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Disclaimer: This glossary contains general definitions
of insurance terminology. For more complete definitions of terms that
may apply specifically to you, please refer to the provisions contained
in your health plan's policy.
Accelerated Death Benefit (ADB) - Benefit included on basic and supplemental
group life insurance policies with a standard waiver of premium provision.
Benefit issued on the date proof is received the insured is terminally
ill with less than 12 months to live.
Accident or Accidental - Sudden, unexpected event that was not reasonable
Accident Guard - Insurance coverage designed to provide supplemental
coverage in the event of accidental injury or death.
Accidental Death and Dismemberment Benefit (AD&D) - The benefit payable
if an insured loses his life or a member of his body as a result of an
accident, while insured under active policy.
Actively at Work or Active at Work - Employee is performing the normal
duties of his occupation and working the number of hours set forth in
Activities of Daily Living (ADL) - Usual activities of an insured in
the non-occupational environment, such as mobility, personal hygiene,
dressing, sleeping and eating. Skills required for community or social
living also are included.
Aggregate Attachment Point - Employer’s
overall limit of claim liability during a contract period.
Aggregate Individual Maximum - Equal to
the group’s Specific Deductible
Level. Eligible claims that apply toward the individual maximum are
based on two criteria: 1) type of benefits included in the aggregate
eligible claims that fall within the contract basis of the aggregate
contract. The accumulation of claims that fall below the Individual
Maximum will apply towards the aggregate attachment point.
Aggregate Stop Loss - Provides a ceiling on the dollar amount of eligible
expenses that an employer would pay, in total, during a contract period.
Aggregating Specific - Option available to an employer that is designed
to reduce specific premiums. The employer accepts additional liability
up to a pre-determined amount specified by the carrier.
Anniversary Date or Renewal Date Flexible Benefits Plan - The anniversary
of your Flexible Benefits Plan issue date or other date on which the
Application - Document which sets forth the eligible classes, the amounts
of insurance, and other relevant information pertaining to the plan of
insurance for which the Policyholder applied. The Application is attached
to and forms a part of the policy, and shall include any subsequent amendments
to the Application.
Automobile - Valid registered four-wheel passenger car (including policyholder-owned
cars), station wagons, jeeps, pick-up trucks and van-type vehicles.
Base Annual Salary - The gross annual compensation prior to before-tax
payroll deductions, if any, which an Insured earns from his occupation
with the Policyholder and which was used in the calculation and remittance
Basic Weekly Wage - Gross weekly compensation
prior to before-tax payroll deductions, if any, which an Insured earns
from his occupation with the
Policyholder and which was used in the calculation and remittance of
Beneficiary - The person or persons designated by a policyholder to receive
insurance policy proceeds.
Benefit - The amount payable by an insurer to a claimant, assignee or
Benefit Period - The length of time specified in a policy during which
benefits will be paid to a disabled insured.
Cafeteria Plan - A written plan that meets the requirements of Code 125
and offers Covered Employees a choice between cash and particular nontaxable
benefits, such as health insurance, thereby providing a funding mechanism
by which employees may pay for the benefits they choose on a pre-tax
Cancer Care - Insurance coverage that covers medical expenses related
particularly to the treatment of cancer.
Child Tax Credit - Under Code 24, a credit against tax liability that
a taxpayer may be able to claim for a qualifying child, regardless of
whether any dependent care expenses are incurred.
Claimant - Insured or beneficiary exercising the right to receive benefits.
Class - The category into which insureds are placed in order to determine
the amount of coverage for which they are eligible under the policy.
COBRA - The federal Consolidated Omnibus
Budget Reconciliation Act of 1985, which established, among other things,
the Group Health Plan continuation
coverage rules that are found in ERISA, the Code and the Public Health
Service Act (PHSA).
Code - The Internal Revenue Code of 1986, as amended.
Co-Insurance - A cost-sharing arrangement
under which a covered person pays a specified percentage of the cost
of a specified service, such
as 20% of the cost of a doctor’s office visits.
Contract Basis - Timeframe in which claims are applicable to the stop
Contributory - The insured pay a portion of the premium for group insurance
Conversion Privilege - A policy provision
that is available if the employee’s
life insurance or a portion of it terminates which allows an employee
to convert to an individual life insurance policy without evidence
Coronary Care - Insurance coverage that covers medical expenses related
particularly to the treatment of coronary illnesses.
Constructive Receipt - A tax law doctrine
under which an employer who is given a choice between cash and nontaxable
benefits (e.g. employer–provided
health insurance) must include in gross income the cash that could
have been received. The doctrine of constructive receipt is frequently
with the phase that “an employee can’t turn his back on
taxable income." Code 125 provides a safe harbor from constructive
receipt for Cafeteria Plans.
Controlled Group of Corporations - Two or
more corporations with overlapping ownership, which are treated as
a single employer for various purposes
under the Code.
Coordination of Benefits - A clause included in health plans or established
by law to determine the order of responsibility for benefits in situations
where a Participant has coverage under more than one plan. Most plans
use a variation of the NAIC model coordination of benefits rule (also
known as the birthday rule).
Co-Payment - A cost-sharing arrangement
under which a covered person pays a specified dollar amount for a specified
service, such as $10 for
a prescription or $20 for a doctor’s office visit.
Critical Illness - Insurance coverage that
provides a lump sum payment upon first diagnosis of a covered “critical illness.” Covered
Critical Illnesses are: Cancer, Carcinoma-in-Situ, Heart Attack, Stroke,
End Stage Renal Disease, Major Organ Transplant Surgery, Quadriplegia,
Coronary Artery Bypass Surgery, Balloon Angioplasty, Stent, or Laser
Relief Obstruction Procedures.
DCAP - See “Dependent Care
DOL - The U.S. Department of Labor.
Deductible - An amount that a person must pay towards a covered health
benefit before any benefit is payable from a plan.
Delinquent Filer Voluntary Compliance Program (DFVCP) -
A DOL program that offers a procedure under which plans may correct
failures to file
Form 5500’s and pay a reduced penalty.
Dependent - Employee’s legal spouse;
and/or any unmarried children of the insured, whether natural or adopted
who are within the age limits
as described in the group application; and not in active military
Dependent Care Account - A Flexible Benefit
program that allows payment of Dependent Care expenses with pre-tax
dollars for the care of a dependent.
Dependent Care Assistance Plan (DCAP) -
A written plan that meets the requirements of Code 129, under which
employees are provided with dependent
care assistance. Most DCAP’s are Flexible Spending Arrangements
(FSA’s) offered under a Cafeteria Plan.
Dependent Care Credit - Under Code 21, a credit against tax liability
that a taxpayer may be able to claim for a qualifying dependent, if the
taxpayer has certain employment-related dependent care expenses.
Dependent Life Insurance - Insurance benefit paid in the event of the
death of an insured dependent any time from any cause.
Diagnosis - The determination of the nature and circumstances of a disease
Effective Date - The date that insurance coverage goes into effect.
Eligibility Date - The date on which a member of an insured group may
apply for insurance.
Eligibility Requirements - Underwriting requirements the applicant must
satisfy in order to become insured.
Eligible Employees - Those employees who have met the eligibility requirements
for insurance set forth in the policy.
Elimination Period - A period of time that the insured must wait before
disability benefits are paid.
Employee - Actively at work, full-time,
employee whose principal employment is with the Employer, at the Employer’s usual place of business
or such place(s) that the Employer’s normal course of business
may require, who is actively at work for the minimum hours per week as
stated in the Application and is reported on the employer’s records
for Social Security and withholding tax purposes.
Employee-Pay-All Plan - A group plan in which the insureds (employees)
pay the entire premium.
Evidence of Insurability (EOI) - Statement
of medical history to determine if employee is approved for coverage
when amount of life insurance is
in excess of the guarantee issue amount for group or late enrollees
under a contributory plan or enrollees under a supplemental life program
does not meet minimum participation requirements.
Exclusions - The section of a policy that outlines specific circumstances
under which benefits will not be paid.
Flexible Benefits Program or Flexible Spending Account - A program authorized
by the IRS; offered through employers that allows employees to choose
to pay for certain benefits with pre-tax dollars.
Gap Care - Supplemental medical expense insurance that helps bridge the
gap between medical care expenses and most benefits not paid by your
other medical plan.
Group Insurance - An arrangement for insuring a number of people (employees)
under a single, master insurance policy.
Group Policyholder - The legal entity to which the master policy is issued.
Guarantee Issue Amount (GI) - Guaranteed
benefit amount payable to the designated beneficiary in the event of
the insured’s death.
Injury - Bodily injury resulting from an accident and independently of
all other causes.
Insurance - A plan of risk management that, for a price, offers the insured
an opportunity to share the costs of possible economic loss through an
entity called an insurer.
Insured - The person (employee, dependent or group member) who is covered
for insurance under the group policy and to whom, or on behalf of whom,
the insurer agrees to pay benefits.
Limitations - See Exclusions
Long Term Care - A wide range of health
and personal care – from
simple assisted living arrangements to intensive nursing home care – for
elderly or disabled person(s).
Long Term Disability (LTD) - Provides a reasonable replacement of monthly
earnings to insureds that become disabled for extended periods of time
due to accident or sickness.
Loss - (1) The amount of insurance or benefit for which the insurer becomes
liable when the event insured against occurs; (2) the happening of the
event insured against.
Material and Substantial Duties - Duties
that are normally required for the performance of insured’s regular
occupation and cannot be reasonably omitted or modified.
Medical Provider - Medical practitioner licensed to treat illness and
acting within the scope of that license.
Medical Reimbursement Account - A Flexible Benefit program that allows
for payment of out-of-pocket medical expenses with tax free dollars.
Minimum Attachment Point - The lowest amount the annual aggregate attachment
point can be reduced when a drop in initial enrollment occurs.
Noncontributory - Policyholder pays 100% of the premium for group insurance.
Partial Disability or Partially Disabled -
The insured is working, but as a result of an injury or sickness which
caused Total Disability, the
insured is able to perform one or more, but not all, of the material
and substantial duties of his occupation on a full time or part time
basis or is able to perform all of the material and substantial duties
of his occupation on a part time basis and is earning less than 80%
of his pre-disability earnings at the time the partial disability employment
Pre-Disability Earnings - A sickness or injury, for which the insured
received medical treatment, consultation, care or services, including
diagnostic measures, or had taken prescribed drugs or medicines prior
to his/her effective date of coverage.
Pre-Existing Condition - An injury or sickness that exists on the effective
date of coverage.
Premium Conversion - A Flexible Benefit program that allows payroll deduction
of eligible insurance premiums on a pre-tax basis.
Policy - The contract between the policyholder and GIS including the
application which provides insurance benefits.
Policyholder - The person, firm, or institution named on the face of
the policy. Policyholder also means any covered subsidiaries or affiliates
set forth on the face of the policy.
Reasonable and Customary Charges (Usual and Customary Charges) - A charge
for dental care that is consistent with the average rate or charge for
identical or similar services in a certain geographic area.
Recurrent Disability - Allows continuation of LTD benefits if the insured
returns to work for less than six months and is again disabled by the
same or related causes.
Regular Occupation - Occupation routinely
performed when a disability begins.
Seat Belt - Belts that form an occupant restraint system.
Seat Belt Benefit - Benefit paid if the insured suffers loss of life
as the result of a covered accident which occurs while insured is driving
or riding in an automobile if the automobile is equipped with seat belts
and the seat belt was in actual use and properly fastened at the time
of the accident.
Section 125 Plan - See Cafeteria Plan.
Short Term Disability (STD) - Provides non-occupational disability benefits
and is payable when an employee becomes disabled due to accident, sickness
or pregnancy and is under the regular care of a medical provider. The
benefit amount, the day benefits begin, and the maximum period for which
benefits are payable are chosen by the employer.
Sickness - Illness, disease, pregnancy or complications of pregnancy.
Specific Stop Loss - Limits the employer’s
cost for eligible medical expenses for each covered individual (also
known as individual stop loss, individual attachment point, deductible,
retention, excess risk and pooling).
Stop Loss Coverage - Product that provides protection against catastrophic
or unpredictable losses. Stop Loss coverage is purchased by employers
who have decided to self-fund their employee benefit plans, but do not
want to assume 100% of the liability for losses arising from the plans.
Supplemental Life - Sold in conjunction with basic group term life coverage.
Terminally Ill - Under the Accelerated Death Benefit, means an Insured
has a life expectancy of 12 months or less due to a medical condition.
Total Disability or Totally Disabled - Due
to Sickness or Injury, the Insured is unable to perform the main and
important duties of any occupation
for which the Insured is reasonably suited by means of education, training
Voluntary - Alternative or supplements to traditional group products,
employee paid through payroll deduction.
Waiting Period - The period of time an employee must satisfy before being
eligible for insurance.
Wavier of Premium - Insured’s life
insurance benefit will continue without further payment of life insurance
premium when an insured becomes
totally disabled without interruption for at least six months. A
claim must be filed with the insurer within 12 months after the date