Phia Glossary

An unplanned event, unexpected and undesigned, which occurs suddenly and at a definite place.

Physical form or record of an incident, often taken by a representative of a police department and filed according to the specific regulatory procedures.

An injury sustained accidentally. Only the results need be accidental.

Most group health plans state that if an employee is not actively at work on the day the policy goes into effect, the coverage will not begin until the employee does return to work (as aligned with the HIPAA requirements).

The actual amount charged by a physician for medical services rendered.

A representative of the insurer who seeks to determine the extent of the firm's liability for loss when a claim is submitted.

Regulations adopted in accordance with statutory authority to prescribe procedures and requirements within the workers' compensation system.

Ordinarily, a plan may only reach spec and thus seek reimbursement from its reinsurer on a case by case basis. Aggregate allows a plan to reach spec by adding all claims paid together to reach spec, within a given time period.

The lesser of the actual charge, the customary charge and the prevailing charge.

Charges which qualify as covered expenses.

Terms or words in an insurance policy which make the meaning unclear or which can be interpreted in more than one way. The rule of law is that any ambiguity in the policy is construed against the insurer and in favor of the insured. This is because the contract is one of adhesion; that is, the insured must adhere to what the insurer has written. If the insurance does not make its contract clear, it is responsible.

Similar to outpatient treatment in that it is care which does not require hospitalization.

Institutions such as surgery centers, clinics, or other outpatient facilities which provide health care on an outpatient basis.

A formal document which corrects or revises a plan document.

Request to review a claim which has already been reviewed and decided by the plan.

A form on which the prospective entity states facts requested by the carrier on the basis of which, together with information from other sources, the carrier decides whether to accept the risk, modify the coverage offered, or decline the risk.

Amounts paid under Medicare as the maximum fee for a covered service.

A list of approved physicians and other practitioners who may render medical services to employees with compensable injuries or non-occupational diseases.

An employee's accidental injury or occupational disease originating while he or she was engaged in the line of duty in the business or affairs of the employer, upon the employer's premises or elsewhere by the direction, express or implied, of the employer.

A method where the person receiving the medical benefits assigns the payment of those benefits to a physician or hospital.

Medical practitioner who is the primary medical caregiver of an employee with a compensable work-related injury or non-occupational disease.

Taking steps to remove a hazard, engage in an alternative activity, or otherwise end a specific exposure. One of the four major risk management techniques.

Grant of benefits or other fees in a particular case.

Broad definition for any person or entity (like a charity) who is to receive assets or profits from an estate, a trust, an insurance policy or any instrument in which there is distribution.

Financial reimbursement and other services provided to insureds by insurers under the terms of an insurance contract.

The amounts submitted by a health care provider for services provided to a covered individual.

One method of determining which parent's medical coverage will be primary for dependent children: the parent whose birthday falls earliest in the year will be considered as having the primary plan.

Any harm done to a person by the acts or omissions of another.

Legal liability for causing physical injury or death to another.

One who represents an insured in the solicitation, negotiation or procurement of contracts of insurance, and who may render services incidental to those functions. By law, the broker may also be an agent of the insurer for certain purposes such as delivery of the policy or collection of the premium.

A broker who has been designated to handle certain insurance contracts for the policyholder.

(1) The fee or commission received by a broker. (2) Insurance placed by brokers contrasted with that placed by agents.

Business offered to an insurer by a broker. This is sometimes called excess or surplus business.

A department of an insurer whose purpose is to deal with brokers in the placing of insurance.

One acting as an agent of one or more insurers and as a broker in dealing with one or more other insurers.

Termination of a contract of insurance in force by voluntary act of the insurer or insured in accordance with the provisions in the contract or by mutual agreement.

One who sells insurance for only one company as opposed to an agent who represents several companies.

A legally recognized insurance company organized and owned by a corporation or firm whose purpose is to use the captive to write its own insurance at rates lower than those of other insurers. Usually it is a non-admitted insurer that has the right, under special circumstances, to reinsure with an admitted insurer.

See stop loss.

The assessment of a person's long term care needs and the appropriate recommendations for care, monitoring and follow-up as to the extent and quality of services to be provided.

A person, usually an experienced professional, who coordinates the services necessary under the case management approach.

(1) A statement of the coverage and provisions of a master contract in group insurance that is issued to individuals covered in the group. (2) A form which verifies that a policy has been written and states the coverage in general, often used as proof of insurance in loan transactions and for other legal requirements.

Form used by an employer to self-insure its workers' compensation insurance coverage liability.

A demand made by the insured, or the insured's beneficiary, for payment of the benefits provided by the contract.

The expense of adjusting a claim, such as investigation and attorneys' fees. It does not include the cost of the claim itself.

Those who accept cases from the developers, place relevant parties on notice of our right to reimbursement, pursue reimbursement, and obtain reimbursement. They update case status, communicate with the client, and argue rights to subrogation with the opposition.

A report filed by an agent setting forth the facts of a claim.

The person making a demand for payment of benefits.

Any person who makes a claim for benefits for an alleged injury or non-occupational disease.

A company which performs all functions reasonably related to the general management, supervision and administration of the Plan in accordance with the terms and conditions of an administration agreement between the Claims Administrator and the Plan Sponsor.

Amounts set aside to meet costs of claims incurred but not yet finally settled.

A group of insureds having the same characteristics and who are, therefore, grouped together for rating purposes. Class rates apply to dwellings and apartments, since they usually have the same characteristics and are exposed to the same perils.

Shows the Plan payment order when a person is covered under more than one plan. A group policy provision which helps determine the primary carrier in situations where an insured is covered by more than one policy. This provision prevents an insured from receiving claims overpayments.

A program whereby insureds can pay to extend their Plan coverage; Consolidated Omnibus Budget Reconciliation Act of 1986.

This covers loss to the insured person's own auto caused by its collision with another vehicle or object.

In Health Insurance, this term originally applied to policy forms intended for sale to individuals in commerce, as contrasted with industrial workers. Currently the term is loosely used to mean all policies that do not guarantee renewability.

Attorney's fees; this is a doctrine that requires a health plan to reduce by the same fees that the member paid the attorney.

Under this rating system, the charge for insurance to all insureds depends on the medical and hospital costs in the community or area to be covered. Individual characteristics of the insureds are not considered at all.

Benefits or other payments, not limited to, indemnity, medical and surgical aid or hospital and nursing service, and any type of payment for disability, whether for total or partial disability of a permanent or temporary nature, death benefit, funeral expense.

Weekly compensation benefit rate of an employee with a compensable injury or occupational disease.

Simultaneous employment by more than one employer. When an employee with a compensable work-related injury or occupational disease is concurrently employed, the basic compensation rate is based upon the average weekly wages from ALL jobs the employee is unable to work as a result of the injury or disease.

The % of recovery obtained by Phia, and distributed to Phia (Phia Fee) and Phia’s Client (client fee).  The remainder of the recovery goes to the employer group / benefit trust fund.

(1) An agreement entered into by two or more persons under which one or more of them agree, for a consideration, to do or refrain from doing acts in accordance with the wishes of the other party(ies). (2) In insurance, the agreement by which an insurer agrees, for a consideration, to provide benefits, reimburse losses or provide services for an insured. A "policy" is the written statement of the terms of the contract. (3) An agreement under which an agency or agent does business with an insurer.

This period runs from the effective date to the expiration date of the contract.

Payment by employer and employees into fund.

This is an arrangement where the covered person pays a specified amount for various services and the health care provider pays the remainder. The covered person usually must pay his or her share when the service is rendered. Similar to coinsurance, except that coinsurance is usually a percentage of certain charges where the co-payment is a dollar amount.

Procedures which improve the appearance, but are not medically necessary.

The scope of the protection provided under a contract of insurance.

Health care expenses incurred by an insured or covered person that qualify for reimbursement under the terms of a policy contract.

A person who pays premiums into the contract for the benefits provided and who also meets eligibility requirements; a person who is covered under the health plan; employee, dependent, beneficiary.

The Workers' Compensation Commission's Compensation Review Board comprised of two Workers' Compensation Commissioners and the Workers' Compensation Commission Chairman to hear appeals of decisions from lower level informal and formal hearings.

This involves approving a provider based on certain criteria to provide or participate in a health plan.

A Certified Subrogation Recovery Professional who has studied, learned, and passed an exam covering almost all forms of subrogation and relevant law. It is an official designation with the National Association of Subrogation Professionals (NASP).

The amount of money which a plaintiff (the person suing) may be awarded in a lawsuit.

Date a work-related injury occurs or, for occupational disease, the date of total or partial incapacity to work due to the disease.

The date that the health service was provided.

Day a work-related injury occurs. An employee with a compensable work-related injury or occupational disease is entitled to full wages for the entire day an injury occurs and, for purposes of determining workers' compensation benefits, that day is not counted as a day of incapacity from work.

The amount an insured person must pay before the insurance company pays the remainder of each covered loss, up to the policy limits.

A federal department whose responsibility is primarily dealing with social service functions such as administration and supervision of the Medicare program.

A person who is covered under the member's Plan.

Insurance coverage on the head of a family which is extended to his or her dependents, including only the lawful spouse and unmarried children who are not yet employed on a full-time basis. "Children" may be step, foster, and adopted, as well as natural. Certain age restrictions on children usually apply.

A condition that curtails to some degree a person's ability to carry on that person's normal pursuits. A disability may be partial or total, and temporary or permanent.

Evaluation performed by an attending physician to report the existence and extent of an injury.

Refusal of an insurer to provide comparable insurance or use comparable rates for certain individuals or groups with basic characteristics the same as those to whom the coverage or rates are offered. Unfair discrimination is prohibited by law.

Impairment of or injury to the beauty, symmetry, or appearance of a person that renders the person unsightly, misshapen, imperfect, or deforms in some manner or otherwise causes a detrimental change in the external form of the person.

A situation where identical or overlapping coverage exists between two or more insurance companies or service organizations.

The date on which the protection of an insurance policy or bond goes into effect.

A dependent of an insured person who is eligible for coverage according to the requirements set forth in the contract.

An employee who is eligible based on the requirements as indicated in the group contract.

Expenses as defined in the health plan as being eligible for coverage. This could involve specified health services fees or "customary and reasonable charges."

Any person who: (1) has entered into or works under any contract of service or apprenticeship with an employer; (2) is a sole proprietor or business partner; (3) is a salaried officer or paid member of any police or fire department; (4) is a volunteer police officer, whether designated as special or auxiliary; or (5) is an elected or appointed official or agent of any town, city, or borough in the state.

Benefits offered to an employee at his place of work by his employer, covering such contingencies as medical expenses, disability, retirement, and death, usually paid for wholly or in part by the employer.

The employee's evidence of participation in a group insurance plan, consisting of a brief summary of plan benefits. The employee is provided with a certificate of insurance rather than the actual insurance policy.

The employee's share of the premium costs.

Any person, corporation, firm, partnership, voluntary association, joint stock association, the State of Connecticut, or any public corporation within the state using the services of one or more employees for pay, or such an employer's legal representative.

The portion of the cost of a health insurance plan which is borne by the employer.

A written or printed form attached to the policy which alters provisions of the contract.

An eligible individual who is enrolled in a health plan.

Used to describe the total number of enrollees in a health plan. It may also be used to refer to the process of enrolling people in a health plan.

The amount of time an employee has to sign up for a contributory health plan.

Employee Retirement Income Security Act of 1974.

A coverage designed to be in excess of one or more primary coverages, and which does not pay a loss until the loss amount exceeds a certain sum. Contrast with Primary Coverage.

A provision within the plan document that states that the Plan will be excess to any other insurance available.

A contractual provision that denies coverage for certain perils, persons, property, or locations.

A type of preferred provider organization where individual members use particular preferred providers rather than having a choice of preferred providers. EPOs are characterized by a primary physician who monitors care and makes referrals to a network of providers.

The date your coverage ends. There is usually a time of day associated with this date, for example, an expiration date of 5/1/2002 at 12:01am. This means your coverage ends one minute after midnight on the date listed.

The statement sent to a participant in a health plan listing services, amounts paid by the plan, and total amount billed to the patient.

A condition in the insurance policy which allows coverage to continue beyond the expiration date of the policy in the case of employees who are not actively at work or dependents who are hospitalized on that date. The extended coverage applies only where the employee or dependent is disabled as of that date and continues only until the employee returns to work or the dependent leaves the hospital.

Now replaced by the Personal Auto Policy, the Family Auto Policy was a package policy in which both liability and physical damage protection to an insured's vehicle was offered under one policy.

A list of maximum fees for providers who are on a fee-for-service basis.

A person holding the funds or property of another in a position of trust. An example would be the executor of an estate.

Financial responsibility laws require owners and operators of autos to maintain enough money to compensate those they injure. Liability insurance is the most common way to satisfy these requirements.

This pays policyholders and others covered by the policy in the event of injury, no matter who caused the accident. The benefits can include medical expenses, loss of income, funeral and death benefits. This may also be called Personal Injury Protection.

Insurance which applies to coverage for the insured's own property or person. Contrast with Third Party Insurance.

A form required to be filed by an employer in cases of an employee's injury or disease that results in incapacity from work of one day or more.

A type of program where employees can tailor their benefits to meet their own specific needs.

The form self-funded plans coming under the purview of ERISA must file with the IRS. Used to prove a Plan's self-funded status under ERISA.

Formal meeting between the parties in a case for the purpose of resolving differences, disagreements, and the like to provide appropriate benefits to a claimant.

A preferred list of drugs, both generic and brand name, that a health insurer agrees to pay for, at least partially, for any given disease or condition.

The employer plan sponsor has an insurance policy with a commercial insurance company, which collects premiums and is at risk from paying benefits.

A drug which is exactly the same as a brand name drug and which is allowed to be produced after the brand name drug's patent has expired. It is also called a "generic equivalent."

The same definition as Life Insurance but with the application to Health Insurance coverages. See Group Life Insurance.

A specific situation that increases the probability of the occurrence of loss arising from a peril, or that may influence the extent of the loss. For example, accident, sickness, fire, flood, liability, burglary, and explosion are perils. Slippery floors, unsanitary conditions, shingled roofs, congested traffic, unguarded premises, and uninspected boilers are also hazards.

Insurance against loss by sickness or bodily injury. The generic form for those forms of insurance that provide lump sum or periodic payments in the event of loss occasioned by bodily injury, sickness or disease, and medical expense. The term Health Insurance is now used to replace such terms as Accident Insurance, Sickness Insurance, Medical Expense Insurance, Accidental Death Insurance, and Dismemberment Insurance. The form is sometimes called Accident and Health, Accident and Sickness, Accident, or Disability Income Insurance.

An HMO is a prepaid medical service plan which provides services to plan members. Medical providers contract with the HMO to provide medical services to plan members. Members must use contracted providers. The emphasis is on preventive medicine, and it is an alternative to employee benefit plans. Employers of more than 25 persons are required to offer the alternative of HMO to employees, but not if the cost exceeds that of present employee benefit plans.

This refers to any kind of plan that covers health care services such as HMOs, insured plans, preferred provider organizations, etc.

Health Insurance Portability and Accountability Act of 1996.

An accident caused by someone who does not stop to assist or provide information.

A card given to each person covered under the plan which identifies him or her as being eligible for benefits.

Expenses not yet paid. Can also include paid expenses in some accounting systems.

When an auto or WC insurance company sends a patient to an exam done by an independent doctor to see if they still need to treat or if they have reached their maximum medical improvement.

A patient admitted to a hospital or other similar medical facility as a resident patient.

A formal social device for reducing risk by transferring the risks of several individual entities to an insurer. The insurer agrees, for a consideration, to assume, to a specified extent, the losses suffered by the insured.

The printed form which serves as the contract between an insurer and an insured.

The party to an insurance arrangement whom the insurer agrees to indemnify for losses, provide benefits for, or render services to. This term is preferred to such terms as policyholder, policy owner, and assured. See also Named Insured.

The party to an insurance arrangement who undertakes to indemnify for losses, provide pecuniary benefits, or render services. It is desirable to use the word "insurer" in preference to "carrier" or "company" since it is a functional word applicable without ambiguity to all types of individuals or organizations performing the insurance function. The word insurer is generally used in statutory law.

A point in time when a policy has been canceled or terminated for failure to pay the premium, or when the policy contract is void for other reasons.

A drug which has on its label "caution: federal law prohibits dispensing without a prescription."

Any official claim or charge against property or funds for payment of a debt or an amount owed for services rendered.

Care which is provided for persons with chronic diseases or disabilities. The term includes a wide range of health and social services provided under the supervision of medical professionals.

When funds recovered fully compensate for a loss.

A type of Health Insurance that provides benefits up to a high limit for most types of medical expenses incurred, subject to a large deductible. Such contracts may contain limits on specific types of charges, like room and board, and a percentage participation clause sometimes called a coinsurance clause. These policies usually pay covered expenses whether an individual is in or out of the hospital.

A system of health care where the goal is a system that delivers quality, cost effective health care through monitoring and recommending utilization of services, and cost of services.

A plan which involves financing, managing, and delivery of health care services. Typically, it involves a group of providers who share the financial risk of the plan or who have an incentive to deliver cost effective, but quality, service.

Benefits required by state or federal law.

The most a member will pay considering copayments, coinsurance, deductibles, etc.

Total health benefits divided by total premium.

A claim that is filed against a negligent doctor.

A service or treatment which is absolutely necessary in treating a patient and which could adversely affect the patient’s condition if it were omitted.

Coverage that will pay for medical bills and out of pocket medical expenses.

This insurance pays for medical and funeral expenses incurred in an auto accident, regardless of fault. It will also cover injuries sustained by passengers in your car, or while you’re operating someone else’s car (with their permission), in addition to injuries you or your family members incur when you’re pedestrians.

The United States federal government plan for paying certain hospital and medical expenses for persons qualifying under the plan, usually those over 65. The hospital benefits are Part A, and the medical expense portion is Part B. Part A is compulsory social insurance; Part B is voluntary government-subsidized, government-operated insurance.

Any individual covered under a health plan (enrollee or eligible dependent).

A motor vehicle record, also referred to as DL printout, or MVR, contains information obtained from an individual’s driver license application, information regarding convictions, and accidents.

The National Association of Insurance Agents, Inc. and Independent Insurance Agents of America (the Big “I) are a national alliance of more than a quarter million business owners and their employees who offer all types of insurance and financial services products.

The National Association of Insurance Brokers, Inc. is an organization which represents brokers and presents their views before company bureaus, boards, and government agencies, proposes studies and current state and national legislation, supports the interests of brokers and the insurance-buying public, and informs the public of functions and responsibilities of the insurance broker.

The National Association of Insurance Commissioners is the U.S. standard-setting and regulatory support organization created and governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories.

The National Association of Independent Insurers is an association of independently-owned property and casualty claims adjusting companies located throughout the United States.

The National Association of Insurance Women is a trade association open to professionals in the insurance and risk management industries.

Any person, firm, or corporation, or any member thereof, specifically designated by name as the insured(s) in a policy. Others may be protected as insureds even though their names do not appear on the policy. A common application of this latter principle is in Automobile policies where, under the definition of insured, protection is extended to cover other drivers using the car with the permission of the named insured.

The National Association of Professional Insurance Agents represents independent insurance agents in all 50 states, Puerto Rico and the District of Columbia.

Failure to use that degree of care which an ordinary person of reasonable prudence would use under the given or similar circumstances. A person may be negligent by acts of omission or commission or both.

The amount of loss sustained by an insurer after giving effect to all applicable reinsurance, salvage, and subrogation recoveries.

Many states have enacted auto accident compensation laws permitting auto accident victims to collect directly from their own insurance companies for medical and hospital expenses regardless of who was at fault in the accident. Although there are many legal variations of no-fault insurance, most states still allow people to sue the negligent party if the amount of damages exceeds a certain state-determined threshold.

A policy that the owner cannot assign to a third party. Most policies are nonassignable unless approval is given by the insurer.

A risk so high that insurance cannot be written against it.

A provider who has not signed a contract with a health plan or does not participate in the health plan’s existing network.

Termination of insurance coverage at an expiration date or anniversary date. This action may be taken by an insurer who refuses to renew, or by an insured who rejects a renewal offer.

Written notice by an insurer of intent to cancel insurance, or written notice by an insured requesting cancellation.

Notice to an insurer that a loss has occurred. Notice of loss is a condition of most policies, and it is frequently required within a given time and in a particular manner.

An accident arising out of or occurring in the course of one’s employment and caused by hazards inherent in or related to it.

Accidental injury which may be definitely located as to the time when and the place where the accident occurred and is causally connected with the injured person's employment, or is the direct result of repetitive trauma or acts incident to such employment, as well as occupational disease.

A federal statute which establishes safety and health standards on a nationwide basis. The act is enforced by Labor Department safety inspectors and also provides for the recordkeeping of statistics relevant to work injuries and illnesses.

One to whom an offer is made.

One who makes an offer.

The system of social insurance benefits for the aged, surviving dependents, and disabled workers set up by the Social Security Act of 1935, plus amendments and additions. See also Social Insurance and Social Security.

A system whereby a state allows an insurer to use rates without prior approval.

The existence of other contracts covering the same interest and perils. See also Concurrent Insurance.

Any amount a covered person must pay out of his or her own pocket. This includes such things as coinsurance, deductibles, etc.

The maximum coinsurance an individual will be required to pay, after which the insurer will pay 100% of covered expenses up to the policy limit.

A patient who is not a bed patient in the hospital in which he or she is receiving treatment.

Coverage from two or more policies or insurers which duplicates coverage of certain risks. See also Concurrent Insurance.

When the provider is paid too much money. It could be because the health plan paid and another insurance carrier paid or because the health plan did not use the proper discount.

Amounts paid to providers based on the health plan.

A person having professional training in some area of medical care but who is not a doctor.

See Permanent Partial Disability and Temporary Partial Disability.

A loss covered by an insurance policy which does not completely destroy or render worthless the insured property.

An employee or former employee who is eligible to receive benefits from an employee benefit plan or whose beneficiaries may be eligible to receive benefits from the plan.

A health care provider who participates in the health plan’s network and is typically paid at the network rate.

The person receiving money.

Review of health care provided by a medical staff with training equal to the staff which provided the treatment.

Groups of physicians who are paid by the federal government to conduct pre-admission, continued stay and services reviews provided to Medicare patients by Medicare approved hospitals.

This refers to the cap amount an insurance company will pay for all claims arising from a single incident. In an automobile accident, it comprises bodily injuries sustained by all parties. When Bodily Injury coverage is purchased in split limits, the second limit is the "per occurrence" limit: e.g. $100,000 (per person) / $300,000 (per occurrence).

This refers to the cap amount an insurance company will pay for any one person's injuries arising from a single incident. In an automobile accident, it comprises bodily injuries sustained by each person. When Bodily Injury is purchased in split limits, the first limit is the "per person" limit: e.g. $100,000 (per person) / $300,000 (per occurrence).

Total disability from which the insured does not recover. When used as a definition in a policy (usually a life insurance policy rider), "permanent" is presumed after a stated period of time, commonly six months.

The most common auto insurance policy sold today. Often referred to as "PAP," this policy is written in simple wording and provides coverage for liability, medical payments, uninsured/underinsured motorist coverage, and physical damage protection.

Accidental injury which may be definitely located as to the time when and the place where the accident occurred and is causally connected with the injured person's employment or the direct result of repetitive trauma or acts incident to such employment, as well as occupational disease.

The name usually given to no-fault benefits in states that have enacted mandatory or optional no-fault auto insurance laws. Personal Injury Protection (PIP) usually includes benefits for medical expenses, loss of income from work, essential services, accidental death, funeral expenses, and survivor benefits.

Professional Insurance Agents. An association of independent agents involved in educational programs, consumer efforts, and government and industry affairs pertaining to the insurance industry.

The plan of employee welfare benefits provided by the Plan Sponsor.

The Group.

Person who receives benefits or treatment covered by the plan.

A formal written document that describes the Plan and the rights and responsibilities of the Plan Sponsor with regard to the Plan, including any amendments.

Exclusions in the Plan document that the Plan is not responsible for paying, for example illegal acts.

How a health benefit fund is paid for (funded by employer/employee contribution or not).

The entity sponsoring this Plan (the Group). The Plan Sponsor may also be referred to as the Plan Administrator.

The written statement of a contract effecting insurance, or certificates thereof, by whatever name called, and including all clauses, riders, endorsements, and papers attached thereto and made a part thereof.

The anniversary of the date of issue of a policy as shown in the policy declarations.

One who maintains ownership in an insurance policy. This may refer to the policy owner or those covered under the policy. See also Named Insured.

The period of time in which a policy is in effect. (For example, six months or one year).

The period between policy anniversary dates.

A separate account which includes entries for income and expenses. It is used when a number of groups are put together for the purposes of combining their premium and paying their losses.

Permanent Partial Disability or Permanent Partial Disability benefits.

Preferred Provider Organization. A PPO administrator executes a contract with a benefit plan sponsor, third party administrator, or insurance carrier by whose terms the payer agrees to pay bills submitted by medical service providers, within a certain time period and with certain restraints on what the payer can do with the claims, in exchange for the provider accepting a reduced (discounted) payment as payment in full (meaning the provider will not balance bill the patient). The PPO administrator executes a contract with medical service providers as well, regarding the same arrangement. Often, the contracts will not match in all ways, and in such instances, the provider contract generally controls.

A cost containment technique which requires physicians to submit a treatment plan and an estimated bill prior to providing treatment. This allows the insurer to evaluate the appropriateness of the procedures, and lets the insured and physician know in advance which procedures are covered and at what rate benefits will be paid.

A physical condition that existed prior to the effective date of a policy. In many health policies these are not covered until after a stated period of time has elapsed.

An employer's medical care plan for the treatment of its employee's compensable work-related injuries and occupational diseases.

See “PPO” definition. An organization of hospitals and physicians (organized by a PPO administrator) who provide services for a discounted rate. These providers are listed as preferred and the insured may select from any number of hospitals and physicians without being limited as with an HMO. Coverage is 100%, with a minimal copayment for each office visit or hospital stay. Contrast with Health Maintenance Organization. / A selected group of providers who have contracted with the Plan Sponsor or the Contract Administrator to provide health care services to Covered Persons at specific rates. See the benefit schedules of the Health Care Coverage(s) for special benefit levels that may apply to services obtained from contracted providers.

Payment for insurance coverage either in a lump sum or by installments; it is the price of insurance an insured person pays to transfer a specified risk for a specified period of time to the applicable payer or insurance carrier.

(1) A discount allowed on premiums paid in advance of one year, which is based on projected interest to be earned. (2) A discount allowed on certain Workers Compensation and Comprehensive Liability policies to allow for the fact that larger premium policies do not require the same percentage of the premium for basic insurer expenses such as policywriting. The discount percentage increases with the size of the premium. This is not available in all states.

This type of care is best exemplified by routine physical examinations and immunizations. The emphasis is on preventing illnesses before they occur.

Basic health care provided by doctors who are in the practice of family care, pediatrics, and internal medicine.

This is a group of primary care physicians who provide care to those members of a particular health plan.

Some health insurance plans require members to select and seek treatment from a primary physican who either renders treatment or refers the member to an appropriate specialist within the approved health care network.

This is the coverage which pays expenses first (which covers from the first dollar, perhaps after a deductible, as distinguished from excess coverage which pays only after some primary coverage has been exhausted), without consideration whether or not there is any other coverage. See also Coordination of Benefits and contrast with Excess Insurance.

A four-wheeled motor vehicle that is subject to motor vehicle registration and used for private personal use.

(1) Distribution of the amount of insurance under one policy among several objects or places covered in proportion to their value or the amounts shown. (2) Distribution of liability among several insurers having policies on a risk, usually in the proportion that the amount of coverage in each policy bears to the total amount of coverage in all policies.

The likelihood or relative frequency of an event expressed in a number between zero and one. The throw of a die is an example. The probability of throwing five is found by dividing the number of faces that have a five (1) by the total number of faces (6). That is a probability of one-sixth or one divided by six, which is .17. See also Degree of Risk, Law of Large Numbers, and Odds.

A term applied to an agent, solicitor or other person who sells insurance.

The responsibility of manufacturers, distributors and sellers of products to the public to deliver products free of defects which harm an individual or numerous persons and to make good on that responsibility if their products are defective.

An artificial person or entity, governed by charter, engaged in a business which provides a professional service to the public such as medicine or law.

An organization of physicians which reviews services to determine if they are medically necessary.

A formal statement made by a policy owner to an insurer regarding a loss. It is intended to give information to the insurer to enable it to determine the extent of its liability.

A term used interchangeably with "coverage" to denote insurance provided under the terms of a policy.

Any individual or group of individuals that provide a health care service such as physicians, hospitals, etc.; (the facility where the insured has received treatment).

Statements contained in an insurance policy or self-funded benefit plan document, which explain the benefits, conditions and other features of the insurance contract.

An occurrence (such as death, termination of employment, divorce, etc.) that triggers an insured's protection under COBRA, which requires notification to, and an opportunity for purchase of extended coverage by, the former participant (continuation of benefits under a group insurance plan for former employees and their families who would otherwise lose health care coverage), as well as enable them to enroll in a new plan outside the standard enrollment period for that plan.

The cost of a given unit of insurance.

The use of different rates for different insureds for risks of the same class and characteristics. Rate discrimination is prohibited by all state insurance laws.

Variations include usual, appropriate, reasonable, customary, etc. (any combination of these terms). How much a benefit plan or insurance carrier will pay for medical services (the amount approved for payment), regardless of how much is actually charged, when not forced to pay a certain amount by contract (see PPO, HMO, etc.). Traditionally defined as what is most often charged by providers for similar services rendered in that particular area, more plans are recently using objective parameters and third party pricing models (such as Medicare pricing) to define maximum payable amounts (see reference-based pricing or value-based pricing).

A portion of the agent's commission returned to an insured or anything else of value given an insured as an inducement to buy. The payment of policy dividends, retroactive rate adjustments, and reduced premiums that reflect the savings of direct payment to an agent or home office are not usually considered to be rebates. In most cases rebates are illegal, both for the agent or insurer to give a rebate and for an insured to receive one.

A pricing methodology used by health benefit plans to determine how much they should pay to providers of medical services (the maximum payable amount), utilizing objective third party pricing (such as amounts Medicare pays for certain services). Usually, the benefit plan will add an additional percentage to the price payable. Note that, with Reference-based pricing, the amount charged by the provider of the service is ignored; the price is determined by the payer using other parameters and pricing by other entities, based on the actual service performed. This is a major departure from traditional “network” based pricing models, where the amount billed matters – as a discount is applied to the charged amount, and what third parties pay for similar services (such as Medicare) is irrelevant.

Workers' Compensation Commission unit that provides vocational rehabilitation services to eligible employees with compensable work-related injuries or occupational diseases who cannot return to the types of work which caused their injuries or diseases.

To be reimbursed for expenses paid, for which another is responsible.

Insurance for benefit plans which pay plans for claims by the plan beyond a specific deductible. Large insurance carriers collect premium from many people and many employers.  They pool all of this money into one big account.  This is called a risk pool.  Unlike insurance carriers, individual self-funded employers only have their own money to use when it comes to paying for healthcare.  That is why, more often than not, a self-funded plan will buy a special type of insurance (reinsurance – which is insurance for insurance), specifically for self-funded health plans.  This type of “reinsurance” is called stop-loss.  Stop-loss reimburses self-funded health plans when self-funded health plans are asked to pay very large medical bills.  Usually, the self-funded health plan will pay a medical bill, and once the amount paid goes beyond a certain amount (called a specific deductible or “spec” for short), anything the plan pays beyond “spec” is reimbursed to the plan by the stop-loss.

The reestablishment of the in-force status of a policy, the term of which has expired or will expire unless it is renewed; the process of keeping an active policy in force through the issuance of a renewal policy.

A new policy written to take the place of one currently in force.

An agent or sales representative, communicating on behalf of another entity.

(1) Repudiation of a contract. A party whose consent to a contract was induced by fraud, misrepresentation or duress may repudiate it. A contract may also be repudiated for failure to perform a duty. (2) The termination of an insurance contract by the insurer when material misrepresentation has occurred.

Assuming all or part of a risk instead of purchasing insurance or otherwise transferring the risk. One of the four major risk management techniques; a key to self-funding. See Risk Management.

An attachment to a policy that modifies its conditions by expanding or restricting benefits or excluding certain conditions from coverage. See Waiver and Endorsement.

The plan’s right of reimbursement if they have paid claims where a third party is responsible for payment of the same claim. If a third party may be responsible to pay the bills, the plan will need to notify the third party and their own health plan member that the plan has paid the bills, and the plan wants to be reimbursed once everyone agrees how much the third party is responsible to pay. Sometimes the third party gives the money to the plan member to use for the medical bills; since the plan already paid the bills on the member’s behalf, the member has to pass the money on to the plan. Sometimes, the third party pays the plan directly.

(1) Uncertainty as to the outcome of an event when two or more possibilities exist. See also Pure Risk and Speculative Risk. (2) A person or thing insured. Contrast with Hazard and Peril.

Management of the pure risks to which a company might be subject. It involves analyzing all exposures to the possibility of loss and determining how to handle these exposures through such practices as avoiding the risk, reducing the risk, retaining the risk, or transferring the risk, usually by insurance.

See Pool. Large insurance carriers collect premium from many people and employers. They pool all of this money into one big account. This is called a risk pool.

Insurance protection held by schools to cover injuries to students during school activities.

Self-funded employee benefit plans are those where the employer (and employees) fund the plan (provide funds with which medical expenses are paid), and not an insurance carrier. With traditional insurance, carriers accept premium payments from insureds, which are added to a combined “pool” of funds, funded by all of the carrier’s insureds. The collective premiums are calculated by the carrier to equal (1) the total anticipated payout for medical care, (2) operational expenses, and (3) profit. More often than not, an insured pays more in premium then they incur in cost, but is willing to do so to avoid the albeit rare chance they will incur a cost they cannot pay, and the insurer is paid more than the likely cost of medical expenses to assume the risk of paying catastrophic costs. With a self-funded (or self-insured) plan, enough entities (employer and employees) exist and enough funds can be collected that they can bear the risk and avoid paying for a carrier’s expenses and/or profit.

An injury to the body of the insured inflicted by himself.

A catastrophic loss so large that it has a material effect on the underwriting results of a company.

A group or individual policy usually written to cover disabilities of 13 or 26 weeks' duration, though coverage for as long as two years is not uncommon. Contrast with Long-Term Disability Insurance.

A policy written for a period of less time than is normal for that type of policy.

The combining into one pool of several small group businesses used especially for computing more accurate premium rates for members of the pool.

An number of claims a plan must pay before they can seek reimbursement from a reinsurance carrier or stop loss carrier, and for which the plan will not be reimbursed by their carrier.

Each state may have one or more associations of insurance agents. These organizations are made up of individual agents who have joined forces to discuss common problems and promote the American agency system.

Required by or having to do with law or statute.

Any provision in a policy designed to cut off an insurer's losses at a given point. In effect, a stop-loss agreement guarantees the loss ratio of the insurer.

This is a type of reinsurance which can be taken out by a health plan or self-funded employer plan. The plan can be written to cover excess losses over a specified amount either on a specific or individual basis, or on a total basis for the plan over a period of time such as one year.

Agents reporting to other agents and not directly to the company.

The Substitution of one person in place of another with reference to a lawful claim, demand or right, so that the person who is substituted succeeds to the rights of the other in relation to the debt or claim, and its rights, remedies or securities. “To stand in the shoes.” Different types: Contractual and Equitable.

A clause giving an insurer the right to pursue any course of action, in its own name or the name of a policy owner, against a third party who is liable for a loss which has been paid by the insurer. One of its purposes is to make sure that an insured does not make any profit from their insurance. This clause prevents them from collecting from both his insurer and a third party.

A release taken by an insurer upon indemnifying an insured. It contains a provision specifying that the insurer will be subrogated to the rights of recovery that the insured has against any person responsible for the loss.

This term has two meanings. First, it refers to a person or organization who pays the premiums, and second, the person whose employment makes him or her eligible for membership in the plan.

An agreement which describes the individual's benefits under a health care policy.

This is a recap or summary of the benefits provided under the plan. It is used most often with employees covered by self-funded plans.

The title of the head of a state or provincial insurance department used in some jurisdictions. In most states the title "commissioner" is used.

The amount by which assets exceed liabilities.

Burial expenses for an employee who dies as a result of a compensable work-related injury or occupational disease and wage replacement benefits to surviving dependents of such a deceased employee. Such benefits are also known as "Death Benefits", "Dependent Survivors' Benefits", or "Fatality Benefits".

See Temporary Disability Benefits.

Temporary, but only partial, incapacity from work of an employee with a compensable work-related injury or occupational disease. During a period of partial incapacity, an employee can perform SOME types of work and may be eligible for Temporary Partial Disability benefits.

Temporary, but total, incapacity from work of an employee with a compensable work-related injury or occupational disease. During a period of total incapacity, an employee is unable to perform ANY type of work and is eligible for Temporary Total Disability benefits.

The period of time for which a policy or bond is issued.

The date on which a person will no longer be covered by their plan termed. A member is no longer part of a plan, or a group has left a TPA client.

The time the coverage under an insurance policy ends, either because its term has expired or because it has been cancelled by either party.

See Geographical Limitation.

The mathematical principle upon which insurance is based. See also Degree of Risk, Law or Large Numbers, Odds, and Probability.

An entity other than the subject of the claim. In the context of subrogation, the entity who is responsible for the injuries or payment for treatment; party other than an employer or employee who is or may be responsible in some way or to some degree for an employee's compensable injury or disease.

Insurance carriers (who collect premium and make the rules for those who buy insurance from them), not only pay for healthcare, but also receive medical bills, process claims, and cut checks. Self-funded employers, however, don’t know how to process medical bills or “manage” their health plan. That is why they hire a third party administrator or TPA to process claims and pay medical bills using the self-funded plan’s money. Insurance carriers pay bills with their own money; TPAs pay bills with the plan’s money. A TPA is a firm which provides administrative services for employers and other associations having group insurance policies. The TPA in addition to being the liaison between the employer and the insurer is also involved with certifying eligibility, preparing reports required by the state and processing claims. TPAs are being used more and more with the increase in employer self-funded plans.

A person who is not a party to a contract but who has legally enforceable rights under the contract. It might be a Life Insurance beneficiary, or a mortgagee.

The other party is found at fault and is responsible for reimbursing the claims.

A degree of disability from injury or sickness that prevents the insured from performing the duties of any occupation from remuneration or profit. The definition in any given case depends on the wording in a covering policy.

A loss of sufficient size so that it can be said there is nothing left of value. The complete destruction of the property. The term is also used to mean a loss requiring the maximum amount a policy will pay.

Shifting all or part of a risk to another party. Insurance is the most common method of risk transfer, but other devices, such as hold harmless agreements, also transfer risk. One of the four major risk management techniques. See Risk Management.

An injury to a person's physical body caused by an outside source, as distinct from physical disability caused by sickness or disease.

A person appointed to manage the property of another. (G) parties to the contract in order for it to be a valid contract. See also Consideration.

A condition in which not enough insurance is carried to cover the insurable value.

A first-party coverage that is in place when the third party does not have sufficient coverage on their policy.

A technician trained in evaluating risks and determining rates and coverages for them. The term derives from the practice at Lloyd's of each person willing to accept a portion of the risk writing his name under the description of the risk.

The process of selecting risks and classifying them according to their degrees of insurability so that the appropriate rates may be assigned. The process also includes rejection of those risks that do not qualify.

(1) The profit or loss realized from insurance operations, as contrasted with that realized from investments. (2) The excess of premiums over losses and expenses (profit) or the excesses of losses over premiums (loss).

Insurance against loss of income due to unemployment. It is funded by payroll taxes and subject to control by both the federal and state governments. Individuals who are willing and able to work qualify for this insurance by working at a job in an eligible classification, earning a minimum amount of money, and being subject to involuntary unemployment.

This code is scheduled to be implemented on October 1, 1993. It's a federal directive which states how a hospital must provide their patients with bills, itemizing all services included and billed on each invoice.

Underinsured motorists bodily injury coverage (which must be offered in most states) pays for a covered person's bodily injuries of which a person with not enough insurance is legally liable.

Uninsured motorists bodily injury coverage (which must be offered in most states) pays for a covered person's bodily injuries of which an uninsured or hit-and-run motorist is legally liable, but unable to pay.

Uninsured Motorist Property Damage Liability coverage pays for property damages caused by uninsured drivers.

A reserve, based on estimates, to set up claims that have occurred but have not yet been reported to the insurer as of the time when either the policy has expired or the insurer is preparing its annual statement. See also IBNR.

See Reasonable and Customary.

The Workers' Compensation Commission Chairman (in consultation with insurers and medical practitioners) is required to develop and annually publish utilization review procedures for medical treatment in workers' compensation cases. The procedures must be used by medical practitioners, employers, workers' compensation insurance carriers, and Workers' Compensation Commissioners in evaluating the necessity and appropriateness of medical care in workers' compensation cases.

Estimation of the value of an item, usually by appraisal.

Relating to an agreement by an insurer to pay a specified amount of money to or on behalf of the insured upon occurrence of a defined loss.

A person who sells property.

When an insured is injured by another party and the state reimburses the insured for medical or out of pockets for the injuries. Usually the responsible party has violated a law and the state is prosecuting them for the wrongful act.

An accident for which no one is responsible, an act of God.

A policy contract that can be made void at the option of one or more of the parties to it. An example would be a Property Insurance policy which is voidable by the insurer if the insured commits certain acts.

(1) A rider waiving (excluding) liability for a stated cause of injury or sickness. (2) A provision or rider agreeing to waive premium payments during a period of disability of the insured. (3) The act of giving up or surrendering a right or privilege that is known to exist. In Property and Liability fields, it may be effected by an agent, adjuster, company, employee, or company official, and it can be done either orally or in writing.

Workers Compensation Appeals Board.

See Intentional Injury.

When a person is injured at work and files a claim through the employers workers' compensation carrier.

To insure, to underwrite, or to accept an application.

Claimant's written notice alleging a compensable work-related injury or occupational disease and claiming workers' compensation benefits for such. The Workers' Compensation Commission Form 30C serves as a proper written notice of claim.

A claim that is filed against the party that caused the patient's death.