Glossary of health insurance terms

Allowed amount

The amount that a provider is allowed to charge for a service. This amount is negotiated between your plan and the provider.

Benefit year

The period of time that your plan benefits apply. An example is if your plan benefit year starts July 1, your plan benefits for that year apply from July 1 through June 30.

Claim

What a provider sends to the plan to ask for payment for a covered service you received.

Coinsurance

The percent that you need to pay for a covered service. For example, if you have a 20% coinsurance for a covered benefit, you pay 20% of the cost and the plan pays the rest.

Copayment

The dollar amount that you need to pay for a covered service, usually when you get the service. For example, if your plan has a $20 copayment for doctor office visits, you'll pay $20 when you visit the doctor. 

Covered services

Health care services or supplies that are covered by the plan. Covered services include visits to your doctor, prescription medications and surgeries. Each plan is different, so be sure to reference your Member Handbook/Evidence of Coverage to confirm your covered services.

Deductible

The dollar amount that you pay before the plan starts to pay for certain services. For example, if you have a $1,000 deductible, you must pay up to $1,000 for certain services before your plan will start paying for them.

The deductible amount for your health plan can be found on the first page of your Schedule of Benefits. Your Schedule of Benefits is available in the secure myFallon member portal.

As a general rule, preventive services are not subject to the deductible. For these types of services, you may have to pay a copayment or coinsurance.

There are different types of deductibles:

  • Embedded deductible: The maximum any one member of a family plan needs to pay toward the deductible. An example is if the plan has a $1,000 deductible with a $500 embedded deductible. That means that each person in the family only has to pay $500 until the plan starts to pay for their services. The other family members will still have a deductible until the total amount paid for services by the family members reaches $1,000.
  • Carry-over deductible: Some plans include a carry-over deductible. This means that that if you pay into the deductible at the end of the year, that amount applies to the next year. An example is if you have a $1,000 deductible and you have services in November and you pay $600 for those services because of your deductible. In January your plan renews, but instead of having to start over paying the $1,000 deductible, you only have to pay $400 because the amount you paid the year before “carried over.”

Only certain services apply to the deductible and each health plan is different, so make sure to review your Member Handbook/Evidence of Coverage and Schedule of Benefits, available on myFallon.

Your Health Benefits Statement that you receive in the mail each month that you have a claim will tell you how much you have paid toward your deductible. How to read your Health Benefits Statement »

Once you’ve met your deductible, you have to pay copayments and/or coinsurance for certain services—but only until you hit your out-of-pocket maximum (OOPM).

Diagnostic service

A service that is done to check the status of or treat a disease or condition. Some examples are blood tests and X-rays.

Sometimes these services are preventive (see Preventive service) and sometimes diagnostic. Example: You go for a routine physical and your doctor orders standard blood work. This blood work is considered preventive. However, if you had a preexisting condition that requires the blood work (such as diagnosed high cholesterol), the blood work is considered diagnostic. Routine for you, but not everyone else.

Explanation of Benefits (EOB)

See Health Benefits Statement.

Formulary

A listing of the prescription drugs that are covered on your plan. It lists the drugs, both generic and brand-name, and also indicates whether there are special rules that apply to that medication, such as prior authorization.

Health Benefits Statement

A document that is sent to members who have a plan with a deductible. It lists the claims we received that month for your medical services, how much the plan allowed, how much the plan paid, and how much you are responsible to pay. It also shows how much you have paid towards your deductible for the benefit year.

A Health Benefits Statement is only sent when claims are received, so you may not get one every month. How to read your Health Benefits Statement »

HIPAA

Health Insurance Portability and Accountability Act. This is a federal law that protects your personal health information. It states that your personal health information can only be used for purposes of treatment, payment and health plan operations–and not for purposes unrelated to health care.

HMO

A Health Maintenance Organization, or HMO, is a health plan that covers your hospital, medical and preventive care. In an HMO, you can only see the providers that the HMO has agreed to work with—except in an emergency, when you can see any provider. This group of providers is called the provider network.

If you see a doctor who is not part of your HMO’s provider network, your services will not be covered.

Out-of-pocket maximum (OOPM)

A dollar amount that limits how much you have to pay for services during the year. An example is if you have a $5,000 OOPM, and you pay a total of $5,000 between copayments, coinsurance and your deductible during the year. For the rest of the year you do not have to pay anything else. Your OOPM may only apply for certain services. Check your Member Handbook/Evidence of Coverage for details regarding your plan benefits.

PPO

A Preferred Provider Organization, or PPO, works like an HMO in that it covers many of the same services. The difference is that with a PPO you not only have access to network providers, but you can also see doctors outside of the network—for higher out-of-pocket costs.

PPOs give you more choice in where you get care, but generally comes at a higher price.

Prior authorization

Sometimes you need to get approval before getting a service in order for it to be covered. This is called prior authorization. This is done to ensure that our members are receiving the right care for the right diagnosis.

When your service needs prior authorization, your doctor puts in the request and Fallon reviews it and decides whether or not the service will be covered. If it is denied and you get the service, the plan will not pay for it and you will be responsible for the cost.

Only some services require prior authorization. Look in your Member Handbook/Evidence of coverage for details regarding your plan benefits.

Premium

The monthly amount due for your health insurance coverage.

Prescription drug tiers

Covered drugs are put into different categories, called tiers. These tiers help you see which drugs have a lower cost to you.

  • Tier 1 means it has the lowest copayment or coinsurance. This tier includes generic drugs.
  • Tier 2 means you have slightly higher copayments or coinsurance. This tier includes cost-effective, preferred brand name drugs.
  • Tier 3 means even higher copayments or coinsurance and includes the rest of the covered drugs, including newer and more expensive drugs.

Some plans have more than three tiers of drugs, and some have fewer. See your Member Handbook/Evidence of Coverage for information about your plan benefits and drug tiering.

Preventive service

Any service that is given to help prevent disease (such as a vaccine) or to detect a condition early (such as a blood pressure test). These are services that are given before you are diagnosed. See your Member Handbook/Evidence for Coverage for information on what services are considered preventive.

Primary care provider (PCP)

Your main provider of care. This provider specializes in internal medicine, family practice or pediatrics and helps you coordinate your care with specialists, coordinate your prescriptions and other services, if needed.

Provider

A doctor or other medical professional, hospital or other facility that provides health care services to you.

Provider network

A group of health care providers like doctors, hospitals and other health care facilities that are contracted with Fallon to provide covered services to you.

Provider tiers

Some plans have categories of providers, called tiers. These tiers help you see which providers have a lower cost to you.

  • Tier 1 means you will pay a lower copayment or coinsurance. This tier includes lower cost, high efficient providers.
  • Tier 2 means higher copayments or coinsurance. This tier includes more expensive, less efficient providers.

Some plans have more than two tiers of providers, others don’t have any. See your Member Handbook/Evidence of Coverage for information about your plan benefits.

Referral

A recommendation from your primary care provider to see another provider for specialty services. For some plans, you cannot see a specialty provider without first getting a referral from your primary care provider. See your Member Handbook/Evidence of Coverage for information about your plan benefits.

Subscriber

The person whose name the health insurance policy is in.

Wellness visits

Your annual visit to your primary care provider. This visit is always free. Your provider will check in with you to make sure you are as healthy as possible. Please note that sometimes during the wellness visit, other services may be provided that are not considered part of the wellness visit, such as a check on your existing high cholesterol or an X-ray on your knee.