FICO Term Table

RE: UNDWRT

There are 4 general functions that are often combined in related terms:

1) Underwriting

2) Paying the Claims

3) Designing the benefit package that make up a “plan” – for which there is a policy, or a “program” for which a member must establish eligibility based on something besides sponsorship by a group or an employer, or the member’s ability to negotiate an insurance contract, e.g., age, financial or health status.

4) Administering such a plan or program independent of any of the above functions.

Distinguishing characteristics

To whom is this entity accountable? What is legal basis for fiduciary duty?

Government agencies

Lawmakers

Shareholders

Insurance Regulators

A self-insured employer and ERISA laws

A self-insured non-employer group or individual policyholder

Term / Definition / Source / Comment
Benefits / The portion of the costs of covered services paid by a health plan. For example, if the plan pays 80% of the reasonable and customary cost of covered services, that 80% payment is the "benefit." /
The amount payable by the insurance company to a claimant, assignee or beneficiary under each coverage. /
Benefit /

A payment made or an entitlement available in accordance with a wage agreement, an insurance policy, or a public assistance program.

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Beneficiary / The person or financial instrument (for example, a trust fund), named in the policy as the recipient of insurance money in the event of the policyholder's death. /
beneficiary
adj : having or arising from a benefice; "a beneficiary baron" n 1: the recipient of funds or other benefits [syn: donee] 2: the semantic role of the intended recipient who benefits from the happening denoted by the verb in the clause [syn: benefactive role]
benefactive role
n : the semantic role of the intended recipient who benefits from the happening denoted by the verb in the clause [syn: beneficiary] /
Co-insurance / A traditional method of paying for covered health services in which a portion of covered expenses are shared by the health plan and the covered individual. It's a defined percentage of the covered charges for services rendered. For instance, a health plan may pay 80% of the reasonable and customary cost of covered services, and the covered individual pays 20%. /
An insurance policyprovision under which the insurer and the insured share costs incurred after the deductible is met, according to a specific formula.
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Contract / In insurance, the agreement by which an insurer agrees, for a consideration, to provide benefits, reimburse losses or provide services for an insured. A "policy" is the written statement of the terms of the contract. /
Co-payment / The fee a patient pays at the time of service. Co-payments are predetermined fees for physician office visits and prescriptions. /
Cover / (1) A contract of insurance. (2) To effect insurance, that is, to "cover" an insured, for instance, for Automobile Insurance effective as of a given time. (3) To include within the coverage of a contract of insurance. For example, one could "cover" additional buildings under a Property Insurance contract. (G) /
Coverage / The scope of protection provided under a contract of insurance; any of several risks covered by a policy. /
The scope of protection providedunder an insurance policy. In property insurance, coverage lists perils insured against, properties covered, locations covered, individuals insured, and the limits of indemnification. In life insurance, living and death benefits are listed. /
The benefits that are provided according to the terms of a patient's specific health benefits plan. /
Synonym for insurance /
The scope of the protection provided under a contract of insurance. (G) /
The scope of protection provided under a contract of insurance; any of several risks covered by a policy. /
Covered / The scope of protection provided under a contract of insurance; any of several risks covered by a policy. /
Covered Party
participant / A person covered by a pension plan is one who has fulfilled the eligibility requirements in the plan, for whom benefits have accrued, or are accruing, or who is receiving benefits under the plan. /
Deductible / The money an individual or family must pay from their own funds toward covered medical expenses before the plan pays, usually based on a calendar year. For example, if a plan has a $100 deductible, the deductible is met once the first $100 of the covered medical expenses for that year have been paid by the individual. After that, the health plan begins to pay toward the cost of covered health care services at the plan's coinsurance level (see Coinsurance). /
The amount of loss paid by the policyholder. Either a specified dollar amount, a percentage of the claim amount, or a specified amount of time that must elapse before benefits are paid. The bigger the deductible, the lower the premium charged for the same coverage. /
The amount of a loss that an insurance policy holder has to pay out-of-pocket before reimbursement begins in accordance with the coinsurance rate. /
Dependent / A person eligible for coverage under an employee benefits plan because of that person's relationship to an employee. Married spouses, natural children and adopted children are often eligible for dependent coverage. /
/ X12 834 v. 4050 page 9
HMO / Health Maintenance Organization. An organization that arranges a wide spectrum of health care services which commonly include hospital care, physicians' services and many other kinds of health care services with an emphasis on preventive care. /
An organization that provides a wide range of comprehensive health care services for a specified group at a fixed periodic payment. The HMO can be sponsored by the government, medical schools, hospitals, employers, labor unions, consumer groups, insurance companies, and hospital-medical plans. /
Health Insurance / Insurance against financial losses resulting from sickness or accidental bodily injury. /
Protection which provide payment of benefits for covered sickness or injury. Included under this heading are various types of insurance such as accident insurance, disability income insurance, medical expense insurance, and accidental death and dismemberment insurance. /
Insurance providing for the payment of benefits as a result of sickness or injury. Includes various types of insurance such as accident insurance, disability income insurance, medical expense insurance, accidental death insurance, and dismemberment insurance. /
Health Plan / A term that has different meanings depending upon the context. "Health plan" can be used to refer to an HMO, a health benefits plan offered by an employer to its employees, or a health benefits plan offered to employers by an insurer or third party administrator. /
Insurance / A system under which individuals, businesses, and other organizations or entities, in exchange for payment of a sum of money (a premium), are guaranteed compensation for losses resulting from certain perils under specified conditions. /
Protection by written contract against the financial hazards (in whole or in part) of the happenings of specified fortuitous events. /
Risk management plan that, for a price, offers the insured an opportunity to share the costs of possible financial loss through an insurer /
A contract whereby a sum of money or some other benefit is payable upon the happening of an event which involves a degree of uncertainty, either as to the happening of the event or as to the date on which the event will occur. /
A system to make large financial losses more affordable by pooling the risks of many individuals and business entities and transferring them to an insurance company or other large group in return for a premium /
A formal social device for reducing risk by transferring the risks of several individual entities to an insurer. The insurer agrees, for a consideration, to assume, to a specified extent, the losses suffered by the insured. /
Insurance Carrier / See Insurer /
Insured / Member / / X12 834 v. 4050 page 9
Indemnify / Provide financial compensation for losses /
Indemnification / Compensation to the victim of a loss, in whole or in part, by payment, repair, or replacement. /

Security against damage, loss, or injury (insure is shown in Webster’s as a synonym) / Webster’s Dictionary
To make compensation for damage, loss, or injury. “Indemnity” / Webster’s Dictionary
Indemnity / Security against damage, loss, or injury / Webster’s Dictionary
A legal exemption from liability for damages; / Webster’s Dictionary
Compensation for damage, loss, or injury / Webster’s Dictionary
Benefits of a predetermined amount paid for a loss /
The legal principle which ensures that a policyholder is restored to the same financial position after the Loss as he was in immediately prior to the Loss. /
Legal principle that specifies an insured should not collect more than the actual cash value of a loss but should be restored to approximately the same financial position as existed before the loss. /
Insurance Company / An organization chartered to operate as an insurer /
Insured / A person or organization covered by an insurance policy, including the "named insured" and any other parties for whom protection is provided under the policy terms. /
The party to an insurance arrangement whom the insurer agrees to indemnify for losses, provide benefits for, or render services to. This term is preferred to such terms as policyholder, policy owner, and assured. See also Named Insured /
Insurer / The party to the insurance contract who promises to pay losses or benefits. Also, any corporation engaged primarily in the business of furnishing insurance to the public. /
The party to an insurance arrangement who undertakes to indemnify for losses, provide pecuniary benefits, or render services. It is desirable to use the word "insurer" in preference to "carrier" or "company" since it is a functional word applicable without ambiguity to all types of individuals or organizations performing the insurance function. The word insurer is generally used in statutory law. /
Managed Care / Arrangement between an employer or insurer and selected providers to provide comprehensive health care at a discount to members of the insured group and coordinate the financing and delivery of health care. Managed care uses medical protocols and procedures agreed on by the medical profession to be cost effective, also known as medical practice guidelines. /
Medicare / Title XVIII of the Social Security Act provides payment for health services to the eligible population aged 65 and over regardless of income, as well as certain disabled persons. /
The federal program providing hospital and medical insurance to people aged 65 or older and to certain ill or disabled persons. Benefits for nursing home and home health services are limited. /
Federal program for people 65 or older that pays part of the costs associated with hospitalization, surgery, doctors’ bills, home health care, and skilled-nursing care. /
Medicare Supplement Insurance / A private insurance policy that covers many of the gaps in Medicare coverage. /
Policies that supplement federal insurance benefits particularly for those covered under Medicare.
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Medicaid / A joint federal/state program that pays for health care services for those with low incomes or very high medical bills relative to income and assets. /
Medicaid as it was originally designed could be viewed as an open-ended voucher program (10). Patients were covered by the program for a defined set of services, for which they paid nothing or a nominal fee out of pocket. The program has evolved into one that covers a broad array of mental health services: from acute care in general hospitals, to physician and psychologist office visits, to case management services. The expansion of Medicaid to cover a full continuum of acute care and rehabilitative services has been the primary vehicle used by states to develop and finance community-based treatment programs for people with severe and persistent mental disorders.
A federal/state public assistance program created in 1965 and administered by the states for people whose income and resources are insufficient to pay for health care.
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MEWA / Multiple Employer Welfare Arrangements (MEWA's) An employee health plan established for the purpose of offering or providing any welfare benefits to employees of two or more unrelated employers. /
Network / A group of health care providers under contract with a managed care company within a specific geographic area /
Open Enrollment / A period when eligible persons can enroll in or switch to a new health benefits plan. /
Out-of-pocket / limit Maximum amount a patient needs to pay for covered services. The health insurance pays /
Payer / / X12 834 v 4050 page 8
Plan Administrator / / X12 834 v 4050 page 11
Policy
(insurance policy) / The printed legal document stating the terms of the insurance contract that is issued to the policyholder by the company /
A contract of insurance. /
The legal document issued by the company to the policyholder, which outlines the conditions and terms of the insurance; also called the policy contract or the contract /
The written contract effecting insurance, or the certificate thereof, by whatever name called, and including all clause, riders, endorsements, and papers attached thereto and made a part thereof. /
The written contract of insurance. /

A written contract for insurance between an insurance company and policyholder stating details of coverage. /
The printed legal document stating the terms of the insurance contract that is issued to the policyholder by the company. /
The printed legal document stating the terms of the insurance contract that is issued to the policyholder by the company. /
The legal document issued by the company to the policyholder, which outlines the conditions and terms of the insurance; also called the policy contract or the contract. /
The printed form which serves as the contract between an insurer and an insured /
Policyholder / The person who owns a life insurance policy. This is usually the insured person, but it may also be a relative of the insured, a partnership or a corporation. /

A person who pays a premium to an insurance company in exchange for the insurance protection provided by a policy of insurance. /

POS / Point-of-Service Plan. A health plan allowing the member to choose to receive a service from a participating or non-participating provider, with different benefits levels. /
Often known as open-ended HMOs or PPOs, these plans permit insureds to choose providers outside the plan yet are designed to encourage the use of network providers. /
PPO / Preferred Provider Organization Plan. A network-based, managed care plan that allows the participant to choose any health care provider. However, if care is received from a "preferred" (participating in-network) provider, there are generally higher benefit coverage and lower deductibles. /
Primary Care Physician (PCP) / A physician, usually a family or general practitioner, internist or pediatrician, who provides a broad range of routine medical services and refers patients to specialists, hospitals and other providers as necessary. Under some benefits plans, a referral by the primary care physician is required to obtain services from other providers. Each covered family member chooses his or her own PCP from the network's physicians. /
Sponsor / / X12 834 v 4050 page 8
Subscriber / / X12 834 v 4050 page 8
TPA / / X12 834 v 4050 page 8
Third-Party Administrators (TPAs)
Independent agencies, TPAs are often hired by larger businesses with self-funded employee health plans to administer benefits. /
Underwriter / The company employee who decides whether or not the company should assume a particular risk /

The agent who sells the policy. /

The individual trained in evaluating risks and determining rates and coverages for them. Also, an insurer. /
Underwriters are the professionals upon whose experience and judgement the market depends for its expertise and reputation. It is the Underwriter's responsibility to assess the merits of each Risk and decide a suitable Premium for accepting all or part of the Risk. /
Underwriting / The process of selecting risks for insurance and classifying them according to their degrees of insurability so that the appropriate rates may be assigned. The process also includes rejection of those risks that do not quality. /
The underwriting process evaluates the likelihood an insured event will occur, determines its likely cost and develops an appropriate premium for the coverage that is competitive in the marketplace and remunerative to the insurance company writing the policy. For some standardized coverage's that are highly competitive, underwriting may be somewhat besides the point -- the policy has to be priced according to marketplace pressures if the insurer wishes to remain in that line of coverage. Underwriting still plays a substantial role for many coverage's, however, even those in the increasingly competitive businesses of auto, home and term life insurance. Insurance companies don’t all target the same slice of the market in the same states, and thus often have different objectives in their underwriting efforts as well as different cost structures that determine operating profit margins in their underwriting calculations. Underwriting differences account in part for the substantial differences in insurance premiums for comparable coverage's. /
The process of selecting applicants for Insurance and classifying them according to their degrees of insurability so that the appropriate Premium rates may be charged. The process includes rejection of unacceptable Risks. /
Examining, accepting, or rejecting insurance risks and classifying the ones that are accepted, in order to charge appropriate premiums for them. /
The process of selecting risks for insurance and determining in what amounts and on what terms the insurance company will accept the risk. /
Workers Compensation Insurance / Coverage providing four types of benefits (medical care, death, disability, and rehabilitation) for employee job-related injuries or diseases as a matter of right (without regard to fault). / / This is not like classic insurance based on the way that premiums are calculated