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Health Care Acronyms Explained

Female doctor assists young patient after discussing key health care acronyms with her parents.

Whether you are picking out new health insurance or trying to understand your existing coverage, the terminology can be intimidating. An “acronym” is an abbreviation that uses the first letters of each word (for example, HSA is short for Health Savings Account) and there are a lot of them in the world of medical coverage. Here are some common health care acronyms and where you’ll encounter them. Find more detailed definitions at HealthCare.gov/glossary or contact your insurance provider.

At Work

Employer-based health insurance can be a great thing, especially if you get help paying monthly premiums or your workplace provides pretax savings accounts.

  • COBRA — The Consolidated Omnibus Budget Reconciliation Act is a law that lets you keep your health insurance for a period of time after leaving a job. However, if your employer had been chipping in half, you’ll have to cover 100 percent of the monthly cost once you leave your job. COBRA is a short-term patch in between jobs, not a permanent solution.
  • FMLA — The Family and Medical Leave Act says that your employer can’t fire you if you need to take time off when you have an illness, disability or family need that meets the FMLA requirements.
  • FSA vs. HSA — Both Flexible Spending Accounts and Health Savings Accounts let you contribute pretax money to accounts you can use on qualifying medical expenses. Check your specific plan to find out if you get to keep funds or if you lose them at the end of a calendar year.

Picking a Plan

There is a wide variety of plans out there. Know the basic differences in options.

  • ACA — The Affordable Care Act marketplace at HealthCare.gov is the best place to start if you have to buy your own insurance.
  • EPO, HMO, PPO — Exclusive Provider Organization, Health Maintenance Organization, Preferred Provider Organization — These are all types of coverage that encourage you to use in-network doctors, hospitals and medical facilities. Just make sure you can find providers that you like in their network.
  • HDHP — High Deductible Health Plans require you to pay more (a higher deductible) out of pocket before insurance kicks in, but the upside is that you’ll pay lower monthly premiums. Often these come with an HSA so that you can put some of the money you are saving on premiums away in pretax accounts to cover costs down the road.
  • HRA — Health Reimbursement Account. Some employers offer to reimburse medical expenses with an HRA instead of paying for traditional insurance. Find out what kind of records you need to provide in order to be reimbursed.
  • MEC — Minimum Essential Coverage is an insurance plan that meets the minimum requirements for coverage under the Affordable Care Act.

Using Insurance

When you’re ready to use your insurance for preventative check-ups or urgent care, understand these key terms.

  • PCP — Your Primary Care Physician is the main doctor who oversees all your medical care, including referring you to specialists.
  • QLE — A Qualifying Life Event is something that changes, such as marriage, birth, adoption or death that triggers a need to update your insurance coverage. Usually, you have to wait until an open-enrollment period to change your coverage, but a QLE is considered a special circumstance so you can change your coverage when needed.
  • SBC — The Summary of Benefits and Coverage helps you compare health insurance plans based on common criteria such as copays, deductibles and out-of-pocket maximums. Look at SBCs of different plans side by side to see which offers the better deal.

Investigate your insurance plan or else you might be leaving valuable benefits unused. For example, you won’t get any value out of a pretax account like an FSA or HSA if you don’t contribute to it. Even if it’s just a small amount each month, every pretax dollar you put away helps save money on certain medical items like contact lenses, prescriptions, and sometimes even alternative therapies like acupuncture.

Get to know the ABCs of health care acronyms to get the best coverage for you and your family. Ask your human resources department for details on how and when you can update your contributions to FSA, HSA or other pretax accounts.

[Any reference to a specific company, commercial product, process or service does not constitute or imply an endorsement or recommendation by the National Endowment for Financial Education.]

Ver este artículo en espanol: Explicación de las siglas relacionadas con los servicios médicos

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