Glossary of Insurance Terms & Definitions

Allowed Amount:  The allowed / maximum amount that your insurance company determines is reasonable for covered services. The allowed amount includes any payments to a provider, plus any deductible, coinsurance or copayment. For in-network providers, the allowed amount is usually the amount the provider has agreed to accept as payment in full. If a healthcare provider charges more than the allowed amount, you may have to pay the difference.


Benefit Period:  The period of time when services are covered under your plan. A benefit period is the time when benefit maximums, deductibles and coinsurance limits build up. It has a start and end date. A benefit period is often one calendar year for health insurance plans.

Example: You may have a plan with a benefit period of January 1 through December 31 that covers 10 physical therapy visits. The 11th+ sessions will not be covered.


Carrier:  The insurance company or insurer.


Coinsurance:  The sharing of costs by your insurance (carrier) and you (subscriber) for covered services after you’ve met your benefit period deductible. Coinsurance is usually shown as a percentage.

For example, if your coinsurance is 20%, that means you’ll pay 20% of covered medical expenses after you’ve met your deductible (and your insurance will pay 80%) until you reach your out-of-pocket limit for the benefit period (usually a year). Once you reach the out-of-pocket limit, your insurance should pay 100% of all covered services for the remainder of the benefit period. Coinsurance is your share of the cost of a covered medical service after you’ve met your deductible for your benefit period (1 year).

Generally, health plans with low monthly premiums have higher coinsurance. Plans with high monthly premiums have lower coinsurance amounts.


Contract:  Agreement between insurance company and policyholder (you).


Copay:  A fixed dollar amount you pay at the time a covered service is provided. Copayment amounts can vary depending on:

  • The benefits or coverage included in your health plan 
  • What services you receive    
  • Using in-network instead of out-of-network doctors / hospital    
  • Seeing a primary care provider (PCP) instead of a specialist
  • Taking generic vs. brand-name prescription drugs

A copayment is the set dollar amount you pay (for example, the $20 you pay when you check out at the doctor’s office) for certain medical services and prescription drugs at the time you get them.

Look at your member ID card. It should list copay amounts for different types of visits, like the charge for a PCP vs. a Specialist, for example.


Covered Charges:  Charges for covered services that your health plan paid for. There may be a limit on covered charges if you receive services from providers outside your plan’s network of providers.


Covered Person:  Any person covered under the plan.


Covered Service:  A healthcare provider’s service or medical supplies covered by your health plan. Benefits will be given for these services based on your plan.


Deductible:  The dollar amount you are responsible to pay for covered services until health insurance “kicks in.” The deductible does not include coinsurance, charges over the allowed amount, amounts exceeding any maximum or expenses for non-covered services.

A deductible is the set dollar amount you pay toward covered medical services each benefit period (typically one year) before your insured provider starts paying toward those services.

Your copays (those fees you pay when you check out at the doctor’s office) do not go toward paying down, satisfying or meeting your annual deductible amount.


Explanation of Benefits (EOB):  Shows the price of a medical service, the amount an insurance company will reimburse a healthcare provider based on negotiated rates, how much your health plan paid them, and your member savings. You’ll also see how much of your deductible you’ve paid, and any copayments, coinsurance or other amounts you may owe.

You’ll get an EOB after a visit to a doctor, health care provider, pharmacy or facility. An EOB lists details of the medical services you received, like the date, amounts paid by insurance, and the cost you may owe.


FSA (Flexible Spending Account):  An FSA is often set up through an employer plan. It lets you set aside pre-tax money for common medical costs and dependent care. FSA funds must be used by the end of the term-year. It will be sent back to the employer if you don’t use it. Check with your employer’s Human Resources team for more information. They can provide a list of FSA-qualified costs that you can purchase directly or be reimbursed for. A few common FSA-qualified costs include:

  • Copays for doctors’ visits, chiropractor and psychological sessions
  • Hospital fees, medical tests and services (like X-rays and screenings)
  • Physical rehabilitation
  • Dental and orthodontic expenses (like cleaning, fillings and braces)
  • Inpatient treatment for alcohol or drug addiction
  • Vaccines (immunizations) and flu shots


Health Insurance:  A contract between you (the subscriber) and an insurance company that requires the insurance company to pay some or all of your healthcare costs in exchange for a premium


HMO (Health Maintenance Organization):  Is a type of managed care health insurance plan that offers healthcare services only with specific HMO providers. Under an HMO plan, you might have to choose a primary care doctor. This doctor will be your main healthcare provider. The doctor will refer you to other HMO specialists when needed. Services from providers outside the HMO plan are hardly ever covered except for emergencies.

HMOs typically offer lower costs, but you will have a more restrictive provider network, and you will have to coordinate your medical care through a primary care physician (PCP).


HSA (Health Savings Account):  An account that lets you save for future medical costs. Money put in the account is not subject to federal income tax when deposited. Funds can build up and be used year to year. They are not required to be spent in a single year. HSAs must be paired with certain high-deductible health insurance plans (HDHP).


Inpatient Services:  Services received when admitted to a hospital and a room and board charge is made. (Three Oaks Behavioral Health & Wellness provides Outpatient Services.)


Medicare:  A federal program for people age 65 or older that pays for certain healthcare expenses. (Three Oaks Behavioral Health & Wellness is not in-network with Medicare or Medicaid.)


Network Provider/In-network Provider:  A healthcare provider who is part of a plan’s network.


Non-covered Charges:  Charges for services and supplies that are not covered under the health plan. Examples of non-covered charges may include things like acupuncture, weight loss surgery, or marriage counseling. Consult your plan for more information.


Non-network Provider/Out-of-network Provider:  A healthcare provider who is not part of a plan’s network. Costs associated with out-of-network providers may be higher or not covered by your plan. Consult your plan for more information.


Outpatient Services:  Services that do not need an overnight stay in a hospital. These services are often provided in a doctor’s office, hospital or clinic. (Three Oaks Behavioral Health & Wellness provides Outpatient Services.)


Out-of-pocket Cost:  Cost you must pay. Out-of-pocket costs vary by plan and each plan has a maximum out of pocket (MOOP) cost. Consult your plan for more information.


Out-of-pocket maximum:  The dollar amount you pay for covered services in a benefit period (usually 1 year) before your insurance pays 100% for covered services. The out-of-pocket maximum can include your deductible, coinsurance and copays, depending on your health plan.

The Out-of-Pocket Limit is the maximum amount you pay for health care in a year before your insurance starts paying all costs for covered services, including deductibles, coinsurance and copays (depending on your plan). You can think of out-of-pocket costs like this: they’re the gas, parking fees and tolls you pay on a business trip before your company reimburses you. Keep your costs lower by making sure your EOB (explanation of benefits) matches your doctor’s bills.


PPO (Preferred Provider Organization):  A type of insurance plan that offers more extensive coverage for the services of healthcare providers who are part of the plan’s network, but still offers some coverage for providers who are not part of the plan’s network. PPO plans generally offer more flexibility than HMO plans, but premiums tend to be higher.


Premium:  The amount that is paid by you (the subscriber) based on your insurance plan. Your contract determines when these payments are due to the insurer.


Provider (Healthcare Provider):  A hospital, facility, physician or other licensed healthcare professional.


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