Definitions and Glossary of Terms

COB

Coordination of benefits. A group health plan’s COB provisions apply when more than one plan covers a particular medical or dental expense. For detailed information regarding how coordination of benefits might affect you, please refer to the appropriate section in your plan document.

COBRA

The Consolidated Omnibus Budget Reconciliation Act of 1985 (PL 99-272). This statute required employers to offer the option of purchasing continuation coverage to qualified beneficiaries who would otherwise lose group health insurance coverage as the result of a qualifying event, such as termination of employment or divorce from an employee.

Coinsurance

A cost-sharing mechanism under which the member is required to pay a percentage (e.g. 20 percent) of medial expenses arising after the deductible has been satisfied; the plan pays the balance (e.g. 80%).

Copayment

A cost-sharing mechanism under which the member is required to pay a flat amount (e.g. $10.00 for an office visit or $10.00 for a prescription medication). Usually this benefit applies only when a preferred provider is utilized. The plan pays the balance (e.g. 100% of the preferred provider contract amount).

Deductible

A cost sharing method under which the member is required to assume part of the cost of health care (e.g. $250.00 deductible per person per calendar year) before direct payment or reimbursement is available from the plan.

EOB

Explanation of Benefits is provided to the member and provider of service whenever a claim is considered for payment or deductible.

PPO

Preferred provider organization; a network of medical or dental providers who provide services to employees for specified fee’s (usually at a lesser amount than normally charged). The covered employees are required or encouraged to go to those preferred providers when they need care, on the assumption that the preferred providers will charge less than other providers.

Self insurance

An employer’s practice of paying benefits out of its own assets or funds (without involvement of a commercial insurer) to pay benefits.