Benefits Glossary

Common term for a law signed in 2012 called the Moving Ahead for Progress in the 21^st Century Act that established new funding rules for pension plans.

A transparent, competitive insurance market where individuals and small businesses can purchase affordable and Qualified Health Plans. This is also used for dependent children who age out of coverage eligibility. Also known as the Health Insurance Marketplace.

A type of employer contribution to a DC Plan which requires an employee to contribute to the plan. The Matching Contribution usually depends on the Participant Contribution.

The maximum amount payable by the insurer for covered expenses for an insured and each covered dependent. Plans can have a yearly or a lifetime maximum dollar limit. A common maximum dollar limit is a lifetime amount of $1 million per individual.

Minimum Essential Coverage acronym. Any health insurance that meets the ACA requirement for having health care coverage. Individuals with MEC do not have to pay the penalty for being uninsured, which applied through the 2018 plan year. Examples: individual plans, including Marketplace plans; job-based plans; Medicare; Medicaid and the CHIP. Also referred to as Qualifying Health Coverage.

A joint state and federal program that provides health care coverage to eligible categories of low-income individuals. Rules for eligible categories and for income and asset requirements vary by state. Coverage is generally available to all individuals who meet these state eligibility requirements. Medicaid often pays for long-term care (such as nursing home care).

A federal program that provides health coverage for all eligible individuals age 65 or older or under age 65 with a disability, regardless of income or assets. Eligible individuals can receive coverage for hospital services (Medicare Part A), medical services (Medicare Part B), and prescription drugs (Medicare Part D). Benefits can also be provided through a Medicare Advantage Plan (Medicare Part C).

An option Medicare beneficiaries can choose to receive most or all of their Medicare benefits through a private insurance company. Plans contract with the federal government and are required to offer at least the same benefits as Medicare, but may follow different rules and may offer additional benefits.

An optional program that helps pay for prescription drugs for people on Medicare who join a plan that includes Medicare prescription drug coverage. These plans are offered by insurance companies and other private companies approved by Medicare. Covered individuals use the insurance carrier’s network of pharmacies to purchase prescription medications.

A coverage gap which exists in most plans with Medicare prescription drug coverage (Medicare Part D). After the insured and the plan have spent a certain amount of money for covered drugs, the insured has to pay all costs out-of-pocket up to an annual limit. After costs reach this limit, the coverage gap ends and the plan helps pay for covered drugs again.

Private insurance policies that can be purchased to “fill-in the gaps” and pay for certain out-of-pocket costs such as Deductibles and Coinsurance not covered by Medicare (Part A and Part B). This is also known as Medigap Insurance.

The minimum amount of cash that must contributed to a pension plan by the plan sponsor, calculated for a given Plan Year. Contributions are generally required to be paid on a quarterly basis, with the final contribution due 8½ months after the end of the Plan Year.

A type of plan where the employer agrees to make fixed contributions each year for eligible employees. The contribution is typically expressed as a percentage of the employee's pay. The contribution must be made each year, regardless of employer profits, and can only be varied by plan amendment. Although treated differently under federal tax law, it is fundamentally a DC Plan.

In general, a group health plan that is sponsored jointly by two or more employers. This type of health plan typically covers workers of two or more unrelated companies in accordance with a collective bargaining agreement.