Insurance Terminology You Need To Know: Part III

This is part three of our series on insurance terminology. We decided to define many of the words associated with insurance coverage to ensure that those seeking a working knowledge would be able to obtain it. Not sure what a particular term means? You’ll find it here sooner or later, and they aren’t that difficult to sift through since they’re in alphabetical order. Here are a few more terms.

What is creditable coverage?

Creditable coverage usually refers to the person whose coverage comes from another source, including Medicare or Medicaid, which are two of the most common creditable coverage plans. Others include group health plans, military healthcare plans, Indian Health Service (and other tribal programs), risk pools, the Federal Employees Health Benefits Program, a Peace Corps Act health plan, etc.

What is a dependent?

A dependent is basically someone who relies on another for support. For example, a parent might claim one or more dependents (his or her children) when filing tax forms. Dependents usually provide a taxpayer with credits or other benefits. There are other examples of dependents, such as someone who is disabled.

What is an emergency medical condition?

On a healthcare plan, you’ll want to make sure you understand anything outlined under the emergency medical condition clause. These are conditions that put your health at risk, but sometimes specific conditions are outlined in a particular plan while others are left out. 

What is an FSA?

A flexible spending account (or FSA) is usually provided through an employer. These plans allow a person to set aside funds for certain contingencies. The money is considered “pre-tax” which means you won’t have to pay taxes on the FSA funds until the money is removed from the account. These funds can be used for specific reasons, like paying copays, hospital fees, physical rehabilitation costs, or dental expenses. Vaccines are also included.