Glossary
Below is a glossary of common healthcare terms that appear throughout the website.
Alternative funding arrangement
Any funding arrangement other than one that is fully underwritten, such as are self-insured and partially self-insured groups. Also called flexible funding.
Benefit dollar maximum, benefit maximum
The highest amount the Blues will pay for a specific benefit or class of benefits. A benefit may have an annual or a lifetime maximum.
Blue Preferred PPO
A BCBSM PPO plan that reimburses covered services at 100 percent when members use in-network providers and requires member copayments when services are provided outside the network without a referral from a network provider.
Certificate of creditable coverage
A document that proves an individual previously had health care coverage. It can be applied to reduce or eliminate any preexisting exclusion period that might otherwise apply when someone changes jobs.
COBRA
Federal laws applying to groups of 20 or more, the Consolidated Omnibus Budget Reconciliation Act offers extended coverage for enrollees and family members after group coverage would normally end.
Coinsurance
Coinsurance is the term used by the Health Care Financing Administration to refer to the percentage of the Medicare approved amount that a beneficiary is responsible for paying.
Community Blue
BCBSM`s PPO benefit that includes a wide range of preventive services as basic benefits payable directly to TRUST-network physicians.
Community rating
A system of calculating health insurance premiums based on the average cost of providing medical services to all people in a geographic area without adjusting for an individual's medical history. Also known as area rating.
Consumer Driven Health Care
Consumer driven health care (CDHC) refers to health insurance plans that allow members to use personal Health Savings Accounts (HSAs), Health Reimbursement Arrangements (HRAs), or similar medical payment products to pay routine health care expenses directly, while a high-deductible health insurance policy protects them from catastrophic medical expenses.
Copayment
A copayment is a fixed amount or a percentage of the approved amount a cardholder must pay for a covered service. Example: If you have a 20 percent copayment and received services costing $100. You are responsible for $20.
Deductible
The deductible is the amount a cardholder pays before his or her health plan begins to pay for covered services. Deductibles are required every calendar year. Example: If you have a $100 annual deductible, before your coverage begins to pay, you must pay the first $100 in charges for covered health care services.
Experience rating
A method of determining a group's premium rates based wholly or partly on the group's own claims experience.
Family continuation rider
A rider that provides continuation of coverage for dependents if they meet age and support guidelines.
Family deductible
A deductible that is satisfied by the combined expenses of all family members.
Formulary
A regularly updated list of FDA-approved medications the plan may cover based on the member's prescription benefit, subject to applicable limits and conditions.
Generic drug
A medication that has the same active ingredients, is available in the same strength and dosage form, and is administered in the same way as its equivalent brand-name drug. Generics are usually less costly than brand-name equivalents.
Group
An employer or other entity that has entered into a contract to provide health care for its eligible members.
HMO
A state-licensed health maintenance organization that delivers physician and hospital services to members directly or through contracts with affiliated providers. The plan requires members to choose a network provider (a primary care physician) to coordinate their health care.
Lifetime maximum
A specified dollar amount or a set number of services that the health plan will provide for each member on the contract.
Maintenance drug
A prescription medication that BCN's prescription drug program allows to be dispensed in quantities that exceed a 34-day supply when dispensed at a retail pharmacy.
Maximum allowable cost
BCBSM's prescription drug program feature, the MAC caps reimbursement for commonly dispensed drugs when there are generic products available.
Network
The Blues preferred term for a group of physicians, hospitals and other health care providers under contract to offer care at negotiated rates to its managed care members.
Nonformulary
Drugs in this tier are not on our list of approved drugs because they may not have a proven record for safety or their value may not be as high as drugs in Tier 1 or Tier 2. You may pay a higher copayment or the entire cost of these drugs.
Non-group (Individual)
Insurance purchased by the individual subscriber rather than a group.
Nonparticipating providers
Providers who have not signed a participation agreement with the Blues to accept our approved charge as payment in full.
Out-of-network copayment
The dollar amount or percentage of the Blues-approved amount that the member must pay under a PPO, POS or other managed care plan when going to a non-network provider without an appropriate referral.
Out-of-network services
Services performed by a provider who has not signed a contract with the member's health plan to be part of a provider network.
Out-of-pocket maximum
The highest dollar amount a member or family must pay in combined copayments and deductibles during any given year.
Participating provider
A facility or other provider that contracts with the Blues to provide care or services to members under specific reimbursement terms.
Per-claim participation
Decision by nonparticipating providers to accept our payment as full reimbursement for a particular claim with no further charge to the member.
Physician
Term used in BCBSM certificates to reference medical doctors, doctors of osteopathy, doctors of podiatric medicine, doctors of chiropractic, fully licensed psychologists, doctors of dental surgery and doctors of medicine in dentistry.
PPO
A health care network of primary care doctors, specialists, hospitals and other providers of care, the preferred provider organization focuses on delivering cost-effective, quality patient care. Members save money when they use network providers and avoid a sanction for out-of-network services.
Preexisting condition
A condition for which medical advice, diagnosis, care or treatment was recommended or received within the six-month period ending on the enrollment period after the effective date. This provision is subject to statutory limitations.
Premium
An insurance premium is the periodic payment that a policyholder makes to an insurance company in exchange for insurance coverage.
Premium Only Plan
A Premium Only Plan (Section 125) is of benefit to both employers and employees, in that it helps both to lower their lower income tax liabilities. It makes it possible for employees to use tax-free or pre-tax income to pay medical insurance premiums. This, in turn, helps reduce payroll taxes
Primary care physician (PCP)
A physician a member chooses to provide and coordinate all of their medical health care, including specialty and hospital care, for the Blues' HMO or Point-of-Service (POS) plans. The primary care physician is licensed in the state of Michigan in one of the following medical fields: internal medicine, family practice, general practice, pediatrics, and internal medicine/pediatrics.
Regular Member
Any person eligible for health care services under the subscriber's contract, which includes spouse and dependents.
Rider
A legal document that amends a certificate by increasing, limiting, deleting or clarifying the scope of coverage.
Self-funded plan
The preferred term for a group health plan in which the employer assumes the risk for (or underwrites) the cost of all covered health care services.
Sole Proprietor
A sole proprietor is someone who owns an unincorporated business by himself or herself. However, if you are the sole member of a domestic limited liability company (LLC), you are not a sole proprietor if you elect to treat the LLC as a corporation.
Summary Plan Description
The summary plan description is an important document that 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 become vested, when and in what form benefits are paid, and how to file a claim for benefits.
Underwritten plan
Health care coverage for which the Blues assume the risk for the cost of all covered services.
Urgent care
Services provided for a condition that occurs suddenly and unexpectedly and requires prompt diagnosis and treatment; otherwise, the member might suffer chronic illness, prolonged impairment or the need for more hazardous treatment. Fever, earache, most fractures, sprains, most lacerations, repeated kidney stones and dizziness are examples of conditions that are considered urgent.
Wellness incentives
When you and your covered spouse choose to work toward or achieve quality-of-life goals, you and other covered dependents receive an enhanced benefit level with lower copayments and a lower deductible, if applicable.