Quick definitions for common benefits terms you’ll see during Open Enrollment and throughout the plan year.
Affordable Care Act and Patient Protection (ACA): Also called Health Care Reform, the ACA requires health plans to comply with certain requirements. The ACA became law in March 2010. Since then, the ACA has required changes such as covering dependent children to age 26, no lifetime limits on medical benefits, reduced FSA contributions, and covering preventive care without cost-sharing.
Brand Name Drug: The original manufacturer’s version of a particular drug. Because research and development costs are included in the price, brand name drugs cost more than generic drugs.
Coinsurance: A percentage of costs you pay out of pocket for covered expenses after you meet the deductible.
Copayment (Copay): A flat fee you pay out of pocket for certain services, such as a doctor’s office visit or a prescription drug.
Deductible: The amount you pay out of pocket before the health plan starts paying its share of covered expenses.
Generic Drug: A lower-cost alternative to a brand name drug that has the same active ingredients and works the same way.
High-Deductible Health Plan (HDHP): Health insurance plans with lower premiums and higher deductibles than traditional plans. Only those enrolled in an HDHP are eligible to open and contribute tax-free to a Health Savings Account (HSA).
Health Savings Account (HSA): A portable, tax-free savings account you own for health care expenses. You must be enrolled in an HDHP to open an HSA. Funds roll over from year to year, may earn interest, can be invested, and remain yours even if you leave the university.
Out-of-Pocket Maximum: The most you’ll pay each year out of pocket for covered expenses. After you reach this limit, the health plan pays 100% of covered expenses.
Plan Year: The year for which the benefits you choose during Open Enrollment remain in effect. If you’re a new employee, your benefits remain in effect for the remainder of the plan year in which you enroll, and you will enroll again for the upcoming plan year during the next Open Enrollment.
Preventive Care: Health care services you receive when you are not sick or injured, such as annual checkups, age-appropriate screenings, well-baby care, and immunizations recommended by the American Medical Association.
