Health-insurance terms
Plain-language definitions for the terms patients and clinicians encounter most often.
Allowed amount
The maximum amount your plan considers payable for a covered service. Calculated cost-sharing is based on this number.
Appeal
A formal request that your plan reconsider its denial of coverage.
Balance billing
When an out-of-network provider bills you the difference between their charge and what your plan paid. Mostly banned by the No Surprises Act for emergency and certain non-emergency situations.
CARC (Claim Adjustment Reason Code)
A numeric code on insurance EOBs and 835 ERAs explaining why a claim was reduced, denied, or adjusted.
COBRA
Federal law allowing you to continue your employer's health insurance for up to 18-36 months after job loss or other qualifying events.
Coinsurance
Your percentage share of a healthcare service cost after you've met your deductible — usually 10-30%.
Coordination of Benefits (COB)
The rules that determine which insurance plan pays first when you have multiple plans.
Copay
A fixed dollar amount you pay for a specific healthcare service (e.g., $30 for an office visit).
Deductible
The amount you pay out of pocket each year before your insurance starts paying. Resets every plan year.
Deductible accumulator
A program where drug-manufacturer copay assistance does NOT count toward your deductible or OOP max.
Diagnosis Related Group (DRG)
A classification system that bundles inpatient hospital stays into single-payment categories.
Essential Health Benefits (EHB)
The 10 categories of services all ACA-compliant plans must cover. No annual or lifetime dollar limits allowed on EHB services.
Explanation of Benefits (EOB)
The statement your plan sends after processing a claim, showing what was billed, what they paid, and what you owe.
External review
Binding review by an Independent Review Organization after internal appeal is exhausted. The IRO decision binds the plan.
Federal IDR (No Surprises Act dispute resolution)
The 'baseball arbitration' process between out-of-network providers and plans for NSA-covered services.
Flexible Spending Account (FSA)
An employer-sponsored pre-tax account for healthcare expenses. 'Use it or lose it' — funds typically forfeit if not spent by year-end.
Formulary
The list of prescription drugs your plan covers, organized into tiers with different cost-sharing.
Formulary exception
A request for coverage of a non-formulary drug, supported by a prescriber statement of medical necessity.
Good Faith Estimate (GFE)
An estimate uninsured and self-pay patients are entitled to before scheduled care, required by the No Surprises Act.
Grievance
A formal complaint about plan conduct OTHER than a coverage decision — service, access, quality, treatment.
Health Reimbursement Arrangement (HRA)
An employer-funded account that reimburses employees for qualified medical expenses, often paired with high-deductible coverage.
Health Savings Account (HSA)
A pre-tax savings account tied to an HDHP. Funds carry over indefinitely and grow tax-free.
High-Deductible Health Plan (HDHP)
A health plan with a high deductible — minimum $1,650 individual / $3,300 family in 2025 — that qualifies for HSA pairing.
In-network
A provider, facility, or pharmacy that has a contract with your plan to provide services at negotiated rates.
Internal appeal
The first formal review of a denial — conducted by the plan itself, by someone other than the original decision-maker.
Medical necessity
The standard for whether a service is required to diagnose or treat a condition — and the most common reason for denied claims.
Mental Health Parity (MHPAEA)
Federal law requiring health plans to cover mental health and substance use disorder services at parity with medical/surgical services.
No Surprises Act (NSA)
Federal law (effective 2022) banning balance billing for most emergency and certain non-emergency out-of-network situations.
Non-formulary drug
A drug not included on your plan's covered drug list. Requires a formulary exception request for coverage.
Out-of-network (OON)
A provider who doesn't have a contract with your plan. Cost-sharing is higher and you may face balance billing — unless NSA protections apply.
Out-of-pocket maximum (OOP max)
The most you'll pay out of pocket in a plan year before the insurer covers 100% of covered services.
Peer-to-peer (P2P)
A live phone discussion between the prescribing physician and a plan medical director. Often resolves denials in minutes.
Premium
The amount you pay each month to maintain insurance coverage — regardless of whether you use care.
Premium Tax Credit (PTC)
A federal tax credit that lowers ACA Marketplace plan premiums for households between 100-400% of the Federal Poverty Level (and beyond, through 2025).
Preventive services
Healthcare services required by ACA §2713 to be covered at $0 cost-sharing on in-network — including most screenings, immunizations, and women's health services.
Primary payer
When you have more than one insurance plan, the one that pays first.
Prior authorization (PA)
Plan approval required BEFORE a service is rendered, otherwise the plan won't pay.
Qualifying Life Event (QLE)
Life events (marriage, birth, job loss, etc.) that open a Special Enrollment Period to change insurance outside open enrollment.
RARC (Remittance Advice Remark Code)
A supplementary code on EOBs that adds detail to a CARC denial.
Secondary payer
The insurance plan that pays after the primary plan has processed the claim.
Specialty tier
The plan's highest-cost drug tier, typically reserved for biologics, oncology drugs, and complex specialty medications.
Step therapy
A plan requirement to try and fail a cheaper drug before the plan covers the requested drug.
Subrogation
The right of your health plan to recover payments it made if a third party (auto accident, employer negligence, product liability) is responsible.
Third-Party Administrator (TPA)
A company that administers a self-funded employer health plan but does NOT bear the claim risk.
Usual, Customary, and Reasonable (UCR)
A historical method of calculating out-of-network 'allowed amount' based on regional fee data.
Contact: hello@denialhelp.com