Decoding Health Care Acronyms
Open enrollment is coming and, unless you’re an Alphabet Soup junkie, the amount of letters that get thrown around is enough to make you want to switch exclusively to Spaghetti O’s. But that’s where we come in!
Here is our list of the most common acronyms you’ll see as an HR administrator in the health insurance world and the basics you need to know about each:
FTE – “Full-time equivalent” calculated by adding the working hours of all staff in an organization together (online calculators make this much easier!).
ACA – “Affordable Care Act” that basically says any employers with fifty or more FTE must offer health insurance to anyone working 30+ hours a week.
HSA – “Health Savings Account”, only available with an HDHP (high deductible health plan), that both the employee and employer can contribute to. The funds roll over year over year, and your employees can take them with them if they leave the organization. There are contribution limits and restrictions on how funds can be used but the list includes lots of out-of-pocket costs.
HRA – “Health Reimbursement Account” covers healthcare expenses once occurred (hence the “reimbursement”). It cannot combine with an HSA and only an employer can contribute to the account.
QSHRA – “Qualified Small Employer HRA” is a type of HRA available only to employers with less than 50 FTE who is not offering group health insurance. It must be offered to all eligible employees (usually fulltime) and has IRS governed annual maximum contributions.
ICHRA – “Individual Coverage HRA” is a type of HRA that can be offered by any size employer but only with qualifying group or individual plans. The employer can choose to offer it only to certain classes of employees and there are no annual maximums.
FSA – “Flexible Spending Account” both the employer and employee may contribute pre-tax dollars but these funds do not roll over and cannot be transferred if the employee leaves the organization.
TPA – “Third party administrators” can help design a health care plan that works best for your employees, ensure plan docs are compliant, and also help administer claims for reimbursements, maintain plan records, and run open enrollment meetings and processes all while maintaining the latest compliance standards. Just a note: we think TPA’s are WELL WORTH the investment!
EOB – “Explanation of Benefits” often required for reimbursements but cannot be turned in directly to an employer due to privacy laws (this is why you need a TPA!).
Broker – This one isn’t an acronym but is an extremely important term to understand! A broker is your compliance expert when it comes to benefits, historical data, trends, and so much more. They can help you navigate plans as well as guide employees and answer their questions, meet with new hires to explain benefits and provide a user-friendly online platform. They often offer EAP “employee assistance programs” that can help increase wellness for your staff.
Still need help figuring out health care terminology and process? First, check with your broker! But if you want to increase your overall knowledge of how to take care of your employees well….