GLOSSARY OF HEALTH INSURANCE TERMS

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Self-Funding or Self-Funded Plan — An employer or organization assumes complete responsibility for health care losses of its covered employees. This usually includes setting up a fund against which claim payments are drawn and claims processing is often handled through an administrative services contract with an independent organization. In this case, the employer does not pay premiums to an insurance carrier, but, rather pays administrative costs to the insurance company or health plan, and, in essence, treats them as a third-party administrator (TPA) only.

Self-Insured Plan — a health, dental or vision plan in which the risk for cost is assumed by the company rather than an insurance company or managed care plan. In a sense, the employer is acting as an insurance company by paying claims with the money ordinarily earmarked for premiums.

Self-Referral — the process whereby a patient seeks care directly from a specialist without seeking authorization from the primary care physician.

Service Area — the area where a health plan accepts members. For plans that require enrollees to use certain doctors and hospitals, it is also the area where services are provided.

Skilled Care — a type of health care given when a patient needs skilled nursing or rehabilitation staff to manage, observe, and evaluate care. Generally refers to a level of care that is lower, or less intense, than inpatient hospital care.

Skilled Nursing Care — a level of care that includes services that can only be performed safely and correctly by a licensed nurse (either a registered nurse or a licensed practical nurse).

Skilled Nursing Facility (SNF) — a care setting for patients who no longer require hospital care, but need 24-hour nursing care and other health care services.

Stop Loss Insurance — insurance purchased by an insurance company or health plan from another insurance company to protect itself against losses. A type of insurance coverage that enables provider organizations or self-funded groups to place a dollar limit on their liability for paying claims and requires the insurer issuing the insurance to reimburse the insured organization for claims paid in excess of a specified yearly maximum.

Subrogation — the right of an employer or insurance company to recover benefits paid to a plan participant through legal suit, if the action causing the medical expense was the fault of another individual.

Summary Plan Description (SPD) — in self-funded plans, a written explanation of the eligibility for and benefits available to employees required by ERISA.

Supplemental Insurance — any private health insurance plan held by a Medicare beneficiary or commercial beneficiary, including Medigap policies and post-retirement health benefits. Supplemental insurance usually pays the deductible or co-pay and sometimes will pay the entire bill when the primary carrier's benefits are exhausted.

Surgeon — a physician who specializes in treating disease and illness by surgery.