DEFINITIONS OF HEALTH INSURANCE TERMS
In February 2002, the Federal Government’s Interdepartmental Committee on
Employment-based Health Insurance Surveys approved the following set of definitions
for use in Federal surveys collecting employer-based health insurance data. The BLS
National Compensation Survey currently uses these definitions in its data collection
procedures and publications. These definitions will be periodically reviewed and updated
by the Committee.
ASO (Administrative Services Only) – An arrangement in which an employer hires a
third party to deliver administrative services to the employer such as claims processing
and billing; the employer bears the risk for claims.
♦ This is common in self-insured health care plans.
Coinsurance - A form of medical cost sharing in a health insurance plan that requires an
insured person to pay a stated percentage of medical expenses after the deductible
amount, if any, was paid.
♦ Once any deductible amount and coinsurance are paid, the insurer is responsible
for the rest of the reimbursement for covered benefits up to allowed charges: the
individual could also be responsible for any charges in excess of what the insurer
determines to be “usual, customary and reasonable”.
♦ Coinsurance rates may differ if services are received from an approved provider
(i.e., a provider with whom the insurer has a contract or an agreement specifying
payment levels and other contract requirements) or if received by providers not
on the approved list.
In addition to overall coinsurance rates, rates may also differ for different types
Copayment - A form of medical cost sharing in a health insurance plan that requires an
insured person to pay a fixed dollar amount when a medical service is received. The
insurer is responsible for the rest of the reimbursement.
♦ There may be separate copayments for different services.
♦ Some plans require that a deductible first be met for some specific services
before a copayment applies.
Deductible - A fixed dollar amount duri