RHU key terms

The tendency of people who expect to need medical care to buy or keep coverage more often than people who expect to stay healthy, which raises claims and premiums for the whole pool.

The combined group of people whose premiums fund the group's claims. A large, well-mixed pool makes total costs more predictable and keeps coverage stable.

Reviewing an applicant's health history, prescriptions, and lifestyle to estimate likely claims, then deciding whether to issue coverage, exclude a condition, or charge a higher rate.

A pricing method that charges everyone in a defined geographic area the same premium regardless of personal health, so healthy and sick members share the cost.

A pricing method that sets a group's premium mostly from that group's own past claims and use of care, so groups with heavier claims pay more.

The amount a member pays for covered services before the plan starts paying its share, usually reset at the start of each plan year.

The member's share of a covered expense after the deductible is met, expressed as a percentage such as 20 percent, with the plan paying the remainder.

The most a member pays during a plan year for covered in-network care. Once that amount is reached, the plan generally pays all covered costs.

The share of premium an insurer spends on claims and quality improvement, expressed as a percentage. Federal rules require minimum levels in many markets and order rebates when missed.

An individual disability contract that guarantees the insurer cannot cancel coverage, raise premiums, or reduce benefits while premiums are paid; it is the strongest renewability class.

A disability test that pays benefits when the insured cannot perform the material duties of their own specific occupation, even if they could work in another field.

A stricter disability test that pays only when the insured cannot perform the duties of any occupation for which they are reasonably suited by training, education, or experience.

The waiting period, counted in days of disability, that must pass before disability income benefits begin; shorter waiting periods cost more in premium.

A benefit that pays part of the monthly amount when the insured returns to work at reduced duties or earnings, usually in proportion to the income lost.

The employer or plan sponsor holds the master contract with the insurer, while each covered person receives a certificate summarizing coverage; the certificate is not the contract itself.

A group rule that coverage starts only when the employee is physically able to perform the job on the effective date, so someone absent for illness may be delayed.

An employee or dependent who signs up after the initial eligibility window without a qualifying event, and who may face a delayed effective date or reduced benefits.

Federal law that lets eligible employees and dependents keep group coverage for a limited time after a job loss or other qualifying event, paying the full premium themselves.

The right of a person leaving a group plan to buy an individual policy without proving insurability, usually within a set time and at higher individual rates.

A change such as marriage, birth, divorce, or losing other coverage that allows a person to enroll or change benefits outside the annual open enrollment window.

A managed care plan that generally limits coverage to a contracted provider network and coordinates care through a primary care physician who makes referrals.

A network-based plan that pays the most when members use contracted providers but still covers out-of-network care at a higher cost, usually without referrals.

A payment method that gives a provider a fixed amount per member per month no matter how many services the member uses, shifting financial risk to the provider.

The process of checking whether requested or delivered care is medically necessary and appropriate, done before, during, or after treatment to control unnecessary spending.

An outside firm that handles claims processing, enrollment, and benefit administration for a self-funded plan but does not take on the insurance risk.

Coverage bought by a self-funded plan that reimburses claims above a set amount per person or in total, shielding the employer from catastrophic costs.

A private plan option that delivers Medicare Part A and Part B benefits, often with drug coverage and extras, instead of original Medicare, usually through a provider network.

A private supplemental policy that helps pay original Medicare's deductibles, coinsurance, and other cost sharing; it cannot be used alongside a Medicare Advantage plan.

A joint federal-state program that pays for health care for low-income children, parents, older adults, and people with disabilities, with eligibility and benefits set by each state.

A person enrolled in both Medicare and Medicaid. Medicare pays first for most Medicare-covered services, and Medicaid helps with cost sharing and long-term services.

An online market run by the federal government or a state where individuals and small employers compare and buy ACA-compliant plans, some with income-based premium subsidies.

Ten broad categories of care, including hospitalization, prescriptions, maternity care, and mental health, that ACA individual and small-group plans must cover.

An employer plan that lets employees pay insurance premiums and certain out-of-pocket costs with pre-tax salary reductions, lowering income and payroll taxes.

A tax-favored account owned by the employee and paired with a qualifying high-deductible health plan; funds roll over and can pay medical expenses now or in retirement.

Products such as accident, critical illness, dental, and disability coverage offered at work through payroll deduction, usually paid by the employee and portable.

A federal law that sets minimum standards for private employer benefit plans, covering fiduciary duties, participant disclosure, and how benefit claims must be handled.

The legal obligation to act solely in the interest of plan participants or clients, with prudence and loyalty, rather than in one's own financial interest.

The standard that a recommended product or amount of coverage must fit the client's needs, income, and goals, based on information gathered and documented during the sale.

A situation in which a producer's financial or personal interest could improperly influence advice given to a client, requiring disclosure, avoidance, or other safeguards.