Health Insurance Agents and Brokers Key Terms

Learn the language of health insurance agents and brokers

When your business shops for new health insurance coverage, it may feel as though you and your health insurance agent or broker speak two different languages. You probably know the difference between a PPO and an HMO, but what's that clause in the contract about aggregate stop-loss coverage?

Most business owners know less about health insurance coverage than their health insurance agents and brokers. But learning some key terms about your company's health insurance coverage will help your business get the best health insurance coverage possible. Sure, hearing phrases like "Consolidated Omnibus Budget Reconciliation Act" and "group purchasing agreement" may make you feel stupid, but rest assured, you're not. No one knows these words unless they work in the health insurance industry, so your business will be ahead of the game by brushing up on terms like these.

 

Aggregate stop-loss coverage

Most insurance policies have limits on how much the insurer will pay. Once your benefits hit that limit your insurance won't cover any additional charges. Aggregate stop-loss coverage, if your business chooses to purchase such a policy, will kick in when your claims exceed the limit of your regular policy.
Try: Viehdorfer & Associates has a thorough explanation of aggregate stop-loss coverage and when it may be the best choice for your business.

Consolidated Omnibus Budget Reconciliation Act (COBRA)

The Consolidated Omnibus Budget Reconciliation Act, also called COBRA, makes it possible for employees leaving a job to continue their healthcare coverage. While COBRA is a law, not a type of insurance, many health insurance agents and brokers refer to COBRA as a sort of insurance because of what the act represents in terms of continuing insurance coverage.
Try: The United States Department of Labor goes into great detail explaining how COBRA works; encourage any employees leaving your company to check this website out as well.

Multiple employer trust (MET)

Many smaller businesses find the cost of providing group health insurance to their employees financially exhausting. One solution, a multiple employer trust, allows businesses to come together and negotiate a better rate on health insurance plans. These are also sometimes called group purchasing agreements.
Try: HealthInsurance.org explains how METs work.

Health reimbursement arrangement (HRA)

A health reimbursement arrangement, or HRA, is a fund set up by your business for employees to use for their own health care. At the end of the year, any money your employees don't use for health care goes back to your business.
Try: HSA for America explains how sole proprietors and corporations can use HRAs to their advantage.

High-deductible health plan (HDHP)

A high-deductible health plan (HDHP) usually costs significantly less but requires the insured to meet a much higher deductible (generally $1,000 or more) before the insurance company will pay a claim.
Try: Health Alliance Plan explains how HDHPs work.

Open enrollment

Once your employees select what sort of health insurance coverage they want, they have limited time to change that coverage, called open enrollment.
Try: MedPlan Access has a glossary of health insurance terms and explains how open enrollment works.

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