Employee Benefits Terms Glossary

Benefits terminology can sometimes be confusing. This glossary explains common terms you may see when reviewing or using your benefits.

A

AD&D (Accidental Death & Dismemberment)
Insurance that may provide a benefit if you die or experience certain serious injuries as the result of a covered accident.

Annual Enrollment / Open Enrollment
The time each year when employees can review and make changes to their benefit elections for the upcoming plan year.

B

Beneficiary
The person or persons you designate to receive benefits from certain plans, such as life insurance or a 401(k), in the event of your death.

C

Carrier
An insurance company or organization that administers a benefit plan, such as medical, dental, vision, or life insurance.

Claim
A request submitted to an insurance company or benefit administrator for payment or reimbursement of a covered service or expense.

Coinsurance
The percentage of the cost of a covered healthcare service that you are responsible for paying after meeting your deductible. For example, if your coinsurance is 20%, the plan generally pays 80% and you pay 20% of the allowed cost.

Copay (Copayment)
A fixed dollar amount you pay for certain covered healthcare services, such as a doctor’s visit or prescription.

COBRA
A federal law that may allow you and eligible family members to temporarily continue certain employer-sponsored healthcare coverage after it would otherwise end. You are generally responsible for paying the cost of COBRA coverage.

Covered Service
A healthcare service, treatment, prescription, or supply that is eligible for coverage under your benefit plan, subject to the plan’s rules and limitations.

D

DCFSA (Dependent Care Flexible Spending Account)
An account that allows you to set aside pre-tax money to help pay eligible dependent care expenses, such as qualifying childcare expenses.

Deductible
The amount you generally must pay for covered healthcare services before your insurance plan begins paying its share of certain expenses.

Dependent
An eligible family member who may be covered under your benefits, such as an eligible spouse or child, based on the plan’s eligibility rules.

E

EAP (Employee Assistance Program)
A confidential program that provides employees and eligible household members with resources and support for personal, emotional, financial, legal, family, and work-life concerns.

Effective Date
The date your benefit coverage begins.

Eligibility
The requirements that determine whether an employee or dependent can participate in a benefit plan.

Employee Contribution
The amount of money you contribute toward a benefit, such as your insurance premiums, HSA, FSA, or 401(k).

F

FSA (Flexible Spending Account)
A tax-advantaged account that allows you to set aside pre-tax money to pay eligible healthcare expenses during the plan year. FSA rules differ from HSA rules, so be sure to review your plan information.

Full-Time Employee (FT)
An employee classified as full-time under the employer’s eligibility rules. Benefit eligibility is based on your employment classification and the terms of the applicable benefit plan.

H

HSA (Health Savings Account)
A tax-advantaged account available to employees enrolled in an HSA-eligible health plan. HSA funds can be used for eligible healthcare expenses and generally remain yours even if you change employers or health plans.

Healthcare Premium
The amount you pay for your healthcare coverage. Your medical premium pays for participation in the medical plan and is separate from money you choose to contribute to an HSA or FSA.

I

In-Network Provider
A doctor, hospital, pharmacy, or other healthcare provider that has contracted with your insurance plan. Using in-network providers generally results in lower out-of-pocket costs.

L

Life Event / Qualifying Life Event (QLE)
Certain changes in your life that may allow you to make benefit changes outside of Open Enrollment. Examples may include marriage, birth or adoption of a child, divorce, death, or loss/change of other coverage. Documentation may be required.

Life Insurance
Insurance that provides a financial benefit to your designated beneficiary or beneficiaries if you die while covered under the policy.

LTD (Long-Term Disability)
Coverage designed to replace a portion of your income if an eligible illness or injury prevents you from working for an extended period, subject to the plan’s terms.

N

Network
The group of doctors, hospitals, pharmacies, and other healthcare providers that have agreements with your insurance plan.

Newly Eligible Employee
An employee who has recently become eligible to enroll in benefits because of a qualifying employment status or eligibility change.

O

Open Enrollment (OE)
The designated period each year when eligible employees can enroll in or make changes to benefits for the upcoming plan year.

Out-of-Network Provider
A healthcare provider that does not participate in your plan’s network. Services may cost more or may not be covered, depending on your plan.

Out-of-Pocket Cost
The portion of healthcare expenses you are responsible for paying, which may include deductibles, copays, and coinsurance.

Out-of-Pocket Maximum
The most you generally have to pay for covered, eligible healthcare services during a plan year before the plan begins paying 100% of covered eligible expenses for the remainder of that plan year. Plan rules and exclusions apply.

P

Part-Time Employee (PT)
An employee classified as part-time under the employer’s employment and benefit eligibility rules.

Plan Year
The 12-month period used to administer a benefit plan.

Premium
The amount paid for insurance coverage. Your portion of an employer-sponsored premium is generally deducted from your paycheck.

Prior Authorization (PA)
Approval that may be required from the insurance carrier or pharmacy benefit manager before certain medications, procedures, or services will be covered.

Preventive Care
Routine healthcare intended to help prevent or identify health conditions, such as certain annual exams, screenings, and vaccinations. Coverage depends on the terms of your medical plan.

Q

Qualifying Life Event (QLE)
A qualifying change in circumstances that may allow you to make certain benefit changes outside of Open Enrollment. Examples may include marriage, divorce, birth or adoption, death, or loss/change of other coverage.

S

Specialty Medication
A medication used to treat certain complex or chronic health conditions. Specialty medications may have additional requirements regarding pharmacies, prior authorization, or how the medication is administered.

STD (Short-Term Disability)
Coverage that replaces a portion of your income for a limited period if you are unable to work because of an eligible illness or injury, subject to the plan’s terms.

T

Termination of Coverage
The date your benefit coverage ends because of termination of employment, a change in eligibility, failure to pay required premiums, or another event defined by the plan.

V

Voluntary Benefits
Optional benefits employees can elect, generally through payroll deductions. Examples may include Accident, Critical Illness, and Hospital Indemnity insurance.

401(k)

401(k) Retirement Plan
An employer-sponsored retirement savings plan that allows eligible employees to contribute money from their paychecks toward retirement. Depending on the plan, the employer may also provide matching contributions.

Employer Match
Money an employer contributes to an eligible employee’s retirement or savings account based on the employee’s own contributions and the rules of the plan.

Vesting
The amount of time or other requirements that must be met before certain employer contributions to a retirement plan fully belong to the employee. Employee contributions are always 100% vested.