Glossary of Terms

Glossary of Terms and Acronyms

Adoption Assistance Program – (see Qualified Adoption Assistance Program)

Cafeteria Plan – a reimbursement plan regulated by IRS Section 125. A Cafeteria Plan allows an employer to select a variety of reimbursement options and assistance programs as pre-tax benefits for employees, including (but not limited to) FSAs, DCAPs, Adoption Assistance Programs, and Premium Conversion Plans

CDHC – (see Consumer Driven Health Care)

COBRA – (see Consolidated Omnibus Reconciliation Act)

Consolidated Omnibus Reconciliation Act (COBRA) – an amendment to ERISA that allows employees who lose their health benefits to continue their group health plan for a limited period of time under certain circumstances.  For more information see http://www.myCobraPlan.com

Consumer Driven Health Care (CDHC) – non-traditional health insurance programs that promote individual involvement in health care decisions. Typically, the term is used to denote the combination of individual reimbursement plans (funded by either employee or employer) and HDHPs aimed at lowering health insurance premiums and providing alternative solutions to health care costs.

Corporate Resolution – a written document that describes an action taken by the board of directors of a corporation. This document generally will authorize an individual to act on behalf of the corporation.

DCAP – (see Dependent Daycare Assistance Program)

Defined Contribution Plan – a plan in which each participant has a separate account and benefits are based on the amount contributed. Examples include cafeteria plans, HRAs, and HSAs.

Dependent Daycare Assistance Program (DCAP) – a reimbursement arrangement funded by employee salary reductions for eligible dependent daycare expenses. Part of a Cafeteria Plan.

Dependent Daycare FSA – an account funded by employee salary reductions for reimbursement of eligible dependent daycare expenses and is part of a Cafeteria Plan.

ERISA – (see Employee Retirement Income Security Act)

Employee Retirement Income Security Act (ERISA) – a federal law enacted in 1974 that provides standardization of health and pension plan administration for the protection of participants in those plans.  For more information see http://www.dol.gov/dol/topic/health-plans/erisa.htm

Form 5500 – an IRS form for reporting the financial condition, investments, and operations of companies sponsoring ERISA plans. Plans with fewer than 100 participants are usually exempt.

Flexible Spending Account (FSA) – an account funded by employer contribution and/or employee salary reduction for reimbursement of deductible and out-of-pocket medical and dependent daycare expenses and is part of a Cafeteria Plan.

Flexible Spending Arrangement – another name for Flexible Spending Account and is part of a Cafeteria Plan.

Fringe Benefit – a benefit offered by the employer as additional compensation.

HDHC – (see High Deductible Health Coverage)

HDHP – (see High Deductible Health Plan)

Health Insurance Portability and Accountability Act (HIPAA) – an amendment to ERISA enacted in 1996 that provides privacy protection by establishing national standards for health care information as well as other protections dealing with continuity of coverage, portability, and pre-existing conditions.  For more information see http://www.dol.gov/dol/topic/health-plans/portability.htm

Health Reimbursement Arrangement (HRA) – a type of MRP funded by employer contributions only as an account for reimbursement of deductible or out-of-pocket medical expenses; funds rollover at the discretion of the employer. An HRA is sometimes offered in conjunction with an HDHP.

Health Savings Account (HSA) – a trust or custodial account funded by employer contributions and/or employee salary reduction for reimbursement of deductible or out-of-pocket medical expenses. An HSA is ONLY available in conjunction with an HDHP.  Regulated primarily by IRS Section 223, but can be funded through a Cafeteria Plan.

High Deductible Health Coverage (HDHC) – the combination of a health insurance plan with a high deductible and a reimbursement plan.

High Deductible Health Plan (HDHP) – a health insurance plan with a high deductible, designed for use in conjunction with a reimbursement account such as an HSA, MSA, or HRA. The main feature of CDHC.

HIPAA – (see Health Insurance Portability and Accountability Act)

HRA – (see Health Reimbursement Arrangement)

HSA – (see Health Savings Account)

Medical Expense Reimbursement Plan – another name for a Medical Reimbursement Plan (MRP).

Medical FSA – an account funded by employee salary reductions for reimbursement of deductible or out-of-pocket medical expenses and is part of a Cafeteria Plan.

Paper Claim – also called a “traditional” claim.  Any claim submitted for reimbursement after an expense has been billed to or paid by the plan participant, or both.

Parking Plan – a plan funded by employee salary reduction for reimbursement of eligible parking expenses and is part of a QTP.

Plan Year – the 12-month period established by the employer defined as the boundary for reporting and determining eligibility in the plan.

POP – (see Premium Only Plan)

Premium Conversion Plan – a reimbursement arrangement funded by employee salary reductions for group health insurance premiums, generally in conjunction with an FSA and is part of a Cafeteria Plan.

Premium Only Plan (POP) – a reimbursement arrangement funded by employee salary reductions for group health insurance premiums. Part of a Cafeteria Plan.

QTP – (see Qualified Transportation Plan)

Qualified Adoption Assistance Program – a reimbursement arrangement funded by employer contribution and/or employee salary reduction for adoption expenses, up to the IRS statutory limit or a lower limit set by the employer. Regulated primarily by IRS Section 137, but can be funded through a Cafeteria Plan.

Qualified Transportation Plan (QTP) – a reimbursement plan regulated by IRS Section 132. A QTP reimburses employees’ eligible transit and parking expenses, up to the IRS statutory limit or a lower limit set by the employer.

SPD – (see Summary Plan Description)

Summary Plan Description (SPD) – a Cafeteria Plan document that summarizes benefits under the plan.

Traditional Claim – (see Paper Claim)

Transit Plan – an account funded by employee salary reductions for reimbursement of eligible transportation and vanpooling expenses and is part of a QTP.