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B

Binder
A document that provides proof of insurance in the interim between purchasing the insurance and receiving your actual policy.


Bodily Injury
This coverage pays your legal liability for bodily injury, including:

	Cost of care
	Loss of services
	Restitution for any death resulting from the injury

Some carriers include coverage for mental anguish. If a customer is physically injured by you and claims that he or she suffered mental anguish as a result of the injury, this coverage applies to both physical injury and mental anguish.

 

C

CDHP (Consumer-Driven Health Plans)
Consumer-directed health care plan puts you in charge. The plan combines a high-deductible PPO benefit plan with a financial account to help cover out-of-pocket health care expenses. Two examples of CDHP are HSA's and HRA's. Please see their definitions under H.

Certificate of Insurance
A Certificate of Insurance verifies that a policy has been written and states the coverage in general.  It is often used as proof of insurance in loan transactions and for other legal requirements.


Claim Expense
This provision pays for expenses you incur to assist an insurance company in investigating a claim or determining the amount of a covered loss.


Compensation for Family Members
If an injured worker's family members can prove that you are legally liable for a work-related injury or illness, they may be able to collect damages from you. In such cases, the Employer's Liability coverage provided by your policy may pay for:

	Compensation for family members for their "loss of consortium" or access to the injured worker
	Damages to spouses or relatives that result from the injury to the spouse or relative

Covered Parties
In general, Workers' Compensation insurance is designed to provide benefits for your employees. However, individuals that are defined as employees are determined by state law. And in Workers' Compensation cases, courts typically have been very liberal in their definition of employees, so as to provide injured workers with broad protection under the state's Workers' Compensation laws.

The Employer's Liability insurance included in your Workers' Compensation policy can also provide damages to injured workers separate from their Workers' Compensation benefits. Family members and other third party claimants may also receive benefits under this coverage if they prove the employer's legal liability.

D

Death Benefits
Death benefits are set by the state in terms of a maximum number of weeks' payment of wages. The benefit includes a flat amount for burial expenses as well as partial replacement of the worker's weekly wage.


Disability Income Benefits
Includes compensation for lost wages.

E

Employee Benefits Liability
Employee Benefits Liability provides coverage to an employer for an error or omission in the administration of an employee benefit program, such as failure to advise employees of benefit programs, or from other negligent acts. Coverage also includes the administration of these plans.


Employee/ERISA Dishonesty Coverage
If any of your covered employees commits a dishonest or fraudulent act which results in financial loss to your business, insurance coverage will reimburse you for the loss. This coverage can be amended to help you comply with ERISA. Most policies exclude coverage for employees who steal from you if they are known or convicted thieves.

F

Fiduciary Liability
Fiduciary liability is generally connected to coverage of pension or retirement funds.  Should any wrongful act be associated with the fund, such as the mishandling of funds or acts of errors and omissions in regards to the fund, coverage would be provided.  This coverage would extend to the company, its trustees, employers, fiduciaries, professional administrators of the pension fund, and also to the fund itself.

 

H

HMO
An HMO is an organized system for providing comprehensive health care to large groups of voluntarily enrolled member in a specific geographic area.  HMOs provide comprehensive care with no deductibles, limited out-of-pocket costs (usually $5-$10 co pay), and no claims to file.  Members must use the doctors, hospitals and drug stores that belong to the HMO'’ network, and choose a personal care physician (PCP) who oversees their care and ensures the quality and appropriateness of services through formal quality assurance programs.

HSA
A Health Savings Account (HSA) is a special account owned by an individual where
contributions to the account are to pay for current and future medical expenses

• HSAs are used in conjunction with a “High Deductible Health Plan” (HDHP)
  – Insurance that does not cover first dollar medical expenses (except for preventive
     care)
  – Can be an HMO, PPO or indemnity plan, as long as it meets the requirements

HSA Overview
• HSAs were created in Medicare legislation signed into law by President Bush on
  December 8, 2003
• HSAs modeled after Archer MSAs

If you use all of the money in your account, you pay the rest of your deductible out of your pocket. If you have unused money in your HRA at the end of the plan year, some plans allow you to apply the balance to the following year. Lastly, because the funds in your account are owned by your employer, if you leave the company, you typically will forfeit the money in your account.

 

M

Managed Care (aka Traditional Insurance)
The managed care philosophy is simply that it’s better to manage health care services to help keep people well, instead of waiting to treat them after they become ill.  In other words, it’s comprehensive medical care with an emphasis on prevention.  The terms HMO and managed care aren’t synonymous.  Managed care today encompasses everything that is not fee-for-service, or traditional health insurance.  Many health plans offer a variety of options including the HMO, Point-Of-Service (POS) and Preferred Provider Organization (PPO) options.  HMOs are the most fully developed form.  Other managed care plans build on the HMO model:  they establish relationships with purchasers, physicians, and other health care providers and consumers that influence both the costs of care and the way health care is delivered and used.

Medical Benefits
Medical benefits include medical, hospital, surgical, and other related health care costs as well as physical therapy and prosthetic devices.


Medical Bill Review
A medical bill review includes a computerized analysis of all medical bills submitted to spot any erroneous charges as well as inappropriate patterns of treatment.


Monopolistic States (OH, WA, WV, WY, ND)
In five states, the state governments mandate that employers purchase Workers' Compensation insurance from the state fund. Referred to as "monopolistic states," these states don't even allow insurance companies to sell Workers' Compensation to employers headquartered within their borders.

Even if your business isn't domiciled in one of these states, you could still be affected by their laws. If one of your employees is injured in any of these states and decides to file a Workers' Compensation claim, that state's laws apply. In such a situation, you can purchase “stop gap” or "employer's liability" coverage. This coverage pays for related expenses and damages in case you are ever sued for the employment-related injury or illness. Other insurers may offer this extended coverage in these states -- but only if you specifically request that they add it to your policy.

P

POS (Point Of Service)
In a POS option, enrollees select a PCP who directs their care.  The enrollee has the option of seeking care outside the network, but receives more coverage if they use providers in the network.  Members seeking care out-of-network will incur higher out-of-pocket costs.  Referrals are required for specialty care within the network to be fully covered.

PPO (Preferred Provider Organization)
A PPO is the least integrated option and offers the most flexibility for members.  Enrollees do not have to select a PCP, and no referrals are needed.  They are encouraged to use providers contracted with the PPO. They may choose to use providers who are not part of the PPO, in which case, the PPO covers less of the cost and the patient is charged a higher co-payment.


Provider Networks
Provider networks are pre-screened networks of health care providers who deliver quality services at a discounted rate.

R

Rehabilitation Benefits
Includes services to help an injured worker return to productive work, such as vocational rehabilitation.


Return to Work Program
A return to work program allows injured workers to return to maximum employment quicker. It reduces the wages component of the claim. It also assists in the mental recovery of the employee.

 

T

Traditional Insurance
Please see Managed Care.

 

U

Utilization Review
A utilization review includes a case-by-case analysis of appropriate lengths of hospital stays for injured workers.

 

W

Workers' Compensation Coverage
Pure Workers' Compensation coverage provides benefits for injured workers as required by state law regardless of who is at fault for the injury or illness. In other words, whatever benefits your state requires that employers provide for injured workers, your Workers' Compensation policy provides.  For more information, please see Knowing the Basics - Workers' Compensation.


Work-Related Injuries
If one of your employees is accidentally injured while on the job, your Workers' Compensation policy pays for a wide range of services to aid the injured worker's recovery and return to productive work. These services can include the cost of medical care, compensation for lost wages, and rehabilitation therapy.


If your employee is accidentally killed while on the job, your policy also provides death benefits, including burial expenses and partial replacement of the worker's weekly wage.