Employee Benefits and Group Insurance Glossary of Terms -
PLEASE NOTE: This glossary is intended to provide definitions of certain commonly used employee benefits and group insurance terms. The glossary is provided as a courtesy and is for informational purposes only. It is not intended for legal, tax, or any other technical purposes. For any such purposes please consult with your own legal, tax, and/or other expert advisors. The glossary is not intended for MetLife product purposes. For MetLife product information please contact a MetLife group representative.
To view glossary terms please select the first letter of word you would like to see.
Actively At Work provision - Provision commonly contained in group insurance policies covering employees. Such provisions generally require that to be eligible for coverage, an employee must be actively at work on the date insurance coverage is to take effect.
Administrative Services Fee - A fee paid for provision of administrative services, generally in connection with a self-funded benefit of an employee benefit plan pursuant to an ASO Contract.
Administrative Services Only Contract (“ASO”) - A contract under which an insurer or other organization agrees to provide some or all administrative services in connection with a self-funded benefit of an employee benefit plan.
Beneficiary - A person designated by an employee benefit plan participant, or by the terms of an employee benefit plan, who is or may become entitled to a benefit under the plan.
Benefit Claim - A request for payment of benefits under the terms of an employee benefit plan and/or an insurance contract.
Carve Out - To remove a group of employees (e.g. highly compensated employees) from a larger class of employees so as not to be eligible for the same benefits as the larger class.
Certificate of Insurance - A document in a group insurance policy that describes the coverage for benefits provided by the group insurance contract and the group insured’s rights under the contract.
Church Plan - A benefits plan for employees of a church or by a convention or association of churches.
Co-Payment - A specified, fixed amount that a plan participant pays to a network provider when the plan participant receives services from the provider under an employee benefit plan.
Coinsurance - An expense participation requirement imposed under some group insurance policies. The coinsurance requirement generally is a specified percentage of allowable expenses that remain after the insured has paid the deductible and that must be paid by the insured.
Contributory Insurance - Group insurance for which plan participants are required to contribute some or all of the premium for their coverage. Any premium not contributed by participants is paid by the employer or employee benefits plan.
Conversion - A provision in a group insurance policy that gives an individual for whom coverage terminates under certain circumstances the opportunity to convert group insurance coverage to an individual policy of insurance without presenting evidence of insurability.
Coordination of Benefits Provision (“COB”) - A group insurance policy provision, generally for group health insurance, which outlines how benefits will be paid when a group member is insured for the same type of risk under more than one policy. COB is designed to prevent a person from receiving benefit amounts that are greater than the expenses the insured actually incurred.
Employee Benefit Plan - A benefit plan established by an employer or employee organization. Under ERISA an employee benefit plan includes an employee welfare benefit plan and/or an employee pension benefit plan.
Employee Identification Number - A unique number assigned to each employee by his or her employer.
Employee Retirement Income Security Act (“ERISA”) - A U.S. federal law designed to regulate employee benefit plans. For example, ERISA protects plan participants by requiring disclosure and reporting, by establishing standards for fiduciaries of employee benefit plans, and by providing for appropriate remedies. ERISA does not regulate government plans, church plans, and certain other employee benefit plans.
Employee Welfare Benefit Plan - An employee benefit plan for the purpose of providing medical, surgical, or hospital care or benefits, or benefits in the event of sickness, accident, disability, death or unemployment, or prepaid legal services, or certain other benefits, but not pension benefits.
Governmental Plan - Is a benefits plan for employees of the government of the US, any State or political subdivision, any Indian tribe or political subdivision, or any governmental agency.
Group Health Plan - An employee welfare benefit plan which provides group health benefits such as medical benefits. Such plans in some cases may provide other health benefits such as dental benefits or long term care insurance.
Group insurance policy - An insurance policy issued to an employer, or another entity, which employer or other entity is the policyholder, to insure employees of the employer (or members of a group of individuals associated with an entity which is not an employer). Group insurance policies are commonly issued to fund benefits under employee benefits plans.
Inforce Premium - Insurance premium on active group insurance cases.
Insurance Policy - A transaction whereby one party, the insurer, is obligated to confer a benefit of pecuniary value upon another party, the insured or beneficiary, dependent upon the happening of a fortuitous event in which the insured or beneficiary has, or is expected to have a material interest which will be adversely affected by the happening of the event.
Noncontributory Insurance - Group insurance for which plan participants are not required to contribute premium for their coverage. All premium is paid by the employer or employee benefits plan.
Plan Benefit - The benefit provided to the participant or beneficiary by an employee benefit plan.
Plan Participant - An employee or former employee (or any member or former member of an employee organization) who is or may become eligible to receive a benefit of any type from an employee benefit plan or whose beneficiaries may be eligible to receive a benefit.
Plan Sponsor - The employer or employee organization which establishes an employee benefit plan.
Portability - A group insurance feature that enables plan participants to keep group insurance coverage under the same or a different group insurance policy if eligibility (for example as an employee) would otherwise end.
Premiums - The amount paid to an insurer for assuming an obligation to protect a person or entity from an insured risk.
Recordkeeping - In group insurance, administrative processes performed by a group insurer, or an employer (or other group policyholder) or third party administrator, in order to create and maintain the required records in connection with insured plan participants. Such records can include enrollment, beneficiary, statement of health, and billing records, among others.
Self-Funded Benefits - Employee benefits which are not funded by insurance and are paid by the employee benefits plan.
Third Party Administrator (“TPA”) - An entity, which can be an insurer or other type of organization, that pays claims or provides other administrative services, generally on behalf of an employee benefit plan. A TPA may perform such services in connection with insured or self-funded benefits.
Waiting Period - A period of time that a person may have to wait before being eligible for certain benefits under an employee benefit plan and/or a group insurance policy.