• Common Terms to Help You Understand Your Benefits

    Allowed Charges
    The amount our network providers have agreed to accept as full payment for covered healthcare services and supplies.
    Average Wholesale Price
    Commonly referred to as AWP. The standardized cost of a pharmaceutical charged to a pharmacy provider by a large group of pharmaceutical wholesale suppliers.
    Benefits Booklet
    Brochure provided to members that gives a complete explanation of benefits and related provisions.
    Brand-Name Prescription Drug
    A patented prescription drug that is produced by a single manufacturer.
    Calendar Year Deductible
    The period of time from January 1 of any year through December 31 of the same year, inclusive. Used often in connection to deductible amount provisions in major medical plans.
    Your share of the costs after you pay your deductible (i.e., if your plan pays 85 percent, you must pay the remaining 15 percent.
    A set fee you pay when you visit the doctor or emergency room or get a prescription filled.
    Cost Sharing
    A general set of financing arrangements via deductibles, copays and/or co-insurance in which a member of a health plan must pay some of the costs to receive care. Also see Copay, Coinsurance and Deductible.
    The type of benefits provided through a healthcare contract. There are various benefit levels, such as basic or major medical.
    Covered Services
    Medically necessary medical and hospital services, supplies and accommodations for which a member is eligible under the terms of the applicable Policyholder Agreement.
    The amount you spend each year before your benefit plan begins paying part of the cost for services.
    An individual who relies on a member for support or obtains health coverage through a spouse, parent or grandparent who is a member.
    Direct-to-Consumer Advertising
    Advertising of drugs or medical services directly to a consumer, such as prescription drug ads on TV or in a magazine.
    Eligibility Date
    The defined date a member becomes eligible for benefits under an existing contract.
    Eligible Expenses
    Type and amount of expenses that qualify for benefits on your health plan.
    Specific circumstances or conditions listed in the contract or employee benefit plan for which the policy or plan will not provide benefit payments.
    Exclusion Period
    Enrollment timeframe when certain conditions are limited or excluded from your coverage. Often referred to as a waiting period.
    Explanation of Benefits (EOB)
    The statement sent to members by their health plan that lists services provided, amounts billed and payments.
    Family Deductible
    A deductible satisfied by combined expenses of all covered family members.
    Family Stop Loss
    The maximum out-of-pocket payment made by all covered family members during the benefit period. This helps protect a family from catastrophic healthcare expenses.
    First-Dollar Coverage
    Covered benefits that are not subject to a deductible.
    Flexible Spending Accounts (FSA)
    An FSA is a tax-advantaged, employer-owned healthcare spending account that members can use to pay for eligible expenses. We offer two types, a health FSA and a dependent care FSA. FSAs can be paired with many of our health plans.
    Food and Drug Administration
    A U.S. federal agency responsible for ensuring that foods are safe, wholesome and sanitary; that human and veterinary drugs, biological products, and medical devices are safe and effective; cosmetics are safe; and electronic products that emit radiation are safe. The FDA also ensures that these products are represented to the public accurately, honestly and informatively.
    A listing of drugs, classified by therapeutic category or disease class, that are considered preferred therapy for a given managed population and that are to be used by a health plan’s providers in prescribing medications. A formulary is also sometimes called a Preferred Drug List.
    Generic Drug
    A chemically equivalent copy of a brand name drug for which the patent has expired. A generic is typically less expensive and sold under a common or “generic” name for that drug (e.g., Valium is the brand name for a tranquilizer, which is also available under its generic name of Diazepam).
    The process where current members are allowed to keep their existing benefits, while new policies apply to new members.
    Health Insurance Portability & Accountability Act (HIPAA)
    Commonly referred to as HIPAA. A federal law that outlines the requirements that employer-sponsored group insurance plans, insurance companies and managed-care organizations must satisfy to provide health insurance coverage in the individual and group healthcare markets.
    Health Reimbursement Account (HRA)
    An HRA is an employer-sponsored and funded healthcare funding arrangement that members can use to help pay for coinsurance, deductibles and other qualified medical expenses. Because we administer the HRA, our integrated claims processing ensures that funds are automatically applied to qualified medical expenses and paid at the time of the claim, so there’s no need for employees to fill out forms or wait for reimbursement checks. We pay all HRA-eligible expenses on behalf of the employer at the time claims are processed. Employers then reimburse us via convenient electronic funds transfer.
    Health Savings Account (HSA)
    A HSA is an employee-owned account that works in combination with a qualified, high-deductible health plan that allows employees to save for future medical costs through tax-advantaged contributions. Each year, total contributions to a HSA (by the employer, the employee, or anyone else on behalf of the employee) may not exceed the amount of the plan deductible or the annual limit set by the IRS, whichever is less. In addition, if offered by the fund administrator, funds in a HSA may be invested by members in money market accounts, mutual funds, and other financial options.
    Home Health Agency
    A facility or program licensed, certified or otherwise authorized pursuant to state and federal laws to provide healthcare services in the home.
    A facility or program engaged in providing palliative and supportive care of the terminally ill. They are licensed, certified or otherwise authorized pursuant to the law of jurisdiction in which services are received.
    ID Number
    The number appearing on the member’s ID card identifying the plan and the member. This number must be used on all claims and inquiries.
    Mail-order Drugs
    Programs that offer drugs ordered and delivered through the mail to plan members at a reduced cost.
    Medically Necessary
    The evaluation of healthcare services to determine if they are: medically appropriate and necessary to meet basic health needs; consistent with the diagnosis or condition and rendered in a cost-effective manner; and consistent with medical practice guidelines regarding type, frequency and duration of treatment.
    Participants in a health plan (policyholder/enrollee and/or eligible dependent) who make up the plan’s enrollment and are eligible to receive covered benefits.
    Network Pharmacy
    A pharmacy LifeWise has contracted with to provide pharmacy services for its members.
    Medications that are not on the preferred drug list, often because they are not as clinically effective or as reasonably priced as other medications.
    Those physicians or other providers who are “out-of-network” because they have not signed a contract with the plan and/or they are out of the plan’s service area. Members receive the highest level of benefits when they receive care “in-network.”
    Out-of-Pocket Limit
    The total payments toward eligible expenses that a member funds for him/herself and/or dependents (e.g., deductibles, copays and coinsurance). Once this limit is reached, benefits will usually increase to 100 percent for health services received during the rest of that calendar year. Some out-of-pocket costs (i.e., cosmetic surgery) are not eligible for out-of-pocket limits.
    Out-of-Pocket Maximum
    The maximum amount you pay for deductibles and coinsurance in a designated time period.
    Over-the-Counter Drug
    Commonly called OTC. A retail drug product that does not require a prescription under federal or state law.
    Pharmacy Benefit Manager
    A type of managed care specialty service organization that seeks to contain the costs of prescription drugs or pharmaceuticals while promoting more efficient and safer drug use. Also known as a prescription benefit management program.
    A healthcare option that allows members to choose at the time medical services are needed whether they will go to a provider within the plan’s network or seek medical care outside the network.
    Preferred Drug List
    A list (also called a formulary) of approved prescription medications dispensed to members through participating pharmacies. Your plan may have an “open or voluntary” formulary that allows coverage for both formulary (preferred) and non-formulary (non-preferred) medications. Or, your plan may have a “closed, select or mandatory” formulary that limits coverage to formulary drugs.
    Prior Authorization Program
    The Prior Authorization Program applies to members who try to fill a prescription that is on our prior authorization drug list. If that prescription does not fall within the guidelines set for that drug, the retail pharmacist can do a one-time override so that the member can receive their prescription that day. A letter of explanation and fax-back form are also mailed to the member at this time.
    Single-Source Drug
    A drug that is patented and produced by a single manufacturer.