Glossary
North Carolina health insurance – and insurance everywhere, for that matter – is fraught with acronyms, confusing terms, and complicated concepts. This page is intended to help bring a little clarity by defining a number of the terms and abbreviations that you’ll find on this and other insurance websites.
General Insurance Terms
Premium: The cost of coverage. Typically calculated as an annual amount and paid monthly.
Deductible: Total charges the policy-holder is 100% responsible for before the insurer begins paying benefits.
Co-pay: Total amount policy-holder pays for each medical service or prescription supplied. Applied in lieu of a deductible. For example, a plan with a $10 co-pay for doctor's visits means that the policy-holder pays $10, and the insurer pays the balance, regardless of the total charge.
Co-insurance: The amount paid by the policy-holder after the deductible has been met. Most often applied as a cost-sharing between the policy-holder and the insurer. For example, if the insurer covers 80% of costs for the next $5,000 of charges after the deductible is met, the policy-holder will pay the 20% balance as co-insurance.
Network: A list of health providers that are identified as part of a health plan, either as exclusive providers (HMO, see below), or as preferred providers (PPO, see below).
U, R, C: Usual, reasonable, and customary. Applies to a standard set of charges an insurer will cover for specific services. Dictates the benefit amount the policy-holder can expect to receive for specific services. Typically not disclosed by insurance carriers.
DOI: Department of Insurance. State regulatory office responsible for overseeing and defining regulations for insurance practices within the state.
HSA: Health Savings Account. A tax-deductible account opened by an individual in combination with a large-deductible health insurance plan. Deposits into these accounts, whose use is restricted to the payment of medical expenses, are tax deductible.
Section 125: Provision in the Federal tax code allowing business owners to offer employees the opportunity of making premium payments on a pre-tax basis.
Insurance Networks
HMO: Health Management Organization. A list of health providers whose services are covered under the terms of the insurance policy. Providers outside of this network are not covered by the policy.
PPO: Preferred Provider Organization. A list of health providers defined by the insurance policy whose services enjoy preferred (lower) rates.
Insurance Qualifications and Certifications
Licensed Life and Health Insurance Agent: License issued and required by the State of North Carolina to sell life and health insurance in the state.
CLU: Chartered Life Underwriter. Advanced degree in life insurance conferred by the American College.
ChFC: Chartered Financial Consultant. Advanced degree in financial consulting conferred by the American College.
RHU: Registered Health Underwriter. Advanced degree in health insurance conferred by the American College.
LUTCF: Life Underwriter Training Council Fellow. Advanced degree in life insurance products and marketing conferred by the National Association of Insurance and Financial Advisors (NAIFA) and The American College.
