You will shortly be exposed to a number of health care terms that may be a mystery to you. Outlined below are some of the most common terms and hopefully an explanation that makes sense to you.
COBRA– This is a federal policy that allows you to extend coverage of your health care if you leave a job or are no longer eligible for health care coverage. You will need to pay for your own health care costs in this case, but you will be covered.
HMO- the initials stand for Health Maintenance Organization. In this case, you need to select a primary care doctor who will be responsible for your care. This doctor must be within a network of doctors approved by the HMO. Your doctor will need to provide a referral for any tests or specialty treatment that you need. If you opt to get care from someone who is not approved, then your insurance will not cover your care.
PPO- The initials stand for Preferred Provider Organization. In this option, you can choose a doctor from a group of preferred providers you don’t need to select a primary care physician and you do not need referrals to see other providers in the network. If you receive treatment from someone else, than you will pay more for this care.
Deductible- This is the amount of money you will need to pay for your care until your insurance starts paying for your health care.
Co-Pay- This is the amount you must pay each time you see a doctor, obtain a prescription, or access other health services. Typically this amount will be in the $5-$25 range.
Co-Insurance- This is the percentage amount you have to pay for treatment that is not covered by your health insurance.
PBM- The initials stand for Pharmacy Benefits Manager, A PBM is the organization that manages your drug coverage benefit.
Formulary– a list of drugs that your PBM will pay for.
Coverage limits– the total amount of money your health insurance provider will pay in a year for your medical care.
Out-Of-Network- If you go to any health care provider that is not covered by your health insurance plan, then you will need to pay all or a major part of your bill for services. This could be an issue if y our job requires a lot of travel.
Pre Existing Condition– Any health condition you had prior to being covered by your insurance plan. Many insurance plans would not cover these conditions, but now must under the Affordable Health Care Act.
Open Enrollment Period- A limited period of time each year, (typically at the end of the year) when you can make changes in your health care insurance coverage.
Qualifying Time Period- How long you need to work for an employer to be eligible for health care benefits.
FSA– The initials stand for Flexible Spending Account. You allocate a specific amount each pay period to go into this account. This amount is not taxed. Then you can use this account to pay for things not covered by your health insurance (e.g. co-pays, deductibles) Most FSA’s have a use-it-or-lose it feature.
Like a lot of things, as you transition from college to a career, you will begin to assimilate this information as you need to know it. But the topics that follow may give you the starting point that you need.