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Benefits Acronyms

Insurance documents are filled with acronyms. An acronym is a word formed from the initial letters of a name, such as the FMLA for Family and Medical Leave Act. An acronym may also be formed by combining initial letters or parts of a series of words. Acronyms are helpful in that they reduce the size of a document. However, you may have difficulty understanding the material if you do not know what they mean.

Below is a list of some of the most commonly used health insurance and employee benefit-related acronyms.

Benefits Acronyms Revealed:

ADA (Americans with Disabilities Act) - Guarantees equal opportunity for individuals with disabilities in public accommodations, employment, transportation, state and local government services, and telecommunications. The employment provision applies to job application procedures, hiring, advancement and discharge of employees, worker's compensation, job training, and other terms, conditions, and privileges of employment
ADEA (Age Discrimination in Employment Act) - Prohibits employment discrimination against persons 40 years of age or older
COBRA (Consolidated Omnibus Budget Reconciliation Act) - Gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods under certain circumstances such as voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death, divorce, and other life events. Qualified individuals may be required to pay the entire premium for coverage up to 102 percent of the cost to the plan
EOBs (Explanation of Benefits) - Provide necessary information about claim payment information and patient responsibility amounts
EOI (Evidence of Insurability) - You must provide evidence of good health. To be considered for coverage, you and any dependent applying for coverage must answer medical questions (which may include providing medical records and a physical exam). The information you provide on the EOI Application and any additional information requested and received is subject to review and approval by the insurer. Coverage will either be approved or denied based on the information provided
FAQs (Frequently Asked Questions) - List of questions commonly asked by individuals about a particular topic
FMLA (Family and Medical Leave Act) - Entitles eligible employees of covered employers to take unpaid, job-protected leave for specified family and medical reasons with continuation of group health insurance coverage under the same terms and conditions as if the employee had not taken leave. Eligible employees are entitled to 12 workweeks of leave in 12 months for certain events, including the birth of a child and to care for the newborn child within one year of birth, or twenty-six workweeks of leave during a single 12-month period to care for a covered service member with a serious injury or illness who is the spouse, son, daughter, parent, or next of kin to the employee (military caregiver leave)
HCE (Highly Compensated Employee) - Someone who owns more than a 5% interest in a business at any time during the year or someone, if in the preceding year, received compensation over a specified amount (compensation limit is adjusted annually). Also, an employer can choose to designate the top 20% of employees, when ranked by compensation, as highly compensated
HIPAA (Health Insurance Portability and Accountability Act) - Federal law that limits the ability of a new employer plan to exclude coverage for preexisting conditions; provides additional opportunities to enroll in a group health plan if you lose other coverage or experience certain life events; prohibits discrimination against employees and their dependent family members based on any health factors they may have, including prior medical conditions, previous claims experience, and genetic information; and guarantees that certain individuals will have access to, and can renew, individual health insurance policies
IRC (Internal Revenue Code or the Code) - The domestic portion of Federal statutory tax law in the United States. Various sections of the Code impact employee benefits; for example, Section 125
MHPAEA (Mental Health Parity (and Addiction Equity) Act) - Federal law that provides participants who already have benefits under mental health and substance use disorder coverage parity (similar) with benefits limitations under their medical/surgical coverage
NHCE (Non-Highly Compensated Employee) – Does not meet the definition of Highly Compensated Employee (HCE)
NMHPA (Newborns’ and Mothers’ Health Protection Act) - Affects the amount of time you and your newborn child are covered for a hospital stay following childbirth
PCE (Preexisting Condition Exclusion) - If you are applying for insurance, some health insurance companies may accept you conditionally by providing a pre-existing condition exclusion period. Although the health plan has accepted you and you are paying your monthly premiums, you may not have coverage for any care or services related to your pre-existing condition. Depending on the policy and your state’s insurance regulations, this exclusion period can range from six to 18 months
PDA (Pregnancy Discrimination Act) - Prohibits sex discrimination based on pregnancy
PHI (Protected Health Information) - Any information about health status, providing of health care, or payment for health care that can be linked to a specific individual
PPACA (Patient Protection and Affordable Care Act) - (also known as the Affordable Care Act or ACA – includes a long list of health-related provisions that began taking effect in 2010 and will continue to be rolled out for several years. Key provisions are intended to extend coverage to millions of uninsured Americans, to implement measures that will lower health care costs and improve system efficiency, and to eliminate industry practices that include rescission and denial of coverage due to pre-existing conditions
QDRO (Qualified Domestic Relations Order) - A legal order following a divorce or legal separation that splits and changes ownership of a retirement plan to give the divorced spouse their share of the asset or pension plan
QMCSO (Qualified Medical Child Support Order) - Medical child support order that creates or recognizes the right of an alternate recipient (e.g., child) to receive benefits for which a participant or beneficiary is eligible under a group health plan or assigns to an alternate recipient the right of a participant or beneficiary to receive benefits under a group health plan; and is recognized by the group health plan as “qualified” because it includes information and meets other requirements of the QMCSO provisions
SAR (Summary Annual Report) – Employers are required by law to file annual reports with the Internal Revenue Service and the U.S. Department of Labor on the status of their various employee benefit plans and to provide employees with a summary of those reports (the Summary Annual Report)
SMM (Summary of Material Modifications) - A plain language document that describes the plan amendment or change to the Summary Plan Description
SPD (Summary Plan Description) - Tell participants what the plan provides and how it operates. It provides information on when an employee can begin to participate in the plan, how service and benefits are calculated when benefits become vested, when and in what form benefits are paid, and how to file a claim for benefits
SSA - Social Security Administration
TPA (Third Party Administrator) - An organization that processes insurance claims and other features of employee benefit plans for an employer. Third-party administrators may also handle the administrative processing of retirement plans and flexible spending accounts
WHCRA (Women’s Health and Cancer Rights Act) - Provides that group health plans and health insurance issuers that provide coverage for medical and surgical benefits concerning mastectomies must also cover certain post-mastectomy benefits, including reconstructive surgery and the treatment of complications (such as lymphedema)