Adult Dependent (or Adult Child)
An adult dependent, as referenced in the new law, is a child between the ages of 18 and 26. Even if the young adult is married, no longer lives with his or her parents, is not a dependent on a parent's tax return, or is no longer a student, in most cases, he or she is still eligible for a parent's insurance coverage.
CBA—Collective Bargaining Agreement
A CBA, in the case of health insurance, is an agreement between one or more employers and employee representatives (usually a labor union) that defines the terms and conditions of the health care coverage offered to the employees.
CMS—Centers for Medicare and Medicaid Services
CMS, previously known as the Health Care Financing Administration (HCFA), is a federal agency within the United States Department of Health and Human Services (HHS) that administers the Medicare program and works in partnership with state governments to administer Medicaid, the State Children's Health Insurance Program (SCHIP), and health insurance portability standards. In addition to these programs, CMS has other responsibilities, including the administrative simplification standards from the Health Insurance Portability and Accountability Act (HIPAA) of 1996, quality standards in long-term care facilities through its survey and certification process, and clinical laboratory quality standards under the Clinical Laboratory Improvement Amendments (CLIA).
Cadillac Health Plan
"Cadillac," or high-cost, employer-sponsored health care plans are defined by the total cost of premiums. To be considered Cadillac plans, health plans' applicable dollar thresholds are greater than $10,200 per year for single coverage, or $27,500 per year for family coverage when the tax on these plans goes into effect in 2018 (amounts will be adjusted for inflation).
COBRA—Consolidated Omnibus Budget Reconciliation Act
COBRA refers to protections that give most workers who lose their health benefits the right to choose to continue group health coverage benefits during times of voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, and in some cases, under other circumstances. Under COBRA, the employee or family member may qualify to keep his or her group health plan benefits for a set period of time, depending on the reason for losing the health coverage. The new law does not change COBRA requirements.
Efficacy measures or indicates how well an intervention or solution works in a controlled environment, such as clinical trials or laboratory studies.
Effectiveness relates to how well a treatment works in practice.
The effective date is the date on which an agreement, such as insurance coverage, takes effect, and is the first day of active benefits from a policy.
Employer-based Health Care
Employer-based health care refers to health plans that are offered at the workplace for employees as part of a benefit package.
The enactment date is the date the Patient Protection and Affordable Care Act (PPACA) was signed into law—March 23, 2010.
ERISA—Employee Retirement Income Security Act
ERISA is a federal law that sets minimum standards for most voluntarily established pension and health plans in private industry to provide protection for individuals in these plans.
Evidence-based medicine is a method of improving and evaluating patient care. It involves combining the best research evidence with patient values to make decisions about medical care. Looking at all available medical studies and literature that pertain to an individual patient, or a group of patients, helps doctors properly diagnose illnesses, choose the best testing plan, and select the best treatments and methods of disease prevention. By using evidence-based medicine techniques for large groups of patients with the same illness, doctors can develop practice guidelines for evaluation and treatment of particular conditions. In addition to improving treatment, such guidelines can help individual physicians and institutions measure their performance and identify areas for further study and improvement.
An exchange is a marketplace of insurance plans run by a government or nonprofit agency, to help individuals and employers obtain health insurance coverage. A provision of the new law is that each state will establish an exchange by 2014. Insurers participating in the exchanges will be accredited for quality, present their benefit options in a standardized manner for easy comparison, and use one, simple enrollment form. Federal support will be available for new nonprofit, member-run insurance cooperatives, and the United States Office of Personnel Management will supervise the offering by private insurers of multi-state plans available nationwide. States will have flexibility to: (a) establish basic health plans for non-Medicaid, lower-income individuals, (b) seek waivers to explore other reform options, and (c) form compacts with other states to permit the cross-state sale of health insurance.
Federal High Risk Pool Program
The Federal High Risk Pool Program is a federally funded initiative to provide affordable health insurance coverage to uninsured individuals with preexisting conditions. The law appropriates $5 billion in federal funds to support the new, temporary high risk pool program. The program will be available in all states, and states may choose whether and how they participate in the program. The program will be available starting July 1, 2010, and end on January 1, 2014, when individual insurance coverage will be available through the exchanges on a guaranteed issue basis, without regard to health status and without preexisting condition provisions.
FTE—Full-Time Equivalent Employee
A full-time equivalent employee is an employee that works an average of at least 30 hours per week.
Grandfather Clause (also Grandfathered or Grandfathering)
A grandfather clause is an exception that allows an old rule to continue to apply to some existing situations, while a new rule will apply to all future situations. Individual and group health plans in effect prior to the law's enactment date of March 23, 2010, could be grandfathered, unless they make certain changes that would cause the plans to lose their grandfathered status. Changes that would result in a loss of grandfathered status include: increasing co-insurance, deductibles, copayments, or out-of- pocket maximums by more than what is allowed in the interim final regulation related to grandfathering.
Group Health Plan
A group health plan is an employee welfare benefit plan that provides medical care, and items and services paid for as medical care, to employees or their dependents (as defined under the terms of the group health plan).
Household income, for the law's purposes and with respect to any taxpayer, is defined as an amount equal to the sum of the modified adjusted gross income of the taxpayer, plus the aggregate modified adjusted gross incomes of all other individuals who (a) were taken into account in determining the taxpayer's family size, and (b) were required to file a tax return for the taxable year. (See also: Modified Adjusted Gross Income.)
HHS—U.S. Department of Health and Human Services
HHS is the United States government's principal agency for protecting the health of all Americans and providing essential human services, especially for those who are least able to help themselves.
Health Information Technology
Health information technology (HIT) allows comprehensive management of medical information and its secure exchange between health care consumers and providers.
An individual mandate is the requirement for all individuals to have health insurance coverage (with limited exceptions, such as religious beliefs). Beginning in 2014, under federal law, all individuals will be required to maintain minimum, essential health insurance coverage each month. If the individual fails to meet the requirement, he or she will incur a penalty, the amount of which is defined by the law. (Please note that there is already an individual mandate under Massachusetts law.)
The individual market is the market for health insurance coverage for direct purchase by individuals, rather than in connection with an employer-based group health plan or any other group health plan.
Medicaid provides health coverage to low-income individuals and families who are determined as eligible by federal and state law. Eligibility rules vary from state to state. Medicaid sends payments directly to providers for individuals and/or families who qualify, but, depending on state rules, beneficiaries may pay a copayment for some medical services.
Medicare is a government health insurance program that provides medical care to people age 65 and older, under the age of 65 with certain disabilities, and people of any age with end-stage renal disease (ESRD). Medicare is broken down into four parts: hospital insurance (Part A), medical insurance (Part B), Medicare Advantage (Part C), and prescription drug coverage (Part D).
Medicare Advantage is a program under which Medicare-approved private insurance companies provide health insurance coverage to Medicare beneficiaries. Enrollees pay a monthly premium, in addition to the Medicare Part B premium, and may also be responsible for other out-of-pocket costs, such as deductibles, copayments, or co-insurance. The plan costs, benefits, and rules vary by private health insurance plan.
Modified Adjusted Gross Income
Modified adjusted gross income, for the law's purposes, is defined as adjusted gross income increased by: (a) certain amounts excluded from gross income for income earned and expenses incurred while working in a foreign country, and (b) any amount of interest received or accrued by the taxpayer during the taxable year which is exempt from tax.
Plan year means the year that is designated as the plan year in the plan document of a group health plan. If the plan document does not designate a plan year, or if there is no plan document, the plan year is the deductible or limit year used under the plan. If the plan does not impose deductibles or limits on a yearly basis, then the plan year is the policy year. If the plan does not impose deductibles or limits on a yearly basis, and either the plan is not insured or the insurance policy is not renewed on an annual basis, then the plan year is the employer's taxable year. In any other case, the plan year is the calendar year. For purposes of PPACA implementation, Blue Cross Blue Shield of Massachusetts assumes the plan year is the policy year, unless an account notifies us otherwise.
The policy year in the individual health insurance market is the 12-month period designated in the policy documents of the individual health insurance coverage. If there is no designation of a policy year in the policy document (or no such policy document is available), then the policy year is the deductible or limit year used under the coverage. If deductibles or other limits are not imposed on a yearly basis, the policy year is the calendar year.
PPACA—Patient Protection and Affordable Care Act (or the Law)
The Patient Protection and Affordable Care Act (PPACA) is a federal statute that was signed into law in the United States by President Barack Obama on March 23, 2010.
Preexisting condition exclusion means a limitation or exclusion of benefit (including a denial of coverage) based on the fact that the condition was present before the effective date of coverage (or if coverage is denied, the date of the denial) under a group health plan or group or individual health insurance coverage, whether or not any medical advice, diagnosis, care, or treatment was recommended or received before that day.
Preventive Care (or Preventative Medicine)
Preventive care refers to measures taken to prevent diseases or injuries rather than treating the symptoms of disease or injury, or curing the disease or injury after it is present.
Reform Law (also the Law or PPACA)
The reform law is the federal statute that was signed into law in the United States by President Barack Obama on March 23, 2010. The law includes a large number of health-related provisions to take effect over the next four years, including: expanding Medicaid eligibility, subsidizing insurance premiums, providing incentives for businesses to provide health care benefits, prohibiting denial of coverage/claims based on preexisting conditions, establishing health insurance exchanges, and providing support for medical research.
SCHIP (or CHIP)—State Children's Health Insurance Program
SCHIP is a program administered by the United States Department of Health and Human Services (HHS) that provides matching funds to states for health insurance for families with children who have a modest income, but cannot qualify for Medicaid. Some states use private companies to administer SCHIP benefits to eligible beneficiaries.
A small employer is an employer who employed an average of at least one, but not more than 100, employees on business days during the preceding calendar year, and who employs at least one employee on the first day of the plan year. States have the option to treat companies with 50 employees as small employers in plan years beginning before January 1, 2016. Currently, a small employer is classified as a company with two to 50 employees.
This information is provided for informational purposes only and does not constitute legal advice. Please consult your legal counsel regarding your specific situation.
Please note that this content is only intended to describe national health care reform requirements under the Patient Protection and Affordable Care Act (PPACA). It does not address Massachusetts law requirements or the potential impact of Massachusetts law on federal PPACA requirements.
For purposes of PPACA implementation, Blue Cross Blue Shield of Massachusetts assumes the plan year is the policy year, unless an account notifies us otherwise.