Benefits Glossary

Doctors, clinics, hospitals and other providers with whom the health plan has an agreement to care for its members and not to balance bill patients for amounts beyond the agreed upon fee. Health plans cover a greater share of the cost for in-network providers than for providers who are out-of-network.

A distribution from a 401(k) Plan to employees who have not terminated employment. In-Service Distributions are restricted by federal law and by most plans.

A health insurance policy that is not connected to job-based coverage. It is a policy that an individual purchases, on either an individual or family basis, as opposed to obtaining it through an employer. Policies can be purchased through the Exchange or directly from a health insurance carrier and they are regulated under state law.

Under this type of plan, an employer contracts with another organization to assume financial responsibility for the costs of participants’ medical claims.

A pension plan design in which an employer’s contributions to Social Security (FICA taxes) are taken into account when plan benefits are computed. Integration is accomplished by an offset or a step-rate method.

• Offset method – Part of a participant’s Social Security benefit is subtracted from the pension benefit otherwise payable by the plan. The most common offset is 50 percent.

• Step-rate method – Lower benefit accrual rates are applied to earnings up to the specified taxable Social Security wage base; higher rates are applied to earnings above the wage base.

A statement clarifying the goals and objectives for investing a pension plan’s assets. The policy may include general investment goals and objectives along with target allocations for various asset classes (for example, stocks, bonds, real estate and cash).

Individual Retirement Account acronym. An IRA is a retirement savings plan. There are several types of IRAs: Traditional IRAs; Roth IRAs; Simplified Employee Pensions (SEP) IRAs; and Savings-Incentive Match Plans for Employees (SIMPLE) IRAs. Traditional and Roth IRAs are established by individuals, while SEP and SIMPLE IRAs are retirement plans established by employers.

Affordable Care Act IRS tax code calling for every provider of minimum essential coverage to report coverage information by filing an information return with the IRS and providing a statement to individuals.

Affordable Care Act IRS tax code which outlines what an Applicable Large Employer needs to do to notify their employees and the IRS about the health care coverage they offer.