Health Insurance Glossary

The words on a quote or renewal letter, explained in plain English by a licensed broker, with real 2027 numbers where they matter.

• Advance Premium Tax Credit Reconciliation (Form 8962)

  APTC reconciliation is the tax-time process, using IRS Form 8962, that compares the subsidy you received in advance with the amount your actual income allowed.

• Balance Billing

  Balance billing is when a provider bills you for the difference between their full charge and the amount your health plan allowed and paid.

• Benchmark Silver Plan

  The benchmark silver plan is the second-lowest-cost silver plan available to you on the Marketplace, used to calculate your premium tax credit.

• Bronze Plan

  A bronze plan is the ACA metal tier that pays about 60% of typical covered costs, with lower premiums and higher deductibles than other tiers.

• Catastrophic Plan

  A catastrophic plan is a low-premium, very high-deductible ACA plan for people under 30 or with a hardship exemption, covering major medical events.

• COBRA

  COBRA is a federal law that lets you keep your former employer group health plan for a limited time after leaving a job, if you pay the full premium.

• Coinsurance

  Coinsurance is your percentage share of a covered medical bill after you meet the deductible, such as 20% while the plan pays 80%.

• Copay

  A copay, short for copayment, is a flat dollar amount you pay for a specific covered service, such as an office visit or a prescription fill.

• Cost-Sharing Reductions

  Cost-sharing reductions are extra savings on Marketplace silver plans that lower deductibles, copays and out-of-pocket maximums for households under a set income level.

• Deductible

  A deductible is the amount you pay each plan year for covered medical care before your insurance starts paying its share.

• EPO

  An EPO, or exclusive provider organization, is a plan that covers only in-network care except emergencies, but usually lets you see specialists without referrals.

• Essential Health Benefits

  Essential health benefits are ten categories of services that every ACA-compliant individual and small group plan must cover.

• Federal Poverty Level

  The federal poverty level is an income measure set each year by HHS that the Marketplace uses to determine eligibility for subsidies.

• Flexible Spending Account (FSA)

  A flexible spending account is an employer-sponsored account funded through payroll that you use for qualified medical expenses within the plan year.

• Formulary

  A formulary is the list of prescription drugs a health plan covers, usually grouped into tiers that determine what you pay.

• Gold Plan

  A gold plan is the ACA metal tier that pays about 80% of typical covered costs, trading a higher premium for lower deductibles and copays.

• Guaranteed Issue

  Guaranteed issue means an insurer must sell you a policy regardless of your health, age or medical history.

• Health Savings Account (HSA)

  A health savings account is a personal account you can fund alongside an HSA-eligible health plan and use for qualified medical expenses.

• High-Deductible Health Plan (HDHP)

  A high-deductible health plan is coverage with a larger deductible and lower premium that, when it meets IRS rules, lets you contribute to an HSA.

• HMO

  An HMO, or health maintenance organization, is a plan that covers care only within its network and usually requires a primary care doctor and referrals.

• ICHRA

  An ICHRA is an employer arrangement that reimburses employees for individual health insurance premiums and qualified medical costs, up to a set amount.

• Medical Underwriting

  Medical underwriting is the process an insurer uses to review your health history and decide whether to offer coverage and at what price.

• Metal Levels

  Metal levels are the bronze, silver, gold and platinum tiers that show how an ACA plan splits costs between you and the insurer.

• Modified Adjusted Gross Income (MAGI)

  Modified adjusted gross income is the income number the Marketplace uses to determine your premium tax credit and other savings.

• Open Enrollment

  Open enrollment is the yearly window when anyone can sign up for, change or renew an ACA health plan without needing a qualifying life event.

• Out-of-Network Care

  Out-of-network care is treatment from a doctor, hospital or facility that does not have a contract with your health plan.

• Out-of-Pocket Maximum

  The out-of-pocket maximum is the most you will pay for covered, in-network care in a plan year, after which the plan pays 100%.

• POS Plan

  A POS, or point-of-service, plan combines HMO-style referrals and a primary doctor with PPO-style coverage for some out-of-network care.

• PPO

  A PPO, or preferred provider organization, is a plan that covers in-network and out-of-network care, with no referrals needed to see specialists.

• Pre-Existing Condition

  A pre-existing condition is a health problem, such as diabetes, asthma or a past cancer, that you had before your new health coverage started.

• Premium

  A premium is the amount you pay, usually monthly, to keep your health insurance policy active, whether or not you use any care.

• Premium Tax Credit

  The premium tax credit is a federal subsidy that lowers what you pay for a Marketplace plan, based on your household income and size.

• Prior Authorization

  Prior authorization is approval your health plan must give before you receive certain services, procedures or prescriptions for them to be covered.

• Provider Network

  A provider network is the group of doctors, hospitals, labs and pharmacies that have agreed to accept your plan at negotiated rates.

• QSEHRA

  A QSEHRA is a reimbursement arrangement for employers with fewer than 50 full-time employees that helps workers pay for individual health coverage.

• Qualifying Life Event

  A qualifying life event is a major change, such as losing coverage, getting married or having a baby, that makes you eligible for a special enrollment period.

• Silver Plan

  A silver plan is the ACA metal tier that pays about 70% of typical covered costs and is the only tier that can include cost-sharing reductions.

• Special Enrollment Period

  A special enrollment period is a window, usually 60 days, to enroll in or change an ACA plan outside open enrollment after a qualifying life event.

• State Continuation Coverage

  State continuation coverage, often called mini-COBRA, is a state law that lets workers at smaller employers keep their group health plan after leaving.

• Subsidy Cliff

  The subsidy cliff is the point at 400% of the federal poverty level where Marketplace premium tax credits stop completely, rather than phasing out.