Attachment N – Definitions

MEPS-20(D)
(03-22-2022)

Medical Expenditure Panel Survey
Insurance Component

HEALTH INSURANCE COST STUDY
DEFINITIONS
ACTIVE EMPLOYEE – A person who was employed
full- or part-time in 2022 regardless of whether the
employee was considered permanent, temporary, or
seasonal. Include owners and officers of the organization.
Exclude individuals who were contract laborers, retirees,
laid off, or left employment prior to 2022.
ACTUARIAL VALUE – The average percentage of total
enrollee medical expenses for plan covered benefits paid
by the plan, rather than by enrollee cost sharing, for a
typical group of enrollees. A higher actuarial value means
the plan pays for a greater share of enrollees’ medical
expenses overall.
ASSOCIATION HEALTH PLAN (AHP) – A group
health plan that employer groups and associations offer to
provide health coverage for their employees or members.
CAFETERIA PLAN – See Flexible Benefits Plan.
COBRA – Consolidated Omnibus Budget Reconciliation
Act of 1985 (COBRA). Part of this law requires employers
to continue offering health coverage for enrollees and their
dependents for a period of time after an enrollee leaves
the firm. Typically, the enrollee pays the entire monthly
premium when covered by COBRA. COBRA coverage for
State and local governments was transmitted through the
Public Health Service Act and may also be referred to as
PHSA coverage or PHSA (COBRA) coverage.
COINSURANCE – A fixed percentage that an enrollee
pays for medical expenses after the deductible amount, if
any, was paid. Coinsurance rates may differ for different
types of services.
COPAYMENT – A fixed dollar amount that an enrollee
pays when medical service is received, regardless of the
total charge for service. The insurer is responsible for the
rest of the total charge.
CRITICAL ILLNESS INSURANCE – A special form of
insurance that pays the policyholder a lump-sum, tax-free
payment if they suffer from serious illnesses, including but
not limited to cancer, heart attack, kidney failure and
stroke.
DEDUCTIBLE – A fixed dollar amount during the benefit
period (usually a year) that an insured person pays before
the insurer starts to make payments for covered medical
services. For example, if the plan has a $1000 deductible,
the insured person would be responsible for the first $1000
of covered medical services. Plans may have individual,
employee-plus-one, and family deductibles.
DOMESTIC PARTNERS – Unmarried couples of the
same or opposite sex who live together and share a
common domestic life. People in a common-law marriage
should not be considered domestic partners.
EMPLOYEE-PLUS-ONE COVERAGE – Health
insurance coverage for an employee-plus-spouse or an
employee-plus-child.

U.S. DEPARTMENT OF COMMERCE
U.S. CENSUS BUREAU
ACTING AS COLLECTING AGENT FOR

U.S. DEPARTMENT OF
HEALTH AND HUMAN SERVICES
AGENCY FOR HEALTHCARE
RESEARCH AND QUALITY

EMPLOYEE PRE-TAX CONTRIBUTIONS TO
HEALTH INSURANCE – Also known as a Premium
Only Plan (POP), this is the most basic type of Section 125
Plan. An employee pays his/her share of the premium for
employer-sponsored health insurance through a payroll
deduction prior to taxes being withheld. This lowers the
amount of income on which the employee must pay taxes.
EXCLUSIVE PROVIDER ORGANIZATION (EPO)
PLAN – A restrictive type of preferred provider
organization plan under which enrollees must use providers
from the specified network of physicians and hospitals to
receive coverage except in an emergency situation.
FAMILY COVERAGE – A health plan that covers the
enrollee and members of his/her immediate family
(spouse and/or children). For purposes of this survey,
"family coverage" is any coverage other than single and
employee-plus-one (see definitions). Some plans offer
more than one rate for family coverage, depending on
family size and composition. If more than one rate is
offered, report costs for a family of four.
FLEXIBLE BENEFITS PLAN (Full Cafeteria Plan) –
A benefit program under Section 125 of the Internal
Revenue Code that offers employees a choice between
permissible taxable benefits which may include cash, and
nontaxable benefits such as life and health insurance,
vacations, retirement plans, and child care.
FLEXIBLE SPENDING ACCOUNT (FSA) – An
account offered and administered by employers that
provides a way for employees to set aside, out of their
paycheck, pre-tax dollars to pay for the employee’s share
of medical expenses not covered by the employer’s health
plan. In 2022, the maximum amount allowed in an
individual’s FSA is $2,850. Typically, benefits or cash must
be used within the given benefit year or the employee
loses the money.
FULL-TIME EQUIVALENT (FTE) – An FTE is the
number of working hours that represents one full-time
employee during a specific time period, such as a week.
GATEKEEPER – A gatekeeper is responsible for
coordinating (managing) all services, approving referrals
and directing patients to specialists or health care facilities.
GRANDFATHERED HEALTH PLANS – Plans that
existed before the Patient Protection and Affordable Care
Act (PPACA) was enacted. Plans certified to be
grandfathered plans are not subject to all of the PPACA
requirements.
HEALTH MAINTENANCE ORGANIZATION (HMO) –
A health care system in which plan participants obtain
comprehensive health care services from a specified list of
"in-network" providers who receive a fixed periodic
prepayment from the insurer. Plan participants’ access to
"in-network" providers is controlled by a primary-care
physician or gatekeeper. HMOs typically do not have a
deductible.

Continued on reverse

HEALTH SAVINGS ACCOUNT (HSA) – A trust
account owned by the employee for the purpose of paying
for medical expenses not covered by the employer’s health
plan. The employee must be enrolled in a high deductible
health plan that is HSA-eligible in order to qualify for an
HSA. The HSA funds may be carried over to the next
benefit year.

PREMIUM EQUIVALENT – For self-insured plans, this
is the cost per covered enrollee, or the amount the
organization would expect to pay in premiums if the plan
were insured by someone else. The premium equivalent is
equal to the per-capita amount of claims, administration,
and stop-loss premiums for a self-insured plan.

HEALTH REIMBURSEMENT ARRANGEMENT
(HRA) – An agreement where an employer funds a
predetermined amount of expenses to pay an employee
per benefit year for out-of-pocket medical costs, including
health insurance premiums. The HRA funds may be
carried over to the next benefit year. The HRA does not
have to be used in conjunction with any health plan.

PRIVATE EXCHANGE – An employer may choose to
contract with a private exchange to provide a set of health
insurance plans to be offered to its employees. Private
exchanges are Affordable Care Act (ACA) compliant but
are not the same as the Federal exchange or marketplace
(at healthcare.gov) or those run by individual states.

ICHRA – Individual Coverage Health Reimbursement
Arrangement is a new type of health reimbursement
arrangement (HRA) that allows businesses of all sizes to
provide tax-free reimbursement to employees for
individually purchased health insurance premiums (or other
medical care expenses) up to a maximum dollar amount
set by the employer each year. Employers can offer an
ICHRA and a traditional group health plan, but they have
to be offered to different classes of employees (e.g.
part-time versus full-time).
INDEMNITY PLAN – A type of medical plan that
reimburses the patient and/or provider as expenses are
incurred.
LONG-TERM INSURANCE – Insurance that helps
cover the cost of institutional and home care required by
the chronically ill or disabled.
MULTI-EMPLOYER HEALTH PLAN – An employee
health benefit plan maintained pursuant to a collective
bargaining agreement that includes employees of two or
more employers.
OPTIONAL COVERAGE (Single service plans) –
Separate coverage for a limited area of medical care to
supplement the basic health insurance plan. Often, these
plans are offered through an insurance company/carrier
separate from the one providing basic health coverage. An
additional premium is paid by the enrollee and/or employer
for this optional coverage. (Example: Dental or Vision Plan)

PURCHASED PLAN (Also called a fully-insured
plan) – A health plan is considered purchased when the
financial risk for the enrollee’s medical claims is assumed
by a health insurance company/carrier.
QSEHRA – Qualified Small Employer Health
Reimbursement Arrangement, also known as a Small
Business HRA, allows businesses with fewer than 50 FTE
employees to provide tax-free reimbursements up to a
maximum dollar amount to employees to help cover their
medical expenses including insurance premiums for plans
purchased on the individual market.
SELF-INSURED PLAN – A health plan is self-insured
when the financial risk for the enrollee’s medical claims is
assumed partially or entirely by the organization offering
the plan. Organizations with self-insured plans commonly
purchase stop-loss coverage (see definition).
SINGLE COVERAGE – A health plan that covers the
employee only.
SPECIALTY DRUGS – Prescription medications that
require special handling, administration or monitoring.
These drugs are used to treat complex, chronic and often
costly conditions, such as multiple sclerosis, rheumatoid
arthritis, hepatitis C, and hemophilia. Additionally, specialty
drugs include specifically identified types of drugs, such as
lifestyle drugs and biologics.

OUT-OF-NETWORK – Refers to a medical provider
(doctor, hospital, pharmacy) who is not a member of a
health plan’s network. Enrollees generally incur larger
costs for services from an out-of-network provider.

STOP-LOSS COVERAGE – A form of reinsurance for
organizations with self-insured health plans which limits
the amount the firm will have to pay for each enrollee’s
healthcare (the specific (individual) stop-loss coverage
amount) or for the total health expenses of the firm (the
aggregate stop-loss coverage amount).

PREFERRED ("IN-NETWORK"/PARTICIPATING)
PROVIDER – A medical provider (doctor, hospital,
pharmacy) who is a member of a health plan’s network.
Enrollees generally pay lower or no copayment for services
from a preferred provider.

TELEMEDICINE – Provision of healthcare services
through telecommunications to a patient from a provider
who is at a remote location, including video chat and
remote monitoring.

PREFERRED PROVIDER ORGANIZATION (PPO)
PLAN – A plan that provides coverage to participants
through a network of selected health care providers (such
as hospitals and physicians). The enrollees may go outside
of the network, but would incur larger costs in the form of
higher deductibles, higher coinsurance rates, or
non-discounted charges from the providers.

THIRD PARTY ADMINISTRATOR (TPA) /
ADMINISTRATIVE SERVICES ONLY (ASO) – An
individual or firm hired by an employer to handle claims
processing, pay providers, and manage other functions
related to the operation of a self-insured health plan.

PREMIUM – Agreed upon fees paid for coverage of
medical benefits for a defined benefit period. Premiums
can be paid by employers, unions, employees, or shared
by both the insured person and the plan sponsor.

MEPS-20(D)

TYPICAL PAY PERIOD – Any pay period during
calendar year 2022, in which employment was neither
unusually high nor unusually low.

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