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Insurance Term |
Definition |
Pre-Legislation |
Legislation Impact |
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Benefit
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The amount of money payable by a health plan for the cost of covered services, as defined in the insured Certificate of Coverage and benefit plan description. |
Behavioral Health (BH), Substance Abuse (SA) and Medical are all considered individual benefits; benefit plans describe what is covered and excluded under each. Could be subject to different coverage provisions, limits and medical management requirements. |
Unless insured and/or state mandated, employers/insurers can elect to exclude coverage. If covered, it must be offered at parity. |
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Co-insurance (percentage)
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A specific payment by the covered person at the point of each health service visit (20% after deductible). It applies after the deductible has been satisfied and does apply to out-of-pocket maximum. |
Members with BH/SA/Medical could have a different co-insurance percentage or co-pay payment that financially was not equal to or better than Medical. |
The BH/SA coinsurance percentage or co-pay payment for members with BH/SA/Medical coverage must be financially equal to or better than Medical. |
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Co-payment/ co-pay (fixed dollar amount)
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A specific payment by the covered person at the point of each health service visit. Generally does not accumulate in order to meet the deductible and is generally not subject to an out-of-pocket maximum. |
Could vary by BH/SA and Medical. Also, where plans offered a different co-pay for the PCP and specialist, the BH co-pay would generally be at the specialist level. Unlike medical, visits for BH were often limited. |
Same co-pay and must be at PCP level with no visit limits. |
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Deductible
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The amount of out-of-pocket expenses that must be paid for health services by the covered person before the health plan benefit payment begins. This is usually based on a calendar year. |
Members with BH/SA/Medical could be required to meet one deductible for BH/SA and a separate one for Medical. |
If the plan offers Medical, BH & SA, any deductible must include medical and BH/SA services. |
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Drug Formulary
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A listing of prescription medications which are approved for use and/or coverage by a Health Plan and which will be dispensed through participating pharmacies to a covered person. The list is subject to periodic review and modification by the Health Plan. |
May be differences in cost to individuals associated with BH/SA coverage based on criteria non-applicable to Medical. |
Any formulary/non-formulary arrangements must be in accordance with the requirements for non-quantitative treatment limitations, and without regard to whether a drug is generally prescribed for med/surg benefits or mental health/substance use disorder benefits. |
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Insurance Plan Year Start Date |
References the month in which benefits (including changes) are effective. Most are January but can begin in any month. |
N/A |
Effects when plans are required to comply with Wellstone Act and Interim Final Regulations (IFR) issued on 02/02/10. |
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In-Network |
Refers to the use of providers who participate in the health plan's provider network. Generally, there will be a 20% differential in payment between in and out of network benefits. |
Plans could offer both in- and out-of-network benefits for medical but limit BH/SA coverage to in- network only. |
If out-of-network coverage is offered to medical, it must be offered to BH/SA and be financially equal to or better than Medical. |
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Lifetime Benefit |
The total amount of medical dollars per insured that the insurance company would pay for covered expenses. A lifetime benefit of $1,000,000 means the insurance company will pay their portion of all medical expenses for the life of the policy up to $1,000,000. |
No difference. |
Same |
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Medically Necessary
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Those covered services required to preserve and maintain the health status of a covered person in accordance with the accepted standards of medical practice in the medical community in the area where services are rendered. In other words, services or treatments are considered medically necessary and appropriate if they could not have been omitted without adversely affecting the patient's condition or the quality of medical care. |
Criteria set by individual health plans. |
Criteria must be consistent with “generally recognized independent standards of current medical practice,” such as DSM, state guidelines and other applicable sources. |
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Non-quantitative Treatment Limitations |
Not expressed numerically, but otherwise limits the scope or duration of benefits. An illustrative list of non-quantitative treatment limitations includes the following:
1. Medical management standards :
a. pre-authorization
b. concurrent review
c. retrospective review
d. case management
e. utilization review
2. Prescription drug formulary design
3. Standards for provider admission to participate in a network
4. Determination of usual, customary and reasonable amounts
5. Requirements for using lower cost therapies before the plan will cover more expensive therapies (also known as “fail-first policies” or “step therapy” protocols
6. Conditioning benefits on completion of a course of treatment |
Criteria set by individual health plans. |
Parity for medical management is to be based on:
1. Comparable processes, standards and evidentiary information
2. Determining what conditions/services are subject to UM practices*
3. In the same benefit classification
4. Application is not more stringent than medical management
*Excludes typical disease management, high-risk case management, and dis-charge planning assistance as long as activity does not limit scope of duration of benefits. |
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Out-of-Pocket Maximum |
The amount which a covered person must pay for deductibles, co-insurance and co-pays in a defined time period (generally a calendar year) before the health plan covers all remaining medical services at 100%. |
May have been separate or at a different level for BH/SA and Medical. |
If the plan offers Medical, BH, & SA, any co-insurance maximum must include Medical and BH/SA services. |
