Reference
Benefits Glossary
Key terms and definitions to help you understand your benefits. Jump to a category below.
Health Plan Basics
8 termsBalance Billing
When you are billed by a provider for the difference between the provider's charge and the allowed amount. For example, if the provider's charge is $100 and the allowed amount is $60, you may be billed for the remaining $40.
Coinsurance
Your share of the cost of a covered healthcare service, calculated as a percentage of the allowed amount, typically after you meet your deductible.
Copay
The fixed dollar amount you pay for a covered healthcare service at the time of your visit, as determined by your insurance plan.
Deductible
The amount you owe for covered healthcare services before your insurance begins to pay. Preventive care is not subject to the deductible.
Out-of-Pocket Maximum
The most you will pay in a plan year before your insurance begins to cover 100% of eligible costs. Does not include your premium or services not covered by the plan.
Preventive Care
Routine exams, screenings, and immunizations covered at no cost when received from an in-network provider, regardless of whether you've met your deductible.
Explanation of Benefits (EOB)
A statement from your insurance carrier explaining which services were provided, what the plan paid, and what portion is your responsibility. Not a bill.
Prior Authorization
A requirement that your physician obtain approval from your insurance plan before a specific service or medication is covered.
Network
2 termsIn-Network
Providers that have contracted with your insurance company to offer services at negotiated discounted rates. Using in-network providers results in lower costs to you.
Out-of-Network
Providers that have not contracted with your insurance company. Services received out-of-network are typically subject to higher costs and may result in balance billing.
Prescriptions
6 termsGeneric Drug
A drug approved by the FDA to be chemically identical to a brand-name equivalent. Usually the most cost-effective option.
Preferred Brand Drug
A brand-name drug included on your plan's approved drug list (formulary). Covered at a lower cost than non-preferred brands.
Non-Preferred Brand Drug
A brand-name drug not on your plan's approved drug list. Typically has higher out-of-pocket costs.
Specialty Drug
A high-cost medication used to treat complex or chronic conditions. Often requires prior authorization and must be filled at a specific pharmacy.
Step Therapy
A program that requires you to try a lower-cost medication (generic or preferred brand) before the plan will cover a more expensive alternative.
Over-the-Counter (OTC) Medications
Medications available without a prescription. Some may be eligible for reimbursement through an HSA or FSA.
Savings Accounts
4 termsHealth Savings Account (HSA)
A personal account funded with pre-tax dollars to pay for qualified medical, dental, and vision expenses. Available only to employees enrolled in the HDHP. Unused funds roll over year to year, and the account stays with you if you change jobs.
Healthcare FSA
A pre-tax benefit account used to pay for eligible medical, dental, and vision expenses not covered by your insurance plan. Generally subject to use-it-or-lose-it rules at year end.
Dependent Care FSA
A pre-tax benefit account used to pay for eligible child or elder care expenses that allow you and your spouse to work or attend school.
Limited Purpose FSA
An FSA designed to complement an HSA. May only be used for eligible dental and vision expenses, preserving your HSA eligibility.
Insurance & Income Protection
7 termsBasic Life & AD&D Insurance
Employer-paid coverage provided automatically to all eligible employees. Pays a benefit to your beneficiary in the event of death, or a benefit in the event of a qualifying accidental injury.
Voluntary Life Insurance
Optional, employee-paid life insurance coverage available for yourself, your spouse/domestic partner, or your children, purchased in set increments.
Beneficiary
The person(s) designated to receive your life insurance benefit. Both a primary and contingent beneficiary should be named and kept up to date.
Evidence of Insurability (EOI)
A health questionnaire required when electing life insurance above certain coverage thresholds. The insurer reviews this before approving the higher amount.
Short-Term Disability (STD)
Replaces a portion of your eligible earnings for a limited period if you are unable to work due to a covered illness or injury.
Long-Term Disability (LTD)
Replaces a portion of your eligible earnings if you remain unable to work after your short-term disability benefit period ends.
Elimination Period
The waiting period before disability benefits begin.
Enrollment
6 termsOpen Enrollment
The annual period during which employees may enroll in, change, or cancel benefit elections for the upcoming plan year.
Qualifying Life Event (QLE)
A change in personal or family circumstances — such as marriage, birth of a child, or loss of other coverage — that allows you to update your benefit elections outside of Open Enrollment. Changes must be made within 30 days of the event.
Eligible Dependent
A family member you may enroll in your benefits. Includes your legal spouse or domestic partner and children under age 26.
Plan Year
The 12-month period during which your benefit elections are active.
Summary of Benefits and Coverage (SBC)
A standardized document provided by your insurance carrier that summarizes your plan's benefits, costs, and coverage details.
Summary Plan Description (SPD)
The official document outlining the full rights, obligations, and provisions of each benefit plan. Always the authoritative reference for plan details.