount. This mitigates financial risk of self-funding claims under the plan. Stop-loss policies establish a “worst-case scenario”, or aggregate for any given year (The aggregate insurance is often 125 percent of total expected claims).   A stop-loss policy runs solely between the employer and the stop-loss carrier and creates no direct liability to those individuals covered under the plan.
Subrogation Medical subrogation refers to when a third party is responsible for paying for your injuries, thereby relieving some of the insurer’s financial responsibility.
TPA Third-Party Administrator (TPA) is an organization that processes insurance claims or certain aspects of employee benefit plans for a separate entity. A TPA is neither the insurer (provider) nor the insured (employees or plan participants), but handles the administration of the plan including processing, adjudication, and negotiation of claims, record-keeping, and maintenance of the plan.   The TPA is not the policyholder or the insurer; rather, the employer acts as an insurance company and underwrites those risks. TPAs maintain records of the persons covered under the insurance plan.  A TPA is an independent entity that does not have an insurance, BlueCross, or HMO license. This distinguishes a TPA from an insurer or an HMO that also offers administrative services only (ASO) services in conjunction with its fully insured products. Most states require a license for an entity to conduct TPA activities. About 55% of U.S. workers with non-federal health & pension employee benefits are in plans using TPAs.
U.S.C. The Code of Laws of the United States of America (variously abbreviated to Code of Laws of the United States, United States Code, U.S. Code, or U.S.C.) is the official compilation and codification of the general and permanent federal laws of the United States.   It contains 51 titles, along with a further four proposed titles. In the United States, federal laws are subordinate to the United States Constitution but preempt state and local laws. The Code is maintained by the Office of the Law Revision Counsel (LRC) of the U.S. House of Representatives. Codes are listed hierarchically: title, chapter, section, paragraph, clause, sub-clause.   A sample citation would be “Privacy Act of 1974, 5 U.S.C. § 552a (2006)”, read aloud as “Title five, United States Code, section five fifty-two A” or simply “five USC five fifty-two A.” The § symbol is read as “section”. The §§ symbols are read as “sections”.
UCR fee Usual, customary and reasonable (UCR) fee.   Conventional indemnity plans operate based on usual, customary, and reasonable (UCR) charges.   UCR charges mean that the charge is the provider’s usual fee for a service that does not exceed the customary fee in that geographic area, and is reasonable based on the circumstances.   Instead of UCR charges, PPO plans often operate based on a negotiated (fixed) schedule of fees that recognize charges for covered services up to a negotiated fixed dollar amount.
UHCERM NAIC’s Uniform Health Carrier External Review Model Act (UHCERM ) provides uniform standards for the establishment and maintenance of external review procedures to assure that covered persons have the opportunity for an independent review of an adverse determination or final adverse determination.
VEBA Voluntary Employees Beneficiary Associations (VEBAs) are tax-exempt trusts that can be used to fund MEWAs for self insurance.   A type of HRA.
VFCP Voluntary Fiduciary Correction Program (VFCP) of EBSA is a voluntary program intended to protect the financial security of workers through the identification and correction of transactions that violate Part 4 of Title I of ERISA.
Viability Surcharge (Plan wide) Viability Surcharge was an internal BCBS jargon relating to a fee that BCBS began charging customers in the 1980s.   (See Plan wide viability surcharge).
Withold Withhold is a a percentage of a provider’s payment that is “held back” during the plan year to offset or pay for any cost overruns for referral or hospital services. Any part of the withhold not used for these purposes is distributed to doctors.
Wrap Plan Document Wrap Plan Document is the typical way of supplementing an insurance company’s certificate of coverage or insurance contract with the missing ERISA provisions. For a fully insured plan, it is a “wrapper” or “supplement” to an insurance carrier’s master contract, certificate of coverage, or insurance policy. The “wrap document” should make clear to the participants that its contents and the carrier’s documents together constitute the plan document for the plan.

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