Small Business Health Insurance Key Terms

Learn the language of small business health insurance

If you own a small business, one way to protect your employees and keep them satisfied is by offering them health insurance. Many insurance providers cater specifically to small businesses, offering federally regulated group plans at discounted rates. Choosing a plan for your employees can be tough, especially if you are unfamiliar with the terminology found on insurance applications and claims forms. To stay ahead of the game, you will want to learn small business health insurance key terms.

 

Pre-existing condition

Many group health insurance plans do not cover pre-existing medical conditions. While this may not affect healthy employees, it does affect new ones who previously diagnosed with a condition within the last six months.
Try: The Wisconsin Office of the Commissioner of Insurance maintains a website filled with information about health insurance terms and policies, including pre-existing conditions.

HSA

A health savings account, or HSA, is not a form of health insurance. Instead, it gives employees a tax-free way to save money for future medical expenses.
Try: For more information about HSAs, check out the glossary of health insurance terms on HSA For America.

Premium

As it applies to small business health insurance, a premium is the amount you must pay the health insurance company each period on behalf of your employees. Periods are usually one month long.
Try: EHealthInsurance outlines the basics of premiums on its small business insurance homepage.

COBRA

Short for the Consolidated Omnibus Budget Reconciliation Act, COBRA gives employees the right to continued health coverage between jobs. Some health insurance providers offer COBRA administration services, saving employers from having to keep track of the status for previous employees.
Try: You can learn more about COBRA from the U.S. Department of Labor.

FSA

Flexible spending accounts, or FSAs, act as a form of reimbursement for medical expenses for employees. An FSA is not an insurance-based program, but many employers include it in their health insurance packages.
Try: The Bureau of Labor Statistics has published an article on HSAs that covers both FSAs and health reimbursement arrangements (HRAs).

PPO

A preferred provider organization, or PPO, is a network of doctors and hospitals that work with insurance providers to lower medical expenses for their clients. Some small business plans give employees and their families access to PPOs, although many do not.
Try: The American Association of Preferred Provider Organizations has more info on PPOs.

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