Health insurance comes with its own language. Here's a quick-reference glossary for the terms you'll actually encounter.
- Premium
- The monthly fee you pay to have insurance coverage, whether or not you use any care.
- Deductible
- The amount you pay out of pocket each year before your insurance starts sharing costs.
- Copay
- A fixed fee you pay for a specific service (e.g., $30 for a doctor visit).
- Coinsurance
- Your percentage share of the cost after meeting your deductible (e.g., you pay 20%, insurance pays 80%).
- Out-of-Pocket Maximum
- The most you'll pay in a plan year. After this point, insurance covers 100% of covered services.
- Network
- The group of doctors and hospitals that have contracted with your insurer for discounted rates.
- In-Network
- Providers who have agreed to your insurer's contracted rates — your lower cost option.
- Out-of-Network
- Providers who haven't — higher costs, sometimes no coverage at all.
- EOB (Explanation of Benefits)
- A statement from your insurer showing what was billed, what was paid, and what you owe. Not a bill.
- Prior Authorization (PA)
- Pre-approval from your insurer required before certain treatments or medications are covered.
- Formulary
- Your plan's approved list of covered prescription drugs, organized by cost tiers.
- HMO
- Health Maintenance Organization — requires a primary care doctor and referrals for specialists. Lower cost, less flexibility.
- PPO
- Preferred Provider Organization — no referrals needed, can see out-of-network providers (at higher cost).
- HDHP
- High-Deductible Health Plan — higher deductible, lower premium, qualifies for HSA contributions.
- HSA
- Health Savings Account — pre-tax savings account for medical expenses, available with HDHP enrollment only.
- FSA
- Flexible Spending Account — pre-tax account for healthcare expenses, but use-it-or-lose-it annually.
- COBRA
- The right to continue your employer insurance after losing job-based coverage — at your own expense.
- Qualifying Life Event (QLE)
- A major life change that opens a special enrollment window outside of open enrollment.
- Open Enrollment
- The annual period when you can sign up for or change health insurance plans.
- Provider
- Any healthcare professional or facility — doctor, hospital, lab, specialist, therapist.
- Claim
- A request for payment that your provider submits to your insurance after you receive care.
- Balance Billing
- When an out-of-network provider bills you for the difference between their charge and what your insurer paid.
- Preventive Care
- Screenings, vaccines, and annual exams designed to prevent disease — covered at no cost on most plans.
- EAP
- Employee Assistance Program — employer-provided benefit often including free counseling sessions, financial advice, and more. Separate from health insurance.