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Glossary

Adopted Child

A child who is adopted or placed for adoption, as defined by the state in which the adoption takes place.

Affiliation Period

A period of time that must pass before health insurance coverage provided by an HMO (Health Maintenance Organization) becomes effective.

If a group health plan provides coverage to you through an HMO with an affiliation period, the affiliation period cannot be longer than 2 months (3 months for a late enrollee) from your enrollment date, and the plan cannot impose a pre-existing condition exclusion. During the affiliation period, the plan cannot charge you premiums, and the HMO is not required to provide benefits.

The affiliation period must run concurrently with any waiting period for coverage under the plan.

Certificate of Creditable Coverage

A written certificate issued by a group health plan or health insurance issuer (including an HMO) that shows your prior health coverage (creditable coverage). A certificate must be issued automatically and free of charge when you lose coverage under a plan, when you are entitled to elect COBRA continuation coverage or when you lose COBRA continuation coverage. A certificate must also be provided free of charge upon request while you have health coverage or within 24 months after your coverage ends. For more information, see Questions and Answers: Recent Changes in Health Care Law.

COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985)

COBRA is a federal law that provides rights to temporary continuation of group health plan coverage for certain employees, retirees and family members at group rates when coverage is lost due to certain qualifying events.

COBRA Continuation Coverage

The temporary continuation of group health plan coverage available after a qualifying event to certain employees, retirees and family members who are qualified beneficiaries.

Those who are eligible may be required to pay for COBRA continuation coverage and are generally entitled to coverage for a limited period of time (from 18 months to 36 months), depending on certain circumstances.

Covered Employee

An individual who is (or was) provided coverage under a group health plan that is subject to COBRA because that individual was employed by one or more persons maintaining the group health plan.

Creditable Coverage

Health coverage you have had in the past, such as coverage under a group health plan (including COBRA continuation coverage), an HMO, an individual health insurance policy, Medicare or Medicaid, and this prior coverage was not interrupted by a significant break in coverage. The time period of this prior coverage must be applied toward any pre-existing condition exclusion imposed by a new health plan. Proof of your creditable coverage may be shown by a certificate of creditable coverage or by other documents showing you had health coverage, such as a health insurance ID card. For more information, see Questions and Answers: Recent Changes in Health Care Law.

Drug Formulary

A list of all the medicines that will be covered by your group health plan.

Elect

When referring to health coverage, this means to choose, generally in writing, to participate in a group health plan.

Election Notice

Written notification that you are eligible for COBRA continuation coverage. This notice should explain how long you will have to decide whether or not to elect COBRA continuation coverage. The group health plan must give you at least 60 days from the date the notice is provided to you, or from the date your coverage ended, whichever is later, to elect COBRA continuation coverage. The election notice should explain, among many other things, how much you must pay for coverage and when and to whom the payments are due.

Employee Organization

Any labor union or organization of any kind in which employees participate and which exists for the purpose of dealing with employers concerning an employee benefit plan (including group health plans) or other matters involving employment relationships. An employee organization can also be an employee beneficiary association.

ERISA (Employee Retirement Income Security Act of 1974)

ERISA is a federal law that regulates employee benefit plans, such as group health plans, that private sector employers, employee organizations (such as unions), or both, offer to employees and their families.

Enrollment Date

The first day of coverage or, if there is a waiting period, the first day of the waiting period. If you enroll when first eligible for coverage, your enrollment date is generally the first day of employment. If you enroll as a late enrollee, your enrollment date is the first day of coverage.

Exhausted COBRA Coverage

The end of your COBRA continuation coverage because the period of time that this coverage was available to you has lapsed, or for any reason other than your failure to pay premiums on time or for cause (such as making a fraudulent claim or an intentional misrepresentation of a material fact in connection with your plan). Additional reasons for exhaustion of COBRA coverage are possible besides the time being up. You have exhausted your COBRA continuation coverage if the coverage ends because your employer failed to pay the premiums on time or you no longer live or work in an HMO service area and there is no similar COBRA coverage available to you. You need not accept a conversion policy at the end of your COBRA coverage in order to exhaust your COBRA coverage.

Genetic Information

Information about genes, gene products and inherited characteristics that may derive from you or a family member. This includes information regarding carrier status and information derived from laboratory tests that identify mutations in specific genes or chromosomes, physical medical examinations, family histories and direct analysis of genes or chromosomes.

Gross Misconduct

The term "gross misconduct" is not specifically defined in COBRA or in regulations under COBRA. Therefore, whether a terminated employee has engaged in "gross misconduct" that will justify a plan in not offering COBRA to that former employee and his or her family members will depend on the specific facts and circumstances. Generally, it can be assumed that being fired for most ordinary reasons, such as excessive absences or generally poor performance, does not amount to "gross misconduct."

Group Health Plan

An employee benefit plan established or maintained by an employer or by an employee organization (such as a union), or both, that provides medical care to employees and their dependents directly or through insurance (including an HMO), reimbursement or otherwise.

HMO (Health Maintenance Organization)

Legal entity consisting of participating medical providers that provide or arrange for care to be furnished to a given population group for a fixed fee per person. HMOs are used as alternatives to traditional indemnity plans.

HIPAA (Health Insurance Portability and Accountability Act)

HIPAA is a federal law that limits pre-existing condition exclusions, permits special enrollment when certain life or work events occur, prohibits discrimination against employees and dependents based on their health status, and guarantees availability and renewability of health coverage to certain employees and individuals.

Late Enrollee

An individual who enrolls in a group health plan on a date other than either the earliest date on which coverage can begin under the plan terms or on a special enrollment date. Under HIPAA, a late enrollee may be subject to a maximum pre-existing condition exclusion of up to 18 months.

Mental Health Parity Act (MHPA)

MHPA is a federal law that requires annual or lifetime dollar limits on mental health benefits provided by a group health plan to be no lower than the annual or lifetime dollar limits for medical and surgical benefits offered by that plan. MHPA applies to employers with more than 50 employees.

NOTE: The Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) requires group health plans and health insurance issuers to ensure that financial requirements (such as co-pays, deductibles) and treatment limitations (such as visit limits) applicable to mental health or substance use disorder (MH/SUD) benefits are no more restrictive than the predominant requirements or limitations applied to substantially all medical/surgical benefits. For more information on MHPAEA, see the fact sheet.

Newborns' and Mothers' Health Protection Act (Newborns' Act)

The Newborns' Act is a federal law that prohibits group health plans and insurance companies (including HMOs) that cover hospitalization in connection with childbirth from restricting a mother's or newborn's benefits for such hospital stays to less than 48 hours following a vaginal delivery or 96 hours following delivery by cesarean section, unless the attending doctor, nurse midwife or other licensed health care provider, in consultation with the mother, discharges earlier.

Plan Administrator

The person who is responsible for the management of the plan. The plan administrator is a person specifically designated by the terms of the plan. If the plan does not make such a designation, then the plan sponsor is generally the plan administrator.

Plan Sponsor

Generally, the employer, the employee organization (such as a union), or both, that establishes or maintains an employee benefit plan, including a group health plan.

Pre-existing Condition

An illness or condition that was present before an individual's first day of coverage under a group health plan. For more information, see Questions and Answers: Recent Changes in Health Care Law.

Pre-existing Condition Exclusion

A limitation or exclusion of benefits for a condition based on the fact that you had the condition before your enrollment date in the group health plan. A pre-existing condition exclusion may be applied to your condition only if the condition is one for which medical advice, diagnosis, care or treatment was recommended or received within the 6 months before your enrollment date in the plan. A pre-existing condition exclusion cannot be applied to pregnancy (regardless of whether the woman had previous coverage), or to genetic information in the absence of a diagnosis. A pre-existing condition exclusion also cannot be applied to a newborn or a child who is adopted or placed for adoption if the child has health coverage within 30 days of birth, adoption or placement for adoption and does not later have a significant break in coverage. If a plan provides coverage to you through an HMO that has an affiliation period, the plan cannot apply a pre-existing condition exclusion. A pre-existing condition exclusion can not be longer than 12 months from your enrollment date (18 months for a late enrollee). A pre-existing condition exclusion that is applied to you must be reduced by the prior creditable coverage you have that was not interrupted by a significant break in coverage. You may show creditable coverage through a certificate of creditable coverage given to you by your prior plan or insurer (including an HMO) or by other proof. The plan can apply a pre-existing condition exclusion to you only if it has first given you written notice. If your plan has both a waiting period and a pre-existing condition exclusion, the exclusion begins when the waiting period begins. In some states, if plan coverage is provided through an insurance policy or HMO, you may have more protections with respect to pre-existing condition exclusions.

Pre-existing Condition Exclusion Period

The period of time that a group health plan can legally limit your access to the health benefits offered by that plan because of a pre-existing condition. Under HIPAA, the maximum pre-existing condition exclusion period that can be applied to an individual is 12 months (18 months for late enrollees).

Qualified Beneficiary

Generally, qualified beneficiaries include covered employees, their spouses and their dependent children who are covered under the group health plan on the day before the qualifying event. In certain cases, retired employees, their spouses and dependent children may be qualified beneficiaries. In addition, any child born to, or placed for adoption with, a covered employee during a period of COBRA continuation coverage is a qualified beneficiary.

Qualifying Event

Certain events that would ordinarily cause an individual to lose health coverage. The type of qualifying event will determine who the qualified beneficiaries for the qualifying event are and the length of time COBRA continuation coverage is available. For more information, see Questions and Answers: Recent Changes in Health Care Law.

Significant Break in Coverage

Generally, a significant break in coverage is a period of 63 consecutive days during which you have no creditable coverage. In some states, the period is longer if your plan coverage is provided through an insurance policy or HMO. Days in a waiting period during which you had no other health coverage cannot be counted toward determining a significant break in coverage. For more information, see Questions and Answers: Recent Changes in Health Care Law.

Similarly Situated Non-COBRA Beneficiaries

The group of covered employees, their spouses or dependent children who are covered under a group health plan maintained by the employer or employee organization. This group is receiving their benefits under the group plan and not through COBRA continuation coverage. They are most similarly situated to the circumstances of the qualified beneficiary immediately before the qualifying event.

SPD (Summary Plan Description)

An important document that the plan administrator must provide to participants and beneficiaries that explains what coverage the plan offers, how the plan operates and the rights and responsibilities of participants and beneficiaries. Each SPD is different. If you need a copy of the SPD, contact your plan administrator.

Special Enrollment

The opportunity to enroll in a group health plan when certain work or life events occur, regardless of the planís regular enrollment dates. Generally, if certain conditions are met, special enrollment is available when you, your spouse or your dependents lose other coverage (including exhaustion of COBRA continuation coverage), when you marry or when you have a new child by birth, adoption or placement for adoption. The plan must give you at least 30 days--from the loss of coverage or from the date of the marriage, birth, adoption or placement for adoption--to request special enrollment. The maximum pre-existing condition exclusion that may be applied to a person upon special enrollment is 12 months (reduced by the person's prior creditable coverage). However, if enrolled within 30 days of birth, adoption or placement for adoption, children may be exempt from any pre-existing condition exclusion. A description of a plan's special enrollment rules must be given to the employee on or before the time the employee is offered the opportunity to enroll in the plan. For more information, see Questions and Answers: Recent Changes in Health Care Law

Waiting Period

The period that must pass before an employee or dependent is eligible to enroll (becomes covered) under the terms of the group health plan. If the employee or dependent enrolls as a late enrollee or on a special enrollment date, any period before the late or special enrollment is not a waiting period. If a plan has a waiting period and a pre-existing condition exclusion, the pre-existing condition exclusion period begins when the waiting period begins. Days in a waiting period are not counted toward creditable coverage unless there is other creditable coverage during that time. You should try to maintain creditable coverage during a waiting period to reduce any pre-existing condition exclusion that may apply. Days in a waiting period are also not counted when determining a significant break in coverage.

Women's Health and Cancer Rights Act (WHCRA)

WHCRA is a federal law that provides important protections for individuals who have undergone a mastectomy. For more information, see Your Rights After a Mastectomy: The Women's Health and Cancer Rights Act.