Cafeteria Plan – A plan in which participants may choose among two or more benefits containing taxable or nontaxable compensation elements, i.e. cash or "qualified benefits." Participants may choose qualified benefits by electing not to receive taxable cash compensation or currently taxable benefits treated as cash.
Capitation – Financial arrangement between an employer and a health care provider in which the former pays a fixed, usually monthly amount for all services rendered to a beneficiary and the latter assumes risk for service costs in excess of those amounts.
Carrier – Typically either an insurer or a managed health care plan which may underwrite or administer a range of employee benefits.
Case Management – The process through which covered persons with specific health needs are identified and counseled to achieve the most appropriate levels of service utilization and optimum treatment outcomes.
Certified Financial Planner (CFP) – Professional who has attained a high degree of technical competency in financial planning and has passed a series of professional examinations by the College of Financial Planning.
Choice Plan – An employee choice plan is based on a standardized product offering available from many different carriers, all within one umbrella policy. Each employee can choose their own carrier and the employer receives on itemized bill. Some choice plans offer varying levels of coverage (HMO and PPO) within the plan, allowing employees to select their desired level of coverage and their desired carrier. Changes are permitted at the annual "Open Enrollment" period.
Claim – A request for payment of a loss which may come under the terms of an insurance contract.
COBRA – Consolidated Omnibus Budget Reconciliation Act. 1985 law that requires employers to offer continued health insurance coverage to terminated employees and their beneficiaries, restricted the definition of insured termination for purposes of the Pension Benefit Guaranty Corp. and raised the employer’s annual PBGC premium rate.
Coinsurance – That portion of a medical service cost borne by an insured beneficiary. Usually expressed as a percentage compared with the portion of costs paid by the insurer. A policy provision frequently found in medical insurance, by which the insured person and the insurer share the covered losses under a policy in a specified ratio, i.e., 80 percent by the insurer and 20 percent by the insured.
Collectively Bargained Plan – A plan with benefits provided as the result of good-faith negotiations between and employer or group of employers and employee representatives, primarily unions. Terms are usually spelled out in a "collective bargaining agreement."
Combined Ratio – Basically, a measure of the relationship between dollars spent for claims and expenses and premium dollars taken in; more specifically, the sum of the ratio of losses incurred to premiums earned and the ratio of commissions and expensed incurred to premiums written. A ratio above 100 means that for every premium dollar taken in, more than a dollar went for losses, expenses, and commissions.
Commercial Line Insurance – Insurance for businesses, organizations, institutions, governmental agencies, and other commercial establishments.
Commissioner – A state officer who administers the state’s insurance laws and regulations. In some states, this regulator is called the director or superintendent of insurance.
Common Stock – Securities that represent an ownership interest in a corporation.
Community Property – A special ownership form requiring that one half of all property earned by a husband or wife during marriage belongs to each. Community property laws do not generally apply to property acquired by gift, by will, or by descent.
Conditional Receipt – A receipt given for premium payments accompanying an application for insurance. If the application is approved as applied for, the coverage if effective as of the date of the prepayment or the date on which the last of the underwriting requirements, such as a medical examination, has been fulfilled.
Contributory – A group insurance plan issued to an employer under which both the employer and employee contribute to the cost of the plan. Seventy-five percent of the eligible employees must be insured. (See Noncontributory.)
Coordination of Benefits (COB) - Provisions designed to prevent double payments when an employee is covered by two health care plans.
Copayment – A predetermined (flat) fee an individual pays for health care services, in addition to what the insurance covers. For example, some HMOs require a $10 "copayment" for each office visit, regardless of the type or level of services provided during the visit. Copayments are not usually specified by percentages.
Cost Basis – An amount attributed to an asset for income tax purposes; used to determine gain or loss on sale or transfer; used to determine the value of a gift.
Cross Purchase Agreement – Specifies the terms for the surviving partners or shareholders to buy a deceased’s share of the business’s ownership.
Customary, Prevailing and Reasonable Payment System – Medicare’s method for approving provider charges for program Part B services. Payment is made for the lower of the physician’s actual charge, the physician’s customary charge and charges by peers in the same geographic area.