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HSA & FSA: Glossary of Key Terms

Common Health Care Terms

The following terms and definitions are for educational use only, and may vary from those used in your actual plan. For terms and definitions that are applicable to your specific plan, please refer to your plan documents.

TERM

DEFINITION

Benefits The healthcare items and services covered under your health insurance plan.
Claim A request for payment that you or your healthcare provider submits to your health insurer for services rendered.
Coinsurance A percentage of the cost associated with a covered healthcare service that you must pay (20%, for example) after you’ve paid your deductible.
Copay
A fixed amount ($20, for example) that you must pay for a covered healthcare service.
Deductible
The amount you pay out of pocket for covered healthcare services before your insurance plan starts to pay.
Dependent A child or other qualifying individual whom you support financially and claim as a dependent.
Flexible Spending Account (FSA) An account that lets you set aside pre-tax dollars to pay for out-of-pocket healthcare expenses. You determine how much of your pre-tax wages you would like taken out of your paycheck and placed in the account. Funds in the account must be used during the plan year.
Health Savings Account (HSA) An account that lets you set aside pre-tax dollars to pay for current and future out-of-pocket healthcare expenses. You determine how much of your pre-tax wages you would like taken out of your paycheck and placed in the account. Funds in the account roll over year to year and can be invested. You must be enrolled in a high-deductible health plan to be eligible for a health savings account.
High Deductible Health Plan (HDHP) A type of health plan with a higher deductible than a traditional insurance plan. The monthly premium is typically lower, but you are responsible for more healthcare costs initially (your deductible) before your insurance plan starts to pay. If you have a high-deductible health plan, you are eligible for a health savings account.
Lifetime Limit A cap on the total lifetime benefits you may receive from your insurance company.
Network The facilities, providers, and suppliers your health insurer has contracted with to provide healthcare services.
Open Enrollment Period The window of time you may enroll in or make changes to your health insurance plan and other benefit programs.
Out-of-Pocket Costs Healthcare expenses that are not covered by your insurance plan. Examples include deductibles, coinsurance, and copayments.
Out-of-Pocket Max The most you’ll have to pay out of pocket for covered services in a year.
Preferred Provider Organization (PPO) A type of health plan that contracts with medical providers, such as hospitals and doctors, to create a network of participating providers. You pay less if you use providers that belong to your insurance plan’s network.
Plan Year A 12-month period of benefits coverage.
Premium The amount you pay for health insurance each month.
Qualifying Life Event A change in your situation – such as getting married, having a baby, or losing health coverage – that allows you to enroll in health insurance and other benefit programs outside the annual open enrollment period.