Frequently Asked Questions • Glossary
AD&D
Accidental Death and Dismemberment insurance provides a financial benefit in the event of death by accident or the accidental loss of limb(s), eyesight or hearing.
COBRA
Consolidated Omnibus Reconciliation Act of 1985, a set of federal
laws that require most employers sponsoring group health plans to offer
employees and their families the opportunity for a temporary extension
of their health coverage, called "continuation coverage", in
certain instances where coverage under the plan would otherwise end.
Cafeteria Plan
Also referred to as Section 125 and Flexible Spending Plans, these plans enable employees to decide between cash and qualified benefit plans. The plan allows participants to pay all or part of the premium with pre-tax dollars and was formulated under IRC Section 125.
Closed Formulary
As applied to a pharmacy drug program, a plan that pays only for those medications prescribed by a physician and are part of a specified list of prescription drugs.
Copay (Copayment)
A small dollar amount (usually $25 or less) a plan participant pays to their provider often in lieu of coinsurance.
Deductible
Payment you make to your provider(s) before the insurance carrier begins to pay. Typically, deductibles are met annually in amounts of $250, $500 or $1,000.
Disease Management Programs
Educational programs and support materials provided for patients to assist in the self-management of their condition.
DME
Durable Medical Equipment Equipment are devices that can stand repeated use such as wheelchairs, crutches, hospital beds, oxygen equipment and glucometers.
DOL
Department of Labor
DPO
Dental Preferred Organization a network of providers from whom services can typically be obtained at an increased level of benefit as compared to the level of benefit applied to services obtained from a provider that is not in the network.
EAP
Employee Assistance Plan (Program) a plan designed to offer participants mental heath, substance abuse, financial and legal counseling and referral services. The plan is often used to assist employees whose job performance is being adversely affected by personal problems.
ERISA
Employee Retirement Income Security Act of 1974, a set
of federal laws that affect Health and Welfare, Pension and Profit Sharing
plans. Among other requirements, this law specifies that a Summary Plan
Description (SPD) must be distributed to participants within 120 days
after adoption of a plan and 90 days after an employee becomes a participant.
The SPD is a summary of the plan’s provisions that are written in
a manner to be understood by the average participant.
Fringe Benefit Plan
Cafeteria plans are considered a type of Fringe Benefit Plan. Fringe Benefit Plans are identified in IRC Section 6039D.
FSA
Flexible Spending Account as part of IRC Section 125, allow participants to reduce their gross income by making pre-tax contributions that are later used to reimburse the participant for eligible health care expenses that are not paid by an insurance program and/or eligible dependent care expenses.
HMO
Health Maintenance Organization provides comprehensive health care to voluntarily enrolled participants and their families typically with an emphasis on preventive care.
IRS
Internal Revenue Service a federal government body charged with the responsibility of overseeing the collection of taxes and oversight of federal laws including IRC Section 125 and portions of ERISA.
LTD
Long Term Disability provides partial income protection against income loss due to a disabling condition caused by illness or injury.