Glossary of health insurance terms
Affordable coverage: Employer coverage is considered affordable if the employee’s share of the annual premium for self-only coverage is no greater than 9.5 percent of annual household income. Individuals offered affordable employer-sponsored coverage are not eligible for a premium tax credit.
Broker: A person certified by Colorado to help you enroll in a qualified health plan through Connect for Health Colorado. Brokers can make specific recommendations about which plan you should enroll in. Brokers typically get payments, or commissions, from health insurers for enrolling a consumer into an issuer’s plans. There is no cost to you. Also known as an agent.
Catastrophic health plan: Qualified health plans that don’t cover any benefits, other than three primary care visits per year, before the plan’s deductible is met. The premium amount you pay each month for health care is generally lower than for other plans, but the out-of-pocket costs for deductibles, copayments, and coinsurance are generally higher.
Copayment: A fixed amount you pay for a covered health care service, usually when you get the service.
Deductible: The amount you owe for health care services before your plan begins to pay. For example, if your deductible is $1,000, your plan won’t pay anything until you’ve paid out $1,000 for covered health care services. The deductible may not apply to all services.
Dependent coverage: Insurance coverage for family members of the policyholder, such as spouses, partners or children.
Essential health benefits: Ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care. Health insurance policies and all Medicaid state plans must cover these services by 2014.
Exchange: In Colorado, the exchange is known as Connect for Health Colorado. Also referred to as the online health insurance marketplace.
Guaranteed issue: A requirement that health plans permit you to enroll regardless of health status, age, gender, or other factors that might predict the use of health services.
Group plan: In general, a health plan offered by an employer that provides health coverage to employees and their families. Also known as job-based coverage.
Individual plan: Policies for people that aren’t connected to job-based coverage.
Medal plans: Health plans are separated into four categories — bronze, silver, gold, or platinum. They are categorized based on the amount they pay toward the cost of providing essential health benefits. Bronze plans pay 60 percent. Silver plans pay 70 percent. Gold plans pay 80 percent. Platinum plans pay 90 percent. You are responsible to pay the percentage the plan does not pay. The category you choose affects both the amount of the premium you must pay and the total amount you’ll spend for essential health benefits. For example, the premiums you must pay for a platinum plan will be among the highest, but the total amount you’ll spend out-of-pocket for essential health benefits will be among the lowest.
Open enrollment period: The period of time during which individuals who are eligible can enroll in a health plan listed on Connect for Health Colorado. For 2014, the open enrollment period is Oct. 1, 2013, through March 31, 2014. For 2015 and later years, the open enrollment period is Oct. 15 to Dec. 7 of the previous year. Individuals may also qualify for special enrollment periods outside of open enrollment if they experience certain events.
Out-of-pocket limit: The most you pay during a policy period (usually a year) before your health insurance or plan begins to pay 100 percent of the allowed amount. This limit never includes your premium, balance-billed charges, or amounts paid for health care your plan doesn’t cover. Some plans don’t count your copayments, deductibles, coinsurance payments, out-of-network payments, or other expenses toward this limit.
Penalty: Starting Jan. 1, if someone doesn’t have a qualified health plan, he or she may have to pay a fee that increases every year: From 1 percent of income (or $95 per adult, whichever is higher) in 2014 to 2.5 percent of income (or $695 per adult) in 2016. The fee for children is half the adult amount. The fee is paid on the 2014 federal income tax form, which is completed in 2015. People with very low incomes and others may be eligible for waivers. Also known as a fee.
Pre-existing condition: A health problem you had before the date that new health coverage starts.
Premium tax credit: A tax credit to help pay the cost of the premium for health insurance purchased through Connect for Health Colorado. Advance payments of the tax credit can be used right away to lower your monthly premium costs.