Insurance Terms Dictionary
This page provides a glossary of insurance terms and definitions that are commonly used in the health insurance business.
A
Affordable Care Act (ACA)
Federal law passed in 2010 that prohibits insurers from denying coverage due to pre-existing conditions, sets standards for health insurance policies, includes an individual mandate, and expands Medicaid eligibility.
Agent of Record (AOR)
An individual representing the insured member in purchasing and servicing a policy; listed in CM (Pivot) or HiiQuote.
Appeal
A formal request to review or change the determination of a claim. Providers and members may submit appeals within 180 days of the claim’s processing.
Attending Physician Statement (APS)
A physician’s form submitted with a claim describing diagnosis and identifying services provided to the insured.
B
Balance Billing
When a provider bills the patient for the difference between their charge and what the insurance reimbursed.
Benefit Waiting Period
A specific timeframe during which no benefits are payable (often applies to dental or disability coverage). Duration is listed in the Schedule of Benefits.
Benefits
Payments for medical services covered by the plan. Paid either to the insured (for reimbursement) or directly to the provider if assigned.
C
Cancel Flat
Termination of a policy within the 10-day free look period, resulting in a full refund as if coverage never existed.
Capitation (Pre-Payment)
A fixed monthly payment made to a provider to cover specified services, regardless of utilization.
Carrier
The insurance company that finances and assumes risk for an insurance plan. Examples include Companion Life, Crum & Forster, and Fidelity Security.
Certificate of Insurance (COI) / Summary Plan Document
Document issued to a policyholder showing coverage participation, including benefit amounts, exclusions, limitations, and effective dates. Located in Pivot Portal or HiiQuote.
Claim
An official request for benefit payment after medical care is received. Usually submitted by the provider on behalf of the insured.
COBRA
Federal law (1986) that mandates continuation of employer-sponsored insurance for a limited time after employment ends under qualifying conditions.
Coinsurance (Coins)
The shared cost between insurer and insured after the deductible is met. Expressed as a percentage (e.g., 80/20). Plans pay the larger portion.
Coordination of Benefits (COB)
When two insurers share claim responsibility for one insured, preventing overpayment. Not applicable to most STM plans.
Copay (Copayment)
A fixed fee the member pays for certain services (e.g., office visits or prescriptions). The plan usually covers the rest, depending on policy terms.
Covered Expenses
Services or charges the insurance plan will pay for, as defined in the policy. Non-covered expenses do not count toward deductible or out-of-pocket limits.
D
Deductible (Ded)
Amount of eligible expenses the insured must pay before the plan starts to pay. Can be annual, per visit, or per admission.
E
Eligibility (Elig)
The timeframe when coverage is active. Providers may request effective and termination dates.
Exclusion
A specific condition or service not covered under the policy.
Exclusive Provider Organization (EPO)
A PPO variant requiring members to designate a primary care physician (PCP) and obtain referrals for specialty care. Out-of-network care is typically not covered.
Explanation of Benefits (EOB)
A document showing how a claim was processed, including the insurer’s payment, member responsibility, and any discount or denial explanation.
H
Health Insurance Portability and Accountability Act (HIPAA)
1996 federal law protecting privacy of health info, improving insurance portability, and combating fraud. Mandates coverage availability for small groups and regulates pre-existing condition exclusions.
Health Maintenance Organization (HMO)
Prepaid insurance plan providing care through a network of providers. Members pay a fixed monthly premium and typically only a small copay for services.
M
Managed Care
Refers to health plans (like PPOs and HMOs) that control how services are accessed and delivered to manage cost and quality.
Max Out-of-Pocket (OOP)
The maximum amount the insured must pay for covered expenses, typically including deductibles and coinsurance, but excluding penalties or non-covered costs.
Medicare Allowables
Fees deemed reasonable by Medicare for services, varying by geographic region.
N
Network
A group of providers contracted to deliver services at lower rates under a health plan.
O
Out-of-Pocket
The total cost an insured person must pay for covered expenses, possibly including deductible and coinsurance but excluding copays and non-covered services.
P
Point of Service (POS)
A plan type similar to PPOs but more flexible than EPOs. May not require a PCP, and often allows out-of-network care with some restrictions.
Policy Rescission
Cancellation of a policy due to ineligibility or misrepresentation on enrollment. Coverage is retroactively voided, and premiums may be refunded minus claims paid.
Pre-certification / Pre-notification
Advance approval required by some plans for certain procedures (e.g., hospitalization). Failure to pre-certify can result in reduced or denied benefits.
Pre-Existing Condition (Pre-X)
Any condition for which the member received treatment or advice before coverage began. Definitions vary by plan. Under HIPAA and ACA, some exclusions are prohibited.
Pre-Existing Waiver Rider
An optional addition (HiiQuote only) where a member pays extra to prevent conditions arising during coverage from being treated as pre-existing on renewal.
Preferred Provider Organization (PPO)
A network of providers paid on a fee-for-service basis offering discounted rates. Using in-network providers yields better benefits.
Premium
The amount paid (typically monthly) to maintain insurance coverage.
Provider
Any health care professional or organization delivering medical services—doctors, dentists, hospitals, etc.
R
Rescission
See Policy Rescission.
S
Schedule of Benefits (SOB)
A summary of what a plan covers and maximum allowable amounts. Sometimes includes “usual, reasonable, and customary” limits.
State Rider
A policy amendment ensuring compliance with state insurance regulations. It overrides any conflicting language in the COI.
Superbill
A claim submitted by a member for services they already paid for. Any reimbursement goes directly to the member.
T
Tax Equity and Fiscal Responsibility Act (TEFRA)
1982 law requiring employers to offer the same coverage to employees aged 65+ as younger employees. Allows employee to choose between employer plan and Medicare.
Third-Party Administrator (TPA)
An entity that manages claims processing, benefits administration, and sometimes billing on behalf of the insurer.
W
Waiting Period
A set time after policy start before benefits activate. Can apply broadly or to specific services.