Mental Health Glossary Of Terms

Premium: The premium is the fee charged by insurance companies to purchase their insurance coverage. Generally paid as a monthly or biweekly plan payment, this may be paid through someone’s paycheck or may be paid directly to an insurance company or insurance broker. Premiums are often shared between employers and employees with the amount of the employee share having increased over the past decade

Deductible: The deductible is a fixed amount that the client or responsible party must pay out of their own pocket before the insurer will reimburse the provider. There may be a difference depending on if the policy varies for the primary policy holder vs family member

Copay: When an insurance plan requires the client or responsible party to pay a certain dollar amount of the provider's fee, the amount paid by the client or responsible party is labeled as the co-pay. This is generally a flat fee. If a co-pay is due, it is collected at each session during the check-in process.

Coinsurance: A percentage of the cost of services that the insured person has to pay. For example, a plan may pay 90% of the charges and the insured pay 10%

Negotiated Rate or Contract Rate: The amount Participating Providers agree to accept as payment in full for covered services. This rate is usually lower than their normal charge. These rates are determined by the Insurance Carrier's Participating Provider Agreements.

Annual/Lifetime Cap: The maximum amount of money your insurance company will pay for certain mental health services over a calendar year or a lifetime. This “cap” may be stated as a number of counseling sessions or a dollar amount. For example, some HMO plans set a cap of 20 counseling sessions per year, while other insurance plans offer unlimited counseling sessions.

Out of Pocket Maximum: The highest amount a member will pay in the calendar year out of pocket. For example, the client may have a $3000 deductible, $25 copay and a $6000 out of pocket maximum. The client would pay the full contractacted rate until the deductible is met, then pay the $25 copay until the $6000 out of pocket maximum has been reached. At that time, they would pay $0

In-Network Providers: Insurance companies contract with certain providers to be designated as “in-network providers.” Counselors may be selected to join a network because they accept low fees, because they have a particular specialty, or because they applied and were accepted into the network. It cannot be assumed that a provider of service is in-network or out-of-network simply because of their quality of care standards.

Pre-certification: Some insurance plans require a Mental Health Professional or your Primary Care Physician to get pre-certification before they can provide certain types of treatment. For example, various psychological and neuro-psychological testing often requires precertification. In most cases, reimbursement will be denied if services are not pre-certified.

Responsible Party: This term refers to the person responsible for payment when a client receives counseling services. Although the most common case is the situation where the client is their own responsible party, there may be other situations. For example, if a child is the client, the parents may be the responsible party.

Carve-out: refers to the practice of having a specific benefit, such as mental health or substance abuse, operated as a distinct program, separate from the general health program. This may be an entirely different company ie.

Fee-for-service: Is a traditional method of paying for medical services under which providers are paid for each office visit, treatment, procedure, or other service rendered

What is HSA/FSA/HRA?

FSA (Flexible Spending Account): A flexible spending account (FSA) is a type of savings account that provides the account holder with specific tax advantages. An FSA is sometimes called a “flexible spending arrangement” and can be established by an employer for employees. The account allows you to contribute a portion of your regular earnings; employers also can contribute to employees’ accounts. Distributions from the account must be used to reimburse the employee

HRAs are employer-funded plans that pay back, or reimburse, employees for qualified medical expenses and sometimes health insurance premiums. Unlike an HSA, HRAs are not bank accounts, they are an agreement between the employee and employer.

Employers are allowed to claim a tax deduction for these reimbursements. Plus, the money that employees get from their employers is typically tax-free as well.

HSA (Health Savings Account): A health savings account, also known as an HSA, is a tax-exempt savings account that, when paired with a qualified high-deductible health plan (QHDHP), can be used to pay for certain medical expenses. Funds deposited are not taxed, nor are withdrawals for qualified expenses.

Unlike an HSA, an HRA is not an account. The employee must make the health care payment, and then have it reimbursed after. This also means that an employee can’t take their HRA with them if they leave their job.