Health care, financial planning, and taxes: all pretty simple and straightforward, right? Health finance can feel overwhelming, but it doesn't have to be complicated. We're committed to making things simpler where health and money meet. This alphabetical glossary breaks down terms you may be unfamiliar with.
If you still have questions, we'd love to help. Just give us a call at 1-866-999-2605.
- Automated Claim Payment
- A service provided by Blue Cross and Blue Shield of Vermont that allows your health plan to send its invoice (claim) automatically to us for reimbursement.
- Documentation of health care services and costs from a provider. Claims are sent to your insurance company for payment.
- Short for Consolidated Omnibus Budget Reconciliation Act, a federal law under which employers with 20 or more employees must offer continuation of health care coverage to employees (and their dependents) when an employee leaves their job. The employee must pay the entire premium for coverage. Coverage can be extended for up to 18 months.
- The percentage health care costs that you pay after you've met your deductible and your health plan starts to pay. Not all plans have coinsurance.
- A fixed amount that you pay each time you receive health care services, after you've paid your yearly deductible.
- Amount you pay for health care services each year before your health insurance plan pays.
- Dependent Care Assistance Program (DCAP)
- An account that you can use to set aside pre-tax dollars to pay for your day care and other dependent care expenses required to allow you to work. Sometimes this is referred to as a dependent care flexible savings account (FSA).
- Explanation of Benefits (EOB)
- Detailed documentation that explains what health care services you received, from whom, what portion of that care was covered by your health plan, and how much you will owe. An EOB is for your information only; it is not a bill.
- Explanation of Payment (EOP)
- Your EOP is available online at www.bcbsvt.com/mymoney. It is detailed documentation that explains what health care services you received, from whom, and how they were paid.
- Flexible spending account (FSA)
- Each year, this is an account where you set aside pre-tax payroll deductions of your choosing for health care expenses throughout the year. Often referred to as "use it or lose it".
- Grace period
- For a flexible spending account (FSA), this is the amount of time you have after the end of a plan year to spend unused funds. Expenses can be incurred until the end of the grace period. A typical grace period is up to 75 days after the plan year ends.
- Health reimbursement arrangement (HRA)
- Guaranteed money that your employer gives you to pay for some of your health care expenses.
- Health savings account (HSA)
- An account that lets you pay for current health care expenses or save for future expenses. HSAs must be paired with a high deductible health plan (HDHP), and you can't be covered by another health plan. HSAs have significant tax advantages.
- High-deductible health plan (HDHP)
- A plan that offers lower monthly premiums in exchange for a higher deductible (the amount you pay out of pocket before insurance kicks in) shifting more cost onto the individual.
- HSA Plan
- A health savings account (HSA) is a savings account for medical expenses. There are multiple HSA plan options, offering varying fees and interest rates.
- The doctors, hospitals, and other providers that are contracted by your health plan and are available for your use.
- Limited purpose FSA or HRA
- Accounts that cover only expenses for vision, dental, or preventive care.
- Any doctor, hospital, or other provider not contracted by your health plan. You can still use them, but you may have to pay more.
- Out-of-pocket maximum
- The most you would have to pay for covered health care services in a year.
- Post-deductible health FSA
- Provides reimbursement for all Section 213(d) expenses only after the HDHP deductible has been satisfied. Typically, expenses like vision, dental and preventive care are payable out of the post-deductible FSA during the deductible phase.
- Preferred Provider Organization
- A health plan with pre-approved doctors, hospitals, and other providers. This type of plan typically has higher premiums than an high-deductible health plan, but also a lower deductible and it covers more services pre-deductible.
- Your monthly payment to have health insurance coverage.
- A general term that describes the person or place where you receive health care. For example, a doctor, dentist, hospital, or chiropractor, to name a few.
- Roth IRA
- Not a traditional IRA, but a special type of IRA that pays all taxes up front.
- Runout period
- For a flexible spending account (FSA), this is the amount of time you have after the end of the plan year to submit claims for reimbursement. Expenses must be incurred before the end of the plan year.
- Self Employed Contributions Act – The business owner’s version of the FICA tax that employees pay. Like FICA, it is made up of your “contributions” to both the Social Security and Medicare programs. However, the basic tax rate for the self-employed under SECA is 15.30 percent — twice the 7.65 percent rate that employees must pay on their paychecks as FICA tax — to reflect the fact that employees pay one-half the FICA tax and employers pay the other half.
- SEP IRA
- A special type of IRA used as a Simplified Employee Pension Individual Retirement Account
- Simple IRA
- Not a traditional IRA, but a special type of employer provided IRA called Savings Incentive Match Plan for Employees
- Proof that a medical expense or service was valid; may be required when using HRA or FSA funds. Some examples include prescriptions, letters of medical necessity, and receipts.
- Suspended HRA
- Refers to instances where the employee has chosen to discontinue reimbursements from the HRA except for preventive care and permitted benefits during the time period in which the employee is making contributions to an HSA. An employer may still “contribute” to a suspended HRA. Claims incurred during the time that the HRA was suspended cannot be paid at a later date when the HRA is no longer suspended, except claims for preventive care and permitted benefits.
- Traditional IRA
- A tax-deferred retirement account in which individuals can make deductible contributions that are subject to tax only upon withdrawal.
- Acronym for Uniformed Services Employment and Reemployment Rights Act. Established in 1994 to protect people who voluntarily or involuntarily leave their civilian jobs to perform military duties. USERRA requires that employers allow such individuals and their dependents to remain covered by the company- sponsored health plan for up to 24 months, if they choose. If the individual decides not to continue coverage, they can be reinstated in the plan without any waiting periods or exclusions when they return to their civilian job.