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Glossary of Terms

Use this alphabetical glossary to find quick definitions for terms you may be unfamiliar with.

 A-D

Claim
Information from a health care provider or member that says services were provided.
COBRA 
Short for Consolidated Omnibus Budget Reconciliation Act, a federal law under which employers with 20 or more employees must offer continuation of health care coverage to employees (and their dependents) when an employee leaves their job. The employee must pay the entire premium for coverage. Coverage can be extended for up to 18 months.
Coinsurance
The percent of covered health care costs that you pay after the plan deductible is met (not all plans have coinsurance).
Crossover
Automatic transfer of claims information from your health plan to SelectAccount so you can be quickly reimbursed from your HSA for eligible expenses.
Deductible
Amount you pay for health care services each year before your health plan pays. You can use money from your HSA during your plan deductible.

 E-H

Explanation of Payment (EOP)
Your EOP is available online at www.SelectAccount.com, explaining how a claim was processed. It may include provider, amount claimed, and payment made. In some situations, it may be mailed to the address on file.
Flexible spending account (FSA)
An account to set aside pre-tax dollars that you think you’ll spend for medical or dependent care expenses during the year. This can result in significant tax savings.
Grace period
A grace period gives you up to 75 additional days to incur expenses. A “run-out period” gives you more time to submit claims for reimbursement. This feature can be chosen by an employer for a company-sponsored FSA.
Health reimbursement arrangement (HRA)
An employer-guaranteed amount of money that you can use to pay some of your health care expenses.
Health savings account (HSA)
A tax-advantaged account that lets you pay current health care expenses or save for future expenses. You must be covered by a high- deductible health plan (HDHP) and not be covered under any other health plan. HSA contributions can be made by you, your employer or both.
High-deductible health plan (HDHP)
A plan that offers lower monthly premiums in exchange for a higher deductible (the amount you pay out of pocket before insurance kicks in) shifting more cost onto the individual.

 I-L

Limited purpose FSA or HRA
Limited to expenses for permitted benefits. These benefits include vision, dental or preventive care benefits.

 M-P

Out-of-pocket maximum
The most you can pay for covered health care services in a year (a worst-case scenario).
Post-deductible health FSA
Provides reimbursement for all Section 213(d) expenses only after the HDHP deductible has been satisfied. Typically, expenses like vision, dental and preventive care are payable out of the post-deductible FSA during the deductible phase.
Premium
The amount paid each month for your health care coverage. Often, you pay a portion of the total, which is deducted from your paycheck and your employer pays the rest.
Provider
A doctor, clinic or hospital. It can also mean other care facilities or professionals, such as physician assistants, chiropractors, psychologists and many others.

 Q-T

Roth IRA
Not a traditional IRA, but a special type of IRA that pays all taxes up front.
SECA
Self Employed Contributions Act – The business owner’s version of the FICA tax that employees pay. Like FICA, it is made up of your “contributions” to both the Social Security and Medicare programs. However, the basic tax rate for the self-employed under SECA is 15.30 percent — twice the 7.65 percent rate that employees must pay on their paychecks as FICA tax — to reflect the fact that employees pay one-half the FICA tax and employers pay the other half.
SEP IRA
A special type of IRA used as a Simplified Employee Pension Individual Retirement Account
Simple IRA
Not a traditional IRA, but a special type of employer provided IRA called Savings Incentive Match Plan for Employees
Suspended HRA
Refers to instances where the employee has chosen to discontinue reimbursements from the HRA except for preventive care and permitted benefits during the time period in which the employee is making contributions to an HSA. An employer may still “contribute” to a suspended HRA. Claims incurred during the time that the HRA was suspended cannot be paid at a later date when the HRA is no longer suspended, except claims for preventive care and permitted benefits.
Traditional IRA
A tax-deferred retirement account in which individuals can make deductible contributions that are subject to tax only upon withdrawal.

 U-Z

USERRA
Acronym for Uniformed Services Employment and Reemployment Rights Act. Established in 1994 to protect people who voluntarily or involuntarily leave their civilian jobs to perform military duties. USERRA requires that employers allow such individuals and their dependents to remain covered by the company- sponsored health plan for up to 24 months, if they choose. If the individual decides not to continue coverage, they can be reinstated in the plan without any waiting periods or exclusions when they return to their civilian job.
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