This glossary breaks down the most common health insurance terms so you can feel more confident about your coverage and make informed decisions for yourself and your family.

1095-A Tax Form

Form 1095-A is a document you receive if you enrolled in a Marketplace health plan. It shows how much you paid in premiums and the amount of any Advance Premium Tax Credit you received. You’ll need it when you file your federal taxes.

8962 Form

Form 8962 is used to reconcile your Advance Premium Tax Credit when you file your federal tax return. It compares the tax credit you received during the year with the amount you were actually eligible for based on your final income.

Advance Premium Tax Credit

The Advanced Premium Tax Credit (APTC) is a subsidy that lowers your monthly health insurance premium. It’s based on your estimated income and household size and is applied upfront when you enroll in a Marketplace plan.

Affordable Care Act (ACA)

The Affordable Care Act is a federal law that expanded access to health insurance and created the Health Insurance Marketplace. It requires plans to cover essential health benefits, pre-existing conditions and preventive care at no additional cost.

Allowed Amount

The allowed amount is the maximum payment your insurance will cover for a healthcare service. If your provider charges more than this amount, you may be responsible for paying the difference. Staying in-network helps you avoid extra charges beyond the allowed amount.

Benefits

Benefits are the services and items covered by your health insurance plan. This can include things like doctor visits, prescriptions, mental health care, and preventive screenings. All Marketplace plans must include essential health benefits.

Broker

A broker is a licensed professional who helps you shop for and enroll in a health insurance plan. They can answer questions, compare options and guide you through the process, often at no cost to you.

Catastrophic Plan

A catastrophic plan is a low-cost, high-deductible health insurance option for people under 30 or those with a financial hardship exemption. It covers essential health benefits but is designed mostly for major emergencies, not routine care.

Claims

Claims are requests sent to your insurance company to pay for covered healthcare services. Your doctor or healthcare provider usually submits the claim after your visit, and your insurer determines how much they’ll pay and what you owe.

COBRA

COBRA is a federal law that lets you keep your employer-based health insurance after losing your job. You’ll pay the full cost of the plan, which can be expensive, but it allows you to keep the same doctors and coverage for a limited time.

Coinsurance

Coinsurance is your share of the costs for a covered service, calculated as a percentage. For example, if your plan pays 80%, you might pay 20%. Coinsurance usually applies after you’ve met your deductible.

Copayment (Copay)

A copayment is a fixed dollar amount you pay for certain services, like a doctor’s visit or a prescription. For example, you may pay $25 to see your primary care provider. Copays are typically due at the time of service.

Cost Sharing

Cost sharing refers to the portion of healthcare costs you pay, including copays, coinsurance and deductibles. Your insurance covers the rest. Marketplace plans often have cost-sharing limits to help protect you from very high medical bills.

Covered Service

A covered service is a healthcare service or time that your insurance plan agrees to pay for. This can include things like check-ups, lab tests or prescriptions, depending on your specific plan. You may still owe a copay or coinsurance for the services.

Deductible

Your deductible is the amount you must pay for covered services before your plan starts to pay. For example, if your deductible is $2,000, you'll pay the first $2,000 in medical bills. After that, your plan helps cover costs.

Dependent

A dependent is someone covered under your health insurance plan, like a child or a spouse. Many Marketplace plans allow you to include dependents in your coverage and adjust your premium accordingly.

Drug Tiers

Drug tiers are categories used by health insurance plans to group prescription medications based on cost. Lower-tier drugs (like Tier 1 generics) usually cost less, while higher-tier drugs (like Tier 3 or 4 brand-name or specialty drugs) typically have higher copays or coinsurance.

Durable Medical Equipment

Durable Medical Equipment (DME) is reusable medical equipment prescribed by a doctor for ongoing use. Common examples include wheelchairs, walkers or oxygen equipment. Most health plans cover DME when it’s considered medically necessary.

Emergency Care

Emergency care is medical treatment for serious or life-threatening conditions that require immediate attention. Health insurance plans are required to cover emergency care, even if you receive it at an out-of-network facility. However, emergency care is usually more extensive than urgent care, so it’s best to save it for true emergencies. Learn when to go to the ER here.

EPO

An Exclusive Provider Organization (EPO) is a type of health plan that covers care only if you use doctors and hospitals within its network (except in an emergency). EPOs generally have lower premiums but no coverage for out-of-network care.

Essential Health Benefits

Essential health benefits are 10 categories of services that all Marketplace plans must cover. These include things like preventive care, prescriptions, maternity care, emergency services and mental health care. Pediatric dental and vision care are also included.

Exchange

An Exchange, also called the Health Insurance Marketplace, is a platform where individuals and families can shop for, compare and enroll in health insurance plans. It’s operated by either the federal government or your state and offers plans that meet the Affordable Care Act Standards, many with financial assistance.

Excluded Services

Excluded services are healthcare services that your insurance plan does not cover. If you receive these services, you’ll typically have to pay the full cost yourself. Common examples include cosmetic procedures or services not deemed medically necessary.

Explanation of Benefits (EOB)

An Explanation of Benefits is a summary your insurance sends after you receive care. It shows what was billed, how much your plan paid and what you may owe. It’s not a bill, but it helps you understand your coverage.

Formulary

A formulary is your plan’s list of covered prescription drugs. Medications are grouped into tiers, which affect your copay or coinsurance. Check the formulary before choosing a plan to make sure your prescriptions are covered.

HMO (Health Maintenance Organization)

An HMO is a type of health insurance plan that requires you to use doctors and hospitals within its network for your care to be covered. You’ll usually need to select a primary care provider (PCP) and get referrals to see specialists. HMOs tend to have lower premiums and out-of-pocket costs, but less flexibility in choosing providers.

Health Savings Account (HSA)

An HSA is a tax-advantaged savings account you can use to pay for qualified medical expenses. It’s available to people enrolled in a high-deductible health plan. The money you contribute rolls over each year and can grow tax-free, making it a useful tool for managing out-of-pocket healthcare costs.

High-Deductible Health Plan (HDHP)

A high-deductible health plan has lower monthly premiums but higher deductibles than traditional plans. You’ll pay more out of pocket before your insurance starts covering care. These are HSA-eligible, making them a popular choice for those who want to save on premiums and use an HSA to manage expenses.

ICHRA (Individual Coverage Health Reimbursement Arrangement)

An ICHRA is an employer-funded arrangement that reimburses employees for health insurance premiums and certain medical expenses. Instead of offering a group plan, employers give employees tax-free money to buy their own health insurance, often through the Marketplace or a private insurer.

Marketplace Health Insurance

Marketplace health insurance refers to plans sold through the Health Insurance Marketplace, a government-run website where individuals and families can shop for coverage. These plans include essential health benefits and may offer financial help like premium tax credits or cost-sharing reductions based on your income.

Medicaid

If you have a low income, you may qualify for Medicaid. This is a free or low-cost program run by your state and the federal government. It covers doctor visits, hospital care, prescriptions and more. You can apply at any time of the year, and eligibility depends on your income and where you live. Learn more about Medicaid here.

Metal Levels

Marketplace health plans are grouped into four categories: Bronze, Silver, Gold and Platinum. These “metal levels” reflect how you and the plan share costs, not the quality of care. Bronze plans have lower monthly premiums but higher costs when you get care, while Platinum plans have higher premiums and lower out-of-pocket costs.

Network

A network is a group of doctors, specialists, hospitals and other healthcare providers that have agreed to work with your insurance plan. Using in-network providers usually means lower costs. Using in-network providers usually means lower costs. Going out of network may result in higher bills or no coverage at all, depending on your plan.

Out-of-Pocket Max

This is the most you’ll pay for covered services in a year. After you hit this limit, your plan pays 100% of eligible costs. The out-of-pocket max includes deductibles, copays and coinsurance, but not your monthly premiums.

Open Enrollment

Open Enrollment is the annual period when you can sign up for, renew or change your health insurance plan through the Marketplace. It typically runs from November 1 to January 15 in most states. Outside this window, you can only enroll if you qualify for a Special Enrollment Period.

POS (Point of Service)

A POS plan is a type of health insurance that combines features of HMO and PPO plans. You’ll choose a primary care provider and need referrals for specialists, like with an HMO. But you may also have the option to see out-of-network providers at a higher cost, similar to a PPO.

Pre-existing Condition

A pre-existing condition is a health issue you had before your new insurance coverage began, such as asthma, diabetes or cancer. Under the Affordable Care Act, Marketplace plans must cover pre-existing conditions and cannot charge you more or deny you coverage because of them.

Premium

A premium is the amount you pay each month to keep your insurance plan active. You must pay your premium, even if you don’t use your coverage, so your insurance stays in effect.

Premium Tax Credit

A premium tax credit is a subsidy that lowers your monthly premium cost. It’s based on your income and household size. Most Marketplace shoppers qualify for some form of financial help.

Preventive Care

Preventive care includes routine services like annual check-ups, vaccinations and cancer screenings. These services are covered at no cost on all Marketplace plans when you use in-network providers.

Primary Care Provider

A primary care provider (PCP) is the main doctor or healthcare professional you see for regular check-ups, health concerns and preventive care. Your PCP helps manage your overall health and coordinates care if you need to see a specialist.

Prior Authorization

Prior authorization is a requirement from your insurance company to approve certain services or procedures before you receive them. Without this approval, your insurance may not cover the cost, even if the service is medically necessary.

Provider

A provider is a licensed medical professional or facility that delivers healthcare services. This includes doctors, specialists, hospitals, clinics and labs that are part of your health insurance plan’s network.

PPO (Preferred Provider Organization)

A PPO is a type of health insurance plan that offers more flexibility when choosing providers and specialists. You don’t need a referral to see a specialist, and you can see out-of-network providers, though you’ll usually pay more for care outside the network.

Qualifying Life Event

A qualifying life event is a major change in your life that allows you to enroll in health insurance outside of Open Enrollment. Examples include losing job-based coverage, getting married, having a baby or moving to a new area. These events can make you eligible for a Special Enrollment Period.

Referral

A referral is a formal recommendation from your primary care provider to see a specialist or get a specific service. Some insurance plans, especially HMOs and POS plans, require referrals to ensure the service is covered.

Renewal

Renewal is the process of continuing your current health insurance plan for another year. You may renew automatically or be asked to update your information during Open Enrollment to ensure your coverage and savings remain accurate.

Special Enrollment Period (SEP)

A Special Enrollment Period is a window of time when you can enroll in or change health plans outside of Open Enrollment. Common reasons include losing job-based coverage, moving, getting married or having a baby. You usually have 60 days from the event to sign up.

Specialist

A specialist is a doctor who focuses on a specific area of medicine, such as cardiology, dermatology or orthopedics. You may need a referral from your primary care provider to see a specialist, depending on your health insurance plan.

Subsidies

Subsidies are financial assistance from the federal government that help lower the cost of health insurance through the Marketplace. These may include premium tax credits and cost-sharing reductions, based on your income and household size.

Summary of Benefits and Coverage (SBC)

An SBC is a document that explains what’s included in your health plan. It uses a standardized format to make it easier to compare plans. This document includes your deductible, copays, covered services and limits.

Telehealth

Telehealth is a way to receive healthcare services remotely using a phone, computer or tablet. Many health plans include telehealth visits for non-emergency issues like colds, mental health support or follow-up care, often at low or no cost.

Urgent Care

Urgent care centers provide quick treatment for non-life-threatening conditions like sprains, minor cuts or infections. They are usually more affordable and faster than the emergency room, and many are open after hours and on weekends.