Carrier
Your carrier administers the health care plan option you enroll in—which means they handle administration and claims, and have direct contact with your doctor when it comes to your coverage and health care benefits. When you have questions about your benefits, you may contact your carrier directly.

Coinsurance
The percentage of the total medical bill your plan pays after you meet the annual deductible. For example, if the coinsurance amount you choose is 90%, the plan will pay 90% of the eligible expenses, and you pay the remaining 10%.

Copayment
A fixed amount you pay at the time you receive health care. Typical copayments are for office visits and prescription drugs. (Also referred to as “copays.”)

Flexible Spending Account
Allows you to set aside money on a pre-tax basis to pay for health care expenses or dependent care expenses incurred by you and your eligible dependents.

Formulary
A list of non-preferred brand drugs and their preferred brand alternatives.

Generic
A lower-cost alternative to an equivalent brand-name drug. When a brand-name drug’s patent runs out, any company can make its “generic” equivalent as long as it can meet the same U.S. Food and Drug Administration (FDA) requirements for effectiveness and safety. Without the development cost, and with more competition, the price for a generic drug is much lower than for the brand name drug. Generic drugs have the same active ingredients of brand-name drugs, and they are subject to the same FDA standards.

In-network
An in-network provider is under contract to a carrier to provide services. In-network providers can include doctors, hospitals, optometrists, pharmacies, and other designated service providers.

Lifetime maximum
The total payable for covered medical services received while you are insured.

Non-duplication
If you and your dependents have coverage under another plan and you enroll in a Coventry plan, the Coventry plan will determine what benefits it would have paid if you did not have other coverage, and then deduct the amount paid by the other plan. If the other plan pays more than the Coventry plan would normally pay, then the Coventry plan will not pay any additional benefits. If the other plan pays less than the Coventry plan would pay, then the Coventry plan will pay the difference up to its normal benefit.

Non-preferred brand drug
A brand-name drug that is less cost-effective than a generic drug or therapeutically equivalent brand-name drug. Because of their high cost as well as the fact that less expensive brand formulary alternatives are available, you share more of the cost when you use these drugs.

Out-of-network
Doctors, hospitals, and other health care providers who have not, for whatever reasons, contracted with a carrier to provide services at prenegotiated rates to plan participants.

Out-of-pocket maximum
The limit you pay for your share of covered expenses in a year. Once you reach the annual out-of-pocket maximum, the plan pays 100% of any other covered expenses. Note: Paycheck contributions and copayments do not count toward your out-of-pocket maximum.

Plan year
Any health care plan in which you enroll has set plan year dates. Your health care coverage is based on a 12-month period from January 1 to December 31.

Plan year deductible
The amount you pay before the medical plan will begin to pay for approved medical services. The amount of your deductible depends on the medical option you choose. (Note: Copayments for office visits do not count toward your deductible.)

Preferred brand drug
A generic drug or a brand-name drug that is therapeutically equivalent and more cost-effective than another drug.

Reasonable and customary charges (R&C)
Also known as U&C (usual and customary).this is the typical charge for a medical or dental service in your area. Most plan carriers will not cover more than R&C charges. Expenses in excess of R&C do not count toward your annual out-of-pocket maximum.

First published September 13, 2007
Copyright © 2007 Caremark Inc.

Or Find More On:

Back to top of page