Glossary of Benefits & Financial Planning Terms
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The Glossary gives you a general definition for key terms. See your summary plan descriptions for more specific definitions and to learn what your plan covers.
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1035 exchange - Section 1035 sets out provisions for the exchange of similar (insurance related) assets without any tax
consequence upon the conversion. If the exchange qualifies for like-kind exchange consideration, income taxes are deferred until
the new property or asset is sold. The 1035 exchange provisions are only available for a limited type of asset which includes cash
value life insurance policies and annuity contracts.
10K - An annual report filed by corporations each year as required by the SEC. The 10K must be filed within 90 days after the end
of the fiscal year and provides a comprehensive overview of a company's business practices and financial stability.
401(k) plan - A 401(k) plan is a tax-deferred defined contribution retirement plan that gives eligible employees the opportunity to
defer a portion of their current compensation into the plan. Amounts that are deferred are excluded from the participant's gross
income for the year of the deferral. The plan may provide for employer matching contributions and discretionary profit-sharing
contributions.
403(b) plan - Tax deferred annuity retirement plan available to employees of public schools and colleges, and certain non-profit
hospitals, charitable, religious, scientific and educational organizations.
457 plan - Non-qualified deferred compensation plans available to employees of state and local governments and tax-exempt
organizations.
60-day roll-in contribution - A distribution an employee received from a former employer's qualified plan, or withdrew from a
conduit IRA, and deposited in a qualified retirement plan with a company that accepts rollovers. Mandatory tax withholding and a
60-day deadline apply.
Abutment - A tooth or implant used to support a bridge or other prosthesis. A crown unit used as a part of a fixed bridge.
Abscess - A localized inflammation due to a collection of pus in the bone or soft tissue, usually caused by an infection.
Accelerated contributions (catch-up contributions) - For tax-sheltered annuity plans, extra contributions a participant may make in
certain years to help make up for less than maximum contributions in previous years.
Accident insurance - Coverage for bodily injury due to an accident.
Accidental death and dismemberment (AD&D) insurance - Coverage for death or loss of a body part or function due to an accident.
Accidental death benefit - An accidental death benefit is a rider added to an insurance policy which provides that an additional
death benefit will be paid in the event death is caused by and accident. This rider is often called "double indemnity."
Account balance plan (cash balance plan) - A retirement plan that is qualified and funded as a career average pay pension plan, but
communicated to employees like a defined contribution plan, with individual employee accounts that are credited with contributions
and earnings each year.
Accounts payable - A balance sheet item representing the amount of money a company owes to its creditors.
Accounts receivable - A balance sheet item representing the amount of money a company is owed by its customers for goods and
services it has provided.
Accreditation - Certification that an organization meets the reviewing organization's standards. Examples: accreditation of HMOs by
the National Committee on Quality Assurance (NCQA) or accreditation of hospitals by the Joint Commission of Accreditation of
Healthcare Organizations (JCAHO).
Accrual basis - One of several methods of accounting. Requires that all interest and income be included as it is earned and that all
expenses are included as incurred.
Accrued benefits - For a defined benefit plan, benefits that a participant accumulates based on years of service, expressed as a
dollar amount of benefit to begin at the plan's normal retirement age. For any other type of retirement plan, the accrued benefit is
the balance in the participant's account.
Accrued Liability - The amount of liability assigned, under the actuarial method used, to years prior to the valuation date of a
defined benefit plan.
Actively at Work - The employee is present on the job, or otherwise meets the plan's requirements for being actively at work.
Activities of daily living (ADLs) - Activities such as dressing, feeding, and toileting, that a participant needs to perform for self-care.
ADLs may help determine a participant's eligibility for benefits under a long-term care plan.
Actual Compensation Percentage (ACP) - One of the factors used to test 401(k) defined contribution plans for nondiscrimination.
The eligible participants are divided into groups of highly compensated and non-highly compensated. Within each group, the aftertax employee contribution and the employer match for each employee is determined as a percentage of pay. These are then
averaged to determine the ACP for each group. The highly compensated ACP is the compared to the non-highly compensated ACP.
Actual Deferral Percentage (ADP) - One of the factors used to test 401(k) defined contribution plans for nondiscrimination.
Basically, the eligible participants are divided into groups of highly compensated and non-highly compensated. Within each group,
the pre-tax salary reduction contribution percentage for each employee is determined as a percentage of pay. These are then
averaged to determine the ADP for each group. The highly compensated ADP is the compared to the non-highly compensated ADP.
Actuarial Assumptions - Assumptions or estimates of future experience in those areas that will affect benefit levels and pension
costs; for example, interest, pay increases, mortality, turnover (withdrawal), disability, and age at retirement.
Actuarial Cost Method - A mathematical process that allocates the expected value of pension benefits to various years of an
employee's career.
Actuarial Equivalent - If the present value of two series of payments is equal, assuming a given interest rate and mortality table,
the two series are said to be actuarially equivalent. For example, a lifetime monthly benefit of $67.60 beginning at age 60 is
actuarially equivalent to a lifetime monthly benefit of $100 beginning at age 65.
Actuarial Gains or Losses - The effect on actuarially calculated pension liabilities of deviations between actual experience and the
actuarial assumptions used.
Actuarial Present Value - Current worth of an amount or series of amounts payable or receivable in the future, where each such
amount is discounted at an assumed rate of interest and adjusted for the probability of its payment or receipt.
Actuarial Valuation - A periodic examination of a pension program to determine plan liabilities.
Actuarially Reduced Benefit - Pension benefit amount payable to an employee who retires before normal retirement age. The
actuarial amount reflects the longer payment period and life expectancy. (See Actuarial Equivalent)
Actuary - A person professionally trained in the technical and mathematical aspects of insurance, pensions, and related fields.
Acupuncture - A traditional form of Chinese medicine using a technique which involves the passing of needles through the skin to
specific points to treat various disorders.
Acupuncturist - A qualified provider who practices acupuncture.
Acute care - Treatment for a severe and short-term health problem.
AD&D - See accidental death and dismemberment.
ADLs - See activities of daily living.
Adjudication - The process used by Health Benefit Plans to determine eligibility for benefits and the amount of payment, if any, for
a claim.
Adjustable rate mortgage (ARM) - An adjustable Rate Mortgage offers an initial interest rate that is usually lower than a fixed rate,
but that adjusts periodically according to market conditions and financial indices. The rate may go up and/or down, depending on
economic conditions. To limit the borrower's risk, the ARM will almost always have a maximum interest rate allowed, called a "rate
cap."
Administrative Service Contract (Administrative Service Only, ASO) - An arrangement under which an insurer agrees to process
claims under a group medical plan. Usually used in conjunction with a self-funded plan.
Adoption assistance program - A program to reimburse employees for their eligible expenses to legally adopt a child. The program
may cover expenses such as adoption agency and legal fees, pregnancy and hospital expenses of the birth mother, and
immigration and naturalization expenses.
Adoption leave - Leave of absence granted by a company due to adoption or placement of a child for purposes of adoption.
Adult care assistance - See adult care services.
Adult care services - Services to allow a disabled or elderly adult to function at home or in a center.
Adult day care - Services during the day to allow a disabled or elderly adult to function at home or in a center.
Adult foster care - See adult care services.
Advance funding - A payment to a defined benefit plan in advance of the date it is actually needed to provide benefits. Advance
funding is one of the essential characteristics of a qualified plan.
Advance notification - The advance notice an employee must give an employer when requesting a leave under the Family Medical
Leave Act of 1993 (FMLA).
After-tax contributions - Contributions to a qualified plan from an employee's pay after applicable federal, state and local taxes are
withheld.
After-tax premiums - Premium payments taken from an employee's pay after applicable federal, state and local taxes are withheld.
Age Discrimination in Employment Act (ADEA) - Provides protection against discriminatory treatment of workers 40 years of age
and older.
Age reduction schedule - Under group life or disability plans, the schedule showing when benefits stop or are reduced if an
employee reaches a particular age.
Aggregate funding method - A method of accumulating money for future payment of pension benefits whereby an actuary
determines the present value of all future benefit payments, deducts from this value whatever funds may be on hand with the
insurance company or trustee, and distributes the cost of the balance over the future on a reasonable basis.
Allergy Treatment - Medical treatment by or under the direction of a physician to determine the allergens to which a patient is
allergic, and treatment to reduce the allergic response. Treatment may include testing, evaluation, injections, or administration of
serum.
Allocation - Generally applied only in a defined contribution plan in which the employer contribution is "allocated" (credited to
participant accounts) under a stated allocation formula.
Allowable Charge - The maximum amount that a Health Benefit Plan will pay for a given Covered Service or supply. Also called
Maximum Benefit Allowance or Maximum Allowance.
Alternate payee - A spouse or former spouse with an interest in plan benefits under the terms of a Qualified Domestic Relations
Order (QDRO).
Alternative Birthing Center - Alternative birthing centers can range from free-standing centers to special areas within hospitals.
Such centers are generally known for a more comfortable, home-like atmosphere, allow more participation by the father and have
more procedural flexibility than commonly found in hospital births.
Alveoloplasty - A surgical procedure used to re-contour the supporting bone structures in preparation of a complete or partial
denture.
Amalgam - A dental filling material, composed of mercury and other metals or minerals, used to fill decayed teeth.
Ambulatory care - A general term for care that doesn't involve admission to an inpatient hospital bed.
Ambulatory care facility - A facility providing outpatient services.
Ambulatory surgery - Surgical procedures performed that do not require an overnight hospital stay. Procedures can be performed
in a hospital or a licensed surgical center. Also called Outpatient Surgery.
Amortization - The amortization of a debt is its systematic repayment through installments of principal and interest. An
amortization schedule is a periodic table illustrating payments, principal, interest, and outstanding balance.
Ancillary care - Diagnostic and/or supportive services such as radiology, physical therapy, pharmacy or laboratory work.
Anesthesia - Local anesthesia involves administering agents to achieve the loss of conscious pain in a specific part of the body.
General anesthesia involves administering agents to render the patient completely unconscious and without conscious pain
response.
Anesthetic - A drug that eliminates or reduces pain. See local anesthetic.
Anniversary date - The day after a coverage period ends under a health benefits plan. Usually, the month and day that a health
benefits plan first goes into effect becomes its anniversary date each year.
Annual enrollment - The period of time a company designates each year in which an employee may make changes in enrollment for
certain benefits.
Annual percentage rate (APR) - The Annual Percentage Rate is the cost of credit expressed as a yearly rate. The APR is a means of
comparing loans offered by various lenders on equal terms, taking into account interest rates, points, and other finance charges.
The federal Truth-in-Lending Act requires disclosure of the APR.
Annual Report (Form 5500) - Annual financial report of a pension benefit plan of welfare benefit plan. To be filed with the IRS.
Annuitant - An individual who receives payments from an annuity. The person whose life the annuity payments are measured on
or determined by.
Annuity - A contract between an insurance company and an individual which generally guarantees lifetime income to the individual
or whose life the contract is based in return for either a lump sum or periodic payment to the insurance company. Interest earned
inside an annuity is income tax-deferred until it is paid out or withdrawn.
Anterior - Refers to the teeth and tissues located towards the front of the mouth (upper or lower incisors and canines).
Apex - The tip or end of the root of the tooth.
Apicoectomy - The amputation of the apex of a tooth.
Appeals - A process used to request the health plan to reconsider a previous decision made by the Health Benefit Plan or provider.
There may be different appeal processes for members, providers, types of products, or state of issue.
Appraisal - An appraisal is an estimate of a property's value, usually real estate, at a specific point in time and as determined by a
qualified professional appraiser.
Appreciation - Appreciation is the increase in value of an asset. The term "appreciation" may be applied to real estate, stocks,
bonds, etc.
Arbitration - A process where independent persons, called "arbitrators" reach a decision that is binding upon disagreeing parties.
Arm's length - Acting at arm's length predicates that two parties negotiate with opposing economic interests.
Ask price - The price that a seller is willing to sell a security or commodity for.
Asset - Anything having commercial or exchange value and belonging to a person or organization.
Asset classes - Classes of investments such as stocks, bonds, and money market instruments.
Assignment (Retirement Plans) - Assigning benefits to someone else. Generally, qualified plan benefits cannot be assigned to
someone other than the employee or other participant. Exceptions include pension benefits affected under a Qualified Domestic
Relations Order (QDRO).
Assignment of benefits (Health Plans) - When a covered person authorizes his or her health benefits plan to directly pay a health
care provider for covered services.
Assisted living facility - Shared, supervised residence for those who cannot live independently.
Attained age - A person's age at his or her latest birthday.
Authorization - See Pre-Authorization or pre-approval.
Average Monthly Wage (AMW) or Average Indexed Monthly Earnings (AIME) - For and individual, the monthly average of all pay
credited for social security purposes (up to the taxable wage base each year), used to determine his or her social security benefit.
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Balance billing - The practice of charging full fees (which exceed either the agreed to managed care fees or the usual and
customary fees), and then billing the patient for the part of the bill (the balance) that the plan does not cover.
Balance sheet - A balance sheet is a financial statement that is divided into three major parts: assets, liabilities and shareholders'
equity.
Balloon mortgage - The terms on a balloon mortgage are insufficient to completely amortize the loan. A balloon, or lump sum,
payment is required at the maturity of the loan to completely pay off the remaining principal. Balloon mortgages often contain a
contractual opportunity to refinance when the balloon payment is due at prevailing rates.
Bank reserves - The amounts that banks are required to keep on deposit at a Federal Reserve Bank, as determined by reserve
ratios. Funds in excess of these reserves are loaned out or invested by the banks.
Bankruptcy - A federal court proceeding in which a debtor who is unable to continue to meet his/her financial obligations may be
relieved from the payment of certain debts. This action seriously affects the borrower's credit worthiness.
Basis - An amount usually representing the actual cost of an investment to the buyer. The basis amount of an investment is
important in calculating capital gains and losses, depreciation, and other income tax calculations.
Basis points - Basis Points is a term used by investment professionals to describe yields of bonds. One basis point equals one 100th
of 1%, or .01%. A bond yield increase from 10.0% to 10.1% represents an increase of 10 basis points.
Bear market - A prolonged decline in overall stock prices occurring over a period of months or even years.
Before-tax contributions - Premium payments taken from an employee's pay before federal, state and local taxes are withheld.
Behavioral care services - Assessment and therapeutic services used in the treatment of mental health and substance abuse
problems.
Beneficiary - The person who is designated to receive the benefits of a contract.
Benefit duration period - The benefit duration period begins when the person has become disabled as defined under the plan and
has met any waiting period, and ends when the maximum length of time to receive benefits is reached.
Benefit formula - The combination of factors, such as length of service, job classification, and salary, that determines the amount
of benefits to be paid under a benefit plan.
Benefit period - The period of time for which a plan pays benefits for Covered Services rendered while the Contract was in effect.
Benefit statement - Participant's individualized (usually computer-posted or laser-printed) statement, covering employer-provided
benefits.
Benefits - Covered Services to which the Member is entitled under the terms of the policy. Benefit payments may be paid to the
Member (or Subscriber), or on his behalf, to the medical provider.
Benefits package - A term informally used to refer to the employer's benefits plan or to the benefits plan options from which the
employee can choose.
Bereavement leave - Time taken off work due to a death.
Beta - A statistically generated number that is used to measure the volatility of a security or mutual fund in comparison to the
market as a whole.
Bicuspid - A two-cusped tooth found between the molar and the cuspid also known as an eye tooth or canine tooth.
Bid price - The price that a buyer is willing to pay for a security or commodity.
Biopsy - A process of removing tissue to determine the existence of pathology.
Birth control pills and devices - Pills and devices designed to prevent conception of a fetus, or to prevent implantation of a fertilized
egg.
Birthday rule - In plans that follow the birthday rule, if both spouses and/or their children are each covered by their own employerprovided health care plans, the plan covering the parent whose birthday falls first in the calendar year pays benefits first (is the
"primary plan") regardless of which parent is older. If both parents have the same birthday, the plan that has covered the person
the longest pays first.
Birthing center - A center which provides prenatal, delivery and postpartum care, is staffed by certified nurse-midwives, and meets
the plan's requirements as well as accreditation and state licensing.
Bitewing x-rays - X-rays taken of the crowns of teeth to check for decay.
Bleaching - The technique of applying a chemical agent, usually hydrogen peroxide, to the teeth to whiten them.
Blood - For medical plans that cover blood, the term may include whole blood, blood plasma, and other blood products.
Blue-chip stocks - The equity issues of financially stable, well-established companies that usually have a history of being able to
pay dividends in bear and bull markets.
Board-certified - Any physician who has completed medical school, internship and residency in his or her chosen specialty and has
successfully completed an examination conducted by a group (or board) of peers.
Bond - A certificate of indebtedness issued by a government entity or a corporation, which pays a fixed cash coupon at regular
intervals. The coupon payment is normally a fixed percentage of the initial investment. The face value of the bond is repaid to the
investor upon maturity.
Bonding - A process to chemically etch the tooth's enamel to better attach (bond) composite filling material, veneers, or
plastic/acrylic.
Bonding requirement - The individual(s) that are appointed to run the day-to-day operations of a qualified plan, as well as the
trustee(s) and investment managers must be bonded. The bond is required to provide protection to the plan against loss due to
fraud, theft, forgery or dishonesty.
Bone loss (Dental) - The breakdown and loss of the bone that supports the teeth, usually caused by infection or long-term occlusal
(chewing areas of the teeth) stress.
Book value - The value that belongs to a company's owners or shareholders after total liabilities have been subtracted from total
assets. Also called shareholders equity.
Brand-name drug - A drug manufactured by a pharmaceutical company which has chosen to patent the drug's formula and register
its brand name.
Break in service - An interruption in employment that affects the employee's benefits.
Bridge - A nonremovable restoration that is used to replace missing teeth.
Bridgework - Fixed bridgework is a partial denture held in place with crowns or inlays cemented to natural teeth, and used as an
abutment. Fixed-removable bridgework can be removed by the dentist but not the patient. Removable bridgework is a partial
denture held in place by attachments, which the patient can remove.
Bull market - A prolonged increase in overall stock prices—usually occurring over a period of months or even years.
Burial - Interment of physical remains.
Business travel accident insurance - Limited coverage for accidents that occur while traveling on company business. Usually covers
all accidents while an employee is away from home (not merely those directly connected with travel).
Buy-down - A buy-down refers to the payment of additional discount points in return for a below market interest rate (and
therefore a lower monthly payment) on a home mortgage.
Buy-sell agreement - An agreement between shareholders or business partners to purchase each others' shares in specified
circumstances.
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Caesarian section - Childbirth by surgical removal of the baby.
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Cafeteria plan - An employee benefit plan that gives employees a choice among cash and one or more qualified benefits, such as
health insurance, group term life and dental benefits.
Calculus - The hard deposit of mineralized plaque that forms on the crown and/or root of the tooth. Also referred to as tartar.
Calendar year deductible - The deductible that applies for a plan that counts the deductible based on a calendar year.
Call to active duty - A summons to active military service.
Canine tooth - The second tooth from the big front tooth, commonly called the eye tooth or cuspid.
Cap - Another term for crown.
Capital markets - A general term encompassing all markets for financial instruments with more than one year to maturity.
Capital stock - All ownership shares of a company, both common and preferred listed at par value.
Capitation - A predetermined, fixed amount that is paid to a health care provider for each person served under the plan, without
regard to the number of visits or extent of services that will be required. (The provider assumes financial risk for providing health
care services.) HMO's are reimbursed on a "per capita" (capitated) basis.
Cardiac/pulmonary treatment - Treatment of illness or injury affecting the heart and lungs.
Care management - Care Management refers to an initiative that takes a global approach to medical care from prevention through
treatment and recovery.
Career average pay - One definition of pay that is used as a basis for determining benefits under a defined benefit pension plan.
Normally, the average of the employee's pay from date of employment to date of retirement. In some cases, the starting date for
the averaging period may be the employee's eligibility date, the effective date of the plan, or the effective date of a plan
amendment.
Caries - The correct technical term for decay which is the progressive breaking down or dissolving of tooth structure, caused by the
acid produced when bacteria digest sugars.
Carrier - A term historically used for licensed insurance companies, although now is sometimes used to include both licensed
insurers and HMOs.
Carryover deductible - A deductible that applies when a participant is eligible for continuation coverage under COBRA due to a
"qualifying event" such as divorce or termination of employment. The carryover deductible is the deductible payable under the
COBRA continuation coverage and that includes the part of the deductible satisfied before the qualifying event.
Case management - Coordination of services to help meet a patient's health care needs, usually when the patient has a condition
which requires multiple services from multiple providers. This term is also used to refer to coordination of care during and after a
hospital stay.
Cash balance plan - See account balance plan.
Cash equivalents - Investments, such as money market funds and treasury bills, of such high quality and liquidity that they are
considered virtually the same as cash.
Cash or deferred arrangement (CODA) - Provision under Section 401(k) of the Internal Revenue Code whereby contributions may
be made by employees through salary reduction such that the contribution dollars are not taxed until the money is withdrawn.
Also applies to profit sharing plans where an employee may elect to take the employer contribution in current (taxable) cash or
have it deferred (nontaxable) into a trust.
Cash value or cash surrender value - Under group universal life insurance and other life insurance policies (other than term
insurance), cash value is the amount the insurer would return to the policyholder if the policy were cancelled. Some policies allow
loans against cash values.
Catch-up contributions - See accelerated contributions.
Cavity - A layman's term for tooth decay. Also, the dental term for the hole that is left after decay has been removed.
Cement - A special type of glue used to hold a crown in place. It also acts as an insulator to protect the tooth's nerve.
Cementum - The very thin, bonelike structure that covers the root of the tooth.
Center of excellence - A facility named as a preferred place to have certain very specialized services performed, such as organ
transplants.
Certificate of deposit (CD) - A Certificate of Deposit is a low risk, often federally guaranteed investment offered by banks. A CD
pays interest to investors for as long as five years. The interest rate on a CD is fixed for the duration of the CD term.
Charge amount - The amount billed by a provider for services rendered to a participant.
Charitable deductions - Amounts deducted from a paycheck and/or IRS tax forms for contributions to charitable organizations.
Charitable remainder trust (CRT) - The Charitable Remainder Trust is an irrevocable trust with both charitable and non-charitable
beneficiaries. The donor transfers highly appreciated assets into the trust and retains an income interest. Upon expiration of the
income interest, the remainder in the trust passes to a qualified charity of the donor's choice. If properly structured, the CRT
permits the donor to receive income, estate, and/or gift tax advantages. These advantages often provide for a much greater
income stream to the income beneficiary than would be available outside the trust.
Chemical dependency - Both alcoholism and drug dependency as classified by the International Classification of Diseases of the
U.S. Department of Health and Human Services.
Chemotherapy - Treatment of a malignant disease by chemical or biological antineoplastic agents.
Chiropractor - A Doctor of Chiropractic (D.C.) who performs chiropractic services.
Chiropractic care or services - Services provided by a licensed Chiropractor under a system of medicine based on the theory that
disease is caused by malfunction of the nervous system, and that normal function can be restored by spinal manipulation and other
treatment.
Circumcision - Surgery to remove the foreskin of a newborn male.
Civil litigation - A lawsuit in civil, rather than criminal, court.
Claim - A request for payment of benefits under the terms of a health benefits plan.
Claim reserve - An amount set aside in a group insurance plan for both continuing and unreported claims.
Claim status - Claims are Paid, Pended, Denied, or Received-Not-Yet-Processed.
Claims administrator - The company that reviews plan claims and determines whether they meet the Plan Document's terms for
payment.
Claim form - The form used to file for benefits under a health plan.
Claimant - The person who files a claim for benefits.
Claims procedure - The procedure under the Employee Retirement Income Security Act of 1974, as amended (ERISA) for filing
claims under a qualified plan, and for requesting an appeal of denied claims.
Class year plan - One in which each year's contributions vest separately. Each year's employer contributions must be 100% vested
no later than the end of the fifth plan year following the plan year for which the contributions are made. After December 31, 1988,
these plans were subject to the 1986 Tax Reform Act vesting rules.
Clenching - The forceful holding together of the upper and lower teeth, which places stress on the ligaments that hold the teeth to
the jawbone and the lower jaw to the skull.
Cliff Vesting - Retirement plan provision under which the participant is not vested until fulfilling a certain number of years of
service. After attaining the required number of years of service, the participant automatically becomes 100% vested.
Clinical Practice Guidelines - General procedures and suggestions about what constitutes an acceptable range of practices for
particular diseases or conditions. These guidelines are usually developed by a consensus of doctors in a given field.
Closed-end fund - A fund whose value is held within a fixed number of shares. Until the fund is wound up, shares can be bought
and sold on the stock exchange or the over-the-counter market.
Co-borrower - A co-borrower is individually or jointly obligated to repay a loan entered into with a third party. The co-borrower
may or may not share in ownership of loan collateral.
COBRA - See Consolidated Omnibus Budget Reconciliation Act.
Codicil - An instrument in writing executed by a testator for adding to, altering, explaining or confirming a will previously made by
the testator; executed with the same formalities as a will; and having the effect of bringing the date of the will forward to the date
of codicil.
CODA - See cash or deferred arrangement.
Cognitive service - Diagnostic services a doctor provides during delivery of medical services, consultations or care.
Coinsurance - A method of paying for covered health services in which a portion of covered expenses are shared by the health
benefits plan and the participant. Coinsurance is a defined percentage of the covered charges for services rendered, and is
normally payable only after the deductible has been met. For instance, a health plan may pay 80% of the reasonable and
customary cost of covered services, and a participant pays 20%.
COLA - See cost of living adjustment.
Collateral - Assets pledged as security for a loan. If the borrower defaults on payment, the lender may dispose of the property
pledged as security to raise money to repay the loan.
Collectively bargained plan - An employee benefit plan maintained pursuant to a collective bargaining agreement between a union
and an employer.
Collective bargaining agreement or contract - A formal agreement over wages, hours and other conditions of employment entered
into between an employer and one or more employee unions.
Commercial paper - Short-term loans from 2 to 270 days, issued by organizations and often backed by bank lines of credit.
Commission - The fee a broker or insurance agent collects for administering a trade or policy.
Commodity - A commodity is a physical substance such as a food or a metal which investors buy or sell on a commodities
exchange, usually via futures contracts.
Common stock - A security that represents ownership in a corporation.
Community leave - Time off from the job to perform community service.
Company match, company matching contributions - See match or matching contributions.
Comparable Worth - The doctrine that men and women who perform work of the same "inherent value" should receive comparable
compensation. According to this doctrine, jobs have an inherent value that can be compared across different types of jobs.
Compensation (pay) - Benefits, or contributions, are often related to pay or to pay and service. Pay may be defined to include
base pay only, or base pay plus overtime, bonuses, etc. There are rules governing what definitions of pay are to be used for plan
contributions and nondiscrimination testing.
Compensatory time cash out - Overtime hours that are worked, then converted to paid time off, and then cashed out rather than
taken as time off.
Complex rehabilitation - The extensive dental restoration involving 6 or more units of crown and/or bridge in the same treatment
plan, using full crowns and/or fixed bridges which are cemented in place. The dentist will rebuild natural teeth, filling spaces where
teeth are missing and establish conditions which allow each tooth to function in harmony with the occlusion (bite).
Composite - A tooth-colored filling made of plastic resin or porcelain.
Compound interest - Interest earned both on the principal investment and also on the previously-earned interest.
Compounding - The computation of interest paid using the principal plus the previously earned interest.
Conduit IRA - An individual who rolled over a total distribution from a qualified plan into an IRA can later roll over those assets into
a new employer's plan. In this case the IRA has been used as a holding account (a conduit).
Conforming loan - A mortgage loan that conforms to Federal National Mortgage Association (FNMA) or Federal Home Loan
Mortgage Corporation (FHLMC) guidelines. Currently, conforming first mortgages are under $275,000 ($413,000 in Alaska and
Hawaii).
Conduit IRA - An individual retirement account set up to hold tax-deferred amounts from another employer's qualified plan.
Consolidated Omnibus Budget Reconciliation Act (COBRA) - A federal statute that requires most employers to offer to covered
employees and covered dependents (who would otherwise lose health coverage for reasons specified in the statute), the
opportunity to purchase the same health benefits coverage that the employer provides to its other covered employees. This
continuation of coverage can only last for a maximum specified period of time (usually 18 months for employees and dependents
who would otherwise lose coverage due to loss of employment or work hour reduction, or 36 months for dependents who would
lose coverage for certain reasons other than employment loss by the employee).
Construction loan - A construction loan is a short term loan applied to the construction of a new home. The builder gradually
withdraws the loan proceeds and the home serves as collateral on the loan.
Constructive receipt - A tax term referring to a situation in which a taxpayer is taxed on amounts he or she did not actually receive,
but had the legal right to receive.
Consultation (Dental) - A diagnostic service provided by a dentist other than the treating dentist.
Consultation (Medical) - A discussion with another health care professional when additional feedback is needed during diagnosis or
treatment. Usually, a consultation is by referral from a primary care physician.
Consumer debt - Debt incurred for consumable or depreciating non-investment assets. Items include credit card debt, storefinanced consumer purchases, car loans, and family loans that will be repaid.
Consumer Price Index (CPI) - A measurement of the relative prices of a selected group goods and services that typify those bought
by urban families at various times. Determined by the U.S. Department of Labor.
Contingent beneficiary - The person named to receive death benefits only if no primary beneficiaries are living when the insured
person dies.
Continued employment clause - A provision that requires an employee to remain employed in order for coverage to continue, or for
an employee to be eligible for a contribution.
Contraception - Voluntary prevention of conception or pregnancy.
Contract - An agreement between an individual Subscriber or an employer group and a Health Benefit Plan that describes the
duties of each party, including the benefits and limitations of the coverage. One Subscriber could have two contracts (policies) one for health and one for dental. Can also be called a Benefit Certificate or Policy. The Contract may include more than one
document, such as a master group policy, a Benefit certificate, amendments, policies and procedures, or applications.
Contribution - A general term used to designate any payment made by an employer or an employee to an employee benefit plan.
Contributions finance benefits.
Controlled group company - A company of which the employee's company directly or indirectly owns 80% or more of the voting
stock, or another company that is required to be considered a controlled group company under the Internal Revenue Code of 1986,
as amended.
Conventional mortgage - A conventional mortgage is not insured, guaranteed or funded by the Veterans Administration, the
Federal Housing Administration, or Rural Economic Community Development.
Conversion privileges - A privilege given to a participant to convert group insurance to an individual insurance policy, without
evidence of insurability, upon termination of employment.
Convertible mortgage - A convertible mortgage is an adjustable mortgage (ARM) that allows the borrower to convert to a fixed rate
mortgage during a specified period of time.
Convertible term insurance - Term life insurance that can be converted to a permanent or whole life policy without evidence of
insurability, subject to time limitations.
Coordination of benefits (COB) - The provision which applies when a Member is covered by multiple Health Benefit Plans at the
same time. The provision designates the order in which the multiple health plans are to pay benefits. Under a COB provision, one
plan is determined to be primary and its benefits are applied to the claim first. The unpaid balance is usually paid by the secondary
plan to the limit of its responsibility. Benefits are thus "coordinated" among all of the Health Benefit Plans.
Copayment - A flat dollar amount that a participant pays for a certain medical service (such as an office visit) as the participant's
share of the cost. Copayments may apply in addition to deductibles and coinsurance.
Corporate-Owned Life Insurance (COLI) - Whole life insurance or universal life insurance owned by the employer and payable to
the employer, as a corporate investment. Often purchased to finance the cost of nonqualified retirement or deferred compensation
benefits.
Corporation - A legal business entity created under state law. Because the corporation is a separate entity from its owners,
shareholders have no legal liability for its debts.
Correction - A sudden decline in stock or bond prices after a period of market strength.
Co-signer - An individual or party who agrees to assume a debt obligation of a third party in the event the principal borrower
defaults on the terms of the loan.
Cosmetic dentistry - Any dental treatment or repair that is solely rendered to improve the appearance of the teeth or mouth.
Cost of living adjustment (COLA) - An across-the-board change in wages or pension benefits to reflect the rise or fall in the cost of
living as measured by an index such as the Consumer Price Index (CPI).
Coupon rate - The rate of interest paid on a bond, expressed as a percentage of the bond's par value.
Coverage - The benefits that are provided according to the terms of a participant's specific benefits plan.
Covered dependent - A person other than the employee who is covered under an employee's benefit plan.
Covered expense - An expense that meets all the rules to be covered by a plan.
Covered person - A person who is covered under a plan.
Covered provider - A service provider eligible to provide covered services and receive payment under a plan.
Covered services - Hospital, medical, and other health care services and supplies provided to a Member for which Benefits are paid
under a Contract.
CPI - See Consumer Price Index.
Credentialing - A process that reviews a health care provider's credentials against the credentials required to participate in a
managed care network.
Credit cards - Cards such as Visa and MasterCard allow the holder to charge purchases rather than pay cash.
Credit bureau repositories - A credit bureau repository is an organization that compiles credit history information directly from
lenders and creditors into credit summaries and reports. These reports are made available to lenders and creditors to assist them
in gauging an individual's credit worthiness.
Credit rating - The result of a formal investigation into a person's or corporation's credit history, creditworthiness and ability to
repay debts.
Credit union - A not-for-profit financial institution formed to serve members of a group.
Cremation - The process by which physical remains are converted to ash for dispersal or burial.
Critical Care - Health care provided to acutely ill patients during a medical crisis, such as in an intensive care unit or coronary care
unit.
Critical illness insurance - Insurance protection designed to provide a lump-sum payment equal to the full value of the policy or a
percentage of the policy depending upon the product design, to the insured/policy owner upon the diagnosis of a covered critical
illness. Typical illnesses covered include heart attack, stroke, cancer, paralysis, renal failure and Alzheimer's disease. Many
policies offer a partial payment for certain medical procedures such as coronary bypass surgery or angioplasty. Some policies offer
a return of all premiums in the event of death of the insured, others pay the full benefit upon the insured's death.
Crown - The portion of a tooth that is covered by enamel. Also a dental restoration that covers the entire tooth and restores it to its
original shape.
Crown lengthening - A surgical procedure exposing more tooth for restorative purposes.
Curettage - A deep scaling of that portion of the tooth below the gum line, which is done to remove calculus and infected gum
tissue.
Currency risk - The level of risk when investing in international markets, due to the fluctuations in exchange rates of the various
world currencies. Investing in any foreign country should be preceded by a careful estimation of how well its currency is likely to do
against the dollar.
Cuspid - See canine tooth.
Cusp(s) - The protruding portion(s) of a tooth's chewing surface.
Custodial care - Care which is provided primarily to help meet the personal daily living needs of the patient. Custodial Care does
not require the continuous attention of skilled medical or paramedical personnel. Such care includes help in walking, bathing,
dressing, preparing food or special diets, feeding, administering medicine or any other care which does not require the continuous
attention of skilled medical or paramedical personnel.
Custodian - A financial institution, usually a bank or trust company, that holds a person or company's cash and or securities in
safekeeping.
Cyclical companies - Companies that report strong earnings when the overall economy is doing well and weaker earnings when the
economy is in recession.
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Daily benefit - The maximum amount of money a participant will be paid for each day covered services are received.
Date of Service - The date the service was actually provided to the participant.
Day Treatment Center - An outpatient psychiatric facility or Hospital which is licensed to provide outpatient care and treatment of
mental or nervous disorders or substance abuse under the supervision of physicians. The treatment is typically provided for more
than two hours but less than 24 hours/day. This treatment may also be known as "partial hospitalization".
DDS - Doctor of Dental Surgery, a degree given to dental school graduates.
Death benefit - The payment made to beneficiaries upon the death of a participant.
Debenture - A bond secured only by the issuer's promise (not backed by specific collateral).
Debt collection defense - Legal services provided to a legal services plan participant to help deal with the claims of creditors.
Debt markets - The fixed income sector of the capital markets devoted to trading debt securities issued by corporations and
governments.
Debt to income ratio - The ratio of a person's total monthly debt obligations compared to their total monthly resources is called
their debt to income ratio. This ratio is used to evaluate a borrower's capacity to repay debts.
Decay - See caries.
Decedent - The term decedent refers to a person who has died.
Decreasing term - A term life insurance featuring a decreasing death benefit. Decreasing term is well suited to provide for an
obligation that decreases over the years such as a mortgage.
Deciduous - See primary teeth.
Deductible - A cost sharing feature in which the Member pays a fixed dollar amount prior to being eligible for payment for some or
all Covered Services.
Deductible carryover - A feature under some health care plans where covered charges incurred near the end of a year (such as in
the last three months) may be carried over to be counted toward the next year's deductible.
Deed of trust - A document used to convey title (ownership) to a property used as collateral for a loan to a trustee pending the
repayment of the loan. The equivalent of a mortgage.
Deferral - A form of tax sheltering in which all earnings are allowed to compound tax-free until they are withdrawn at a future date.
Placing funds in a qualified plan, for example, triggers deductions [not all qualified plans provide for tax deductions; contributions
may, however, be excluded from gross income, i.e. 401(k) plans for the current tax year and postpones capital gains or other
income taxes until the funds are withdrawn from the plan.
Deferred annuity - An annuity under which payments will begin at some definite future date, such as in a specified number of years
or at a specified age.
Deferred compensation - Income withheld by an employer and paid at some future time, usually upon retirement or termination of
employment.
Deferred retirement - The postponement of retirement past the age specified in the plan as the normal retirement age.
Defined benefit plan - A defined benefit plan pays participants a specific retirement benefit that is promised (defined) in the plan
document. Under a defined benefit plan benefits must be definitely determinable. For example, a plan that entitles a participant to
a monthly pension benefit for life equal to 30 percent of monthly compensation is a defined benefit plan.
Defined contribution plan - In a defined contribution plan, contributions are allocated to individual accounts according to a predetermined contribution allocation. This type of plan does not promise any specific dollar benefit to a participant at retirement.
Benefits received are based on amounts contributed, investment performance and vesting. The most common type of defined
contribution plan is the 401(k) profit-sharing plan.
Deflation - A period in which the general price level of goods and services is declining.
Denied claim - Claims that are not issued a bank draft/remittance due to a specific reason code.
Dental floss - A thin, nylon string, waxed or unwaxed, that is inserted between the teeth to remove food and plaque.
Dental hygienist - A trained and licensed dental professional specializing in cleaning the teeth by removing plaque, calculus, and
diseased gum tissue. He/She acts as the patient's guide in establishing a proper oral hygiene program.
Dentin - The part of the tooth that is under both the enamel which covers the crown and the cementum which covers the root.
Dentist - A person trained and licensed to practice dentistry.
Denture - A removable appliance used to replace teeth. A complete denture replaces all of the upper teeth and/or all the lower
teeth. See also partial denture.
Department of Labor (DOL) - The department that administers the administrative and regulatory portions of ERISA.
(http://www.dol.gov/).
Dependent - A person eligible for coverage under an employee benefits plan because of that person's relationship to an employee.
Spouses, children and adopted children are often eligible for dependent coverage.
Dependent care flexible spending account (dependent care FSA) - An employer plan that allows employees to set aside before-tax
contributions from their paychecks to pay the cost of care for eligible dependents.
Dependent life insurance - Insurance covering the life of an eligible dependent, such as a spouse or child.
Deposit Administration (DA) contract - An insurance contract under which all contributions are placed in an allocated fund that
accumulates interest. When an employee retires, funds are withdrawn from the fund and are used to purchase a single, premium
immediate annuity in an amount sufficient to provide the employee's benefit.
Depreciation - Charges made against earnings to write off the cost of a fixed asset over its estimated useful life. Depreciation does
not represent a cash outlay. It is a bookkeeping entry representing the decline in value of an asset over time.
Designated Centers for Specialized Care - Medical centers selected to provide an advanced level of care for a disease or delivery of
a specific procedure.
Diagnostic Services - Tests and procedures ordered by a physician to determine if the patient has a certain condition or disease
based upon specific symptoms demonstrated by the patient. Such diagnostic tools include but are not limited to radiology,
ultrasound, nuclear medicine, laboratory, pathology services or tests.
Direct compensation - As opposed to indirect compensation, all forms of compensation that involve direct and immediate payment
to the individual, often including a base wage or salary payment.
Direct deposit - A means of authorizing payment made by governments or companies to be deposited directly into a recipient's
account. Used mainly for the deposit of salary, pension and interest checks.
Direct pulp cap - The procedure in which the exposed pulp is covered with a dressing or cement that protects the pulp and
promotes healing and repair.
Direct roll-in - An amount the employee has transferred directly to the current company's retirement plan from a former employer's
qualified plan or from a conduit IRA. A direct roll-in contribution generally does not require tax withholding.
Direct rollover - A payout of tax-deferred retirement plan money directly from the trustee of a qualified plan to the trustee of
another qualified plan or an individual retirement account. A direct rollover does not incur taxes or penalties.
Disability - A condition that makes an employee incapable of performing some or all of the duties of his or her job. Definitions of
disability vary by the type of plan and insurer.
Disability insurance - Insurance against income lost due to the participant becoming disabled as defined by the plan.
Disability retirement benefit - Periodic payment (usually monthly) made to a participant under some retirement plans if the
participant is eligible and becomes totally and permanently disabled before the normal retirement date.
Discharge planning - Identifying a patient's health care needs after discharge from inpatient care.
Discrimination - Benefits or contributions that favor officers, stockholders, or highly compensated employees to a degree that is
prohibited under the law. "Discrimination" may also refer to discrimination by sex, age, marital status, etc.--that is prohibited by
law.
Disease Management - An educational program geared toward Members with chronic disease or other medical conditions, to help
Members better understand and manage their condition.
Disenrollment - Voluntarily terminating one's participation in a benefits plan.
Dismemberment - The loss, or loss of use of, a limb or function such as vision.
Disposable income - After-tax income available for spending, saving or investing.
Distribution - Generally refers to any payouts from a retirement plan. May be in the form of a lump sum or installments.
Diversification - Spreading investment risk among a number of different securities, properties, companies, industries or
geographical locations. Diversification does not assure against market loss.
Dividend Reinvestment Plan (DRIP) - An investment plan that allows shareholders to receive stock in lieu of cash dividends.
Dividends- A distribution of the earnings of a company to it's shareholders. Dividends are "declared" by the company based on
profitability and can change from time to time. There is a direct relationship between dividends paid and share value growth. The
most aggressive growth companies do not pay a dividend, and the highest dividend paying companies may not experience
dramatic growth.
DMD - Doctor of Dental Medicine, a degree given to dental school graduates.
DOL - see Department of Labor.
Dollar cost averaging - Buying a mutual fund or securities using a consistent dollar amount of money each month (or other period).
More securities will be bought when prices are low, resulting in lowering the average cost per share.
Dollar cost averaging neither guarantees a profit nor eliminates the risk of losses in declining markets and you should consider
your ability to continue investing through periods of market volatility and/or low prices.
Domestic partner, domestic partnership dependent - A person who is unrelated to the employee by blood or marriage and is not
legally married to the employee. Plans that provide coverage for domestic partners generally require certification of the partner.
Down payment - The down payment on a property is the amount of cash applied to the purchase, with the remainder of the
purchase accomplished through a mortgage or other debt.
Drug Formulary - A list of preferred pharmaceutical products developed in consultation with physicians and pharmacists.
Drug Utilization Review (DUR) - A system that reviews prescriptions to identify potential interactions with other drugs, and
proposes alternative treatments.
Dry socket - A localized inflammation of the tooth socket following an extraction due to infection or loss of a blood clot.
Duplicate coverage - When a person has coverage for the same health services under more than one health benefits plan.
Durable Medical Equipment (DME) - Equipment that meets all of the following criteria: a) can withstand repeated use; b) is used
only to serve a medical purpose; c) is appropriate for use in the patient's home; d) is not useful in the absence of illness, injury or
disease; and e) is prescribed by a physician. Durable Medical Equipment does not include fixtures installed in a Member's home or
real estate.
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EAP - See Employee Assistance Program.
Early distribution - A distribution taken from a pension plan before the participant reaches age 59-1/2, assuming the participant
has not died or become disabled. Early distributions are generally subject to a 10% penalty tax.
Early retirement - When a participant retires after becoming eligible for a pension benefit but before reaching normal retirement
date. Generally, the early retirement pension is a reduced percentage of the normal retirement pension.
Early retirement date - The earliest date a retirement plan participant may begin to receive benefits.
Earnest money - Similar to a deposit, earnest money is the money given by the buyer to the seller of a property as an assurance of
their intentions to purchase the property.
Earnings per share (EPS) - Total net profits divided by the number of outstanding common shares of a company.
Earnings test - A test to determine if an individual's social security benefits must be reduced because of other income. In 1990, an
individual's social security benefits are reduced if earned income exceeds $9,360 (if age 65 or older and under age 70), or $6,840
(if under age 65).
Economic cycle - Economic events are often felt to repeat a regular pattern over a period of anywhere from two to eight years. This
pattern of events ends to be slightly different each time, but usually has a large number of similarities to previous cycles.
Educational assistance program - A plan that allows employers to provide employees with tax-free assistance for eligible education
expenses.
Effective Date - The date on which coverage under a benefits plan begins.
Effective tax rate - The percentage of total income paid in federal and state income taxes.
Efficient market - The market in which all the available information has been analyzed and is reflected in the current stock price.
Elapsed time method - A way of counting a participant's service that involves subtracting the hire date from the termination date.
Elder care - Support for participants and their disabled or elderly relatives. This can include referral services and adult day care.
Elective care - Care that can be postponed for the number of days defined by the health care plan without undue risk to the
patient.
Eligibility period - The period of time that eligible participants can enroll in a plan, without providing evidence of insurability.
Eligibility requirements - Conditions imposed by the terms of a plan for an employee's eligibility to participate in the plan. There
requirements can require an employee to complete some minimum period of service and attain some minimum age. Many plans
also relate eligibility to the type of work performed by an employee, or to the nature or amount of his or her compensation.
Eligible adoption leave - Time off due to adoption or placement of a child for adoption.
Eligible compensation - The part of an employee's pay used to determine a pay-based benefit.
Eligible dependent - A person other than the employee who is eligible to be covered under an employee's plan.
Eligible employee - An employee who is eligible to be covered under a plan.
Eligible expenses - Expenses that meet all requirements to be covered under a plan.
Eligible rollover distribution - The part of a retirement plan payment that can be rolled over to an individual retirement accountor to
another qualified plan that accepts rollovers. This does not include dividends from an Employee Stock Ownership Plan, or after-tax
contributions to a 401(k) plan.
Emergency - An accident or sudden illness that a person with an average knowledge of medical science believes needs to be
treated immediately or it could result in loss of life, serious medical complications or permanent disability.
Examples of emergency situations include: uncontrolled bleeding, seizure or loss of consciousness, shortness of breath, chest pain
or squeezing sensations in the chest, suspected overdose of medication or poisoning, sudden paralysis or slurred speech, severe
burns, broken bones or severe pain.
Emergency and short term child care services - Employer-supported services designed to provide temporary care for a child when
the child's regular caregiver becomes unavailable.
Emergency Care - Health care services that are provided in an emergency facility or setting after the onset of an illness or medical
condition that manifests itself by symptoms of sufficient severity that without medical attention could be reasonably expected by
the prudent lay person, who possesses an average knowledge of health and medicine, to result in: a) placing the member's
physical and/or mental health in serious jeopardy; b) serious impairment to bodily functions; c) or serious dysfunction of any bodily
organ or part.
Emergency medical evacuation - Emergency removal of a patient from one place to another for treatment (such as by helicopter)
when either the patient's condition or the patient's location or situation do not permit timely transport by ambulance.
Emergency room - A hospital area equipped and staffed for the prompt treatment of acute illness, trauma, and other medical
emergencies.
Employee Assistance Program (EAP) - An employment-based, short-term counseling program designed to help employees cope
with issues such as work/life balance, stress, family violence and grief. The plan may offer employees counseling assistance by
telephone, and may also cover follow-up visits with counselors, if needed.
Employee benefit plan - Under ERISA, a pension benefit plan or a welfare benefit plan maintained by an employer (or a group of
employers).
Employee Retirement Income Security Act (ERISA) - Federal legislation that applies to retirement programs and employee welfare
benefit programs established or maintained by employers and unions.
Employee stock ownership plans (ESOPs) - An ESOP plan allows employees to purchase stock, usually at a discount, that they can
hold or sell. ESOPs offer a tax advantage for both employer and employee. The employer earns a tax deduction for contributions of
stock or cash used to purchase stock for the employee. The employee pays no tax on these contributions until they are distributed.
Enamel - The hard, calcified (mineralized) portion of the tooth which covers the crown.
Endodontics - The dental specialty that deals with injuries to or diseases of the pulp, or root, or nerve of the tooth.
End stage renal disease - The stage of kidney dysfunction that is nearly always permanent, in which the patient needs dialysis or a
kidney transplant to survive.
Entry age actuarial cost method - A process that allocates pension cost on a level annual basis from the employee's assumed entry
into the plan until his or her retirement.
EOB - See explanation of benefits.
EOI - See evidence of insurability.
Equal Employment Opportunity Commission (EEOC) - A commission of the federal government charged with enforcing the
provisions of the Civil Rights Act of 1964. In addition, the commission is charged with enforcing the provisions of the Equal Pay Act
of 1963. (See Comparable worth.)
Equal Pay Act of 1963 - An amendment tot he Fair Labor Standards Act of 1938, prohibiting pay differentials on jobs that are
essentially equal in terms of skill, effort, responsibility, and working conditions, except when they are the result of bona fide
seniority, merit or production-based pay systems, or any other job-related factor other than sex.
Equities - Ownership of property, usually in the form of common stocks, as distinguished from fixed income-bearing securities,
such as bonds or mortgages.
Equity - Anything of value earned through the provision or investment of something of value. In the case of compensation, an
employee earns equity interest through the provision of labor on a job. So defined, equity is often used as a fairness criterion in
compensation. People should be paid according to their contributions.
ERISA - See Employee Retirement Income Security Act.
ERISA excess plan - Nonqualified retirement plan with the sole purpose of making up for benefits lost from tax-qualified retirement
plans because of Code Section 415 limits.
ERISA rights statement - A statement notifying participants of their rights under ERISA. Must be included in an SPD. Acceptable
language (as defined by ERISA) may be modified to suit the intended audience.
Escrow funds - Escrow funds are funds accumulated and held in an account for the periodic payment of property taxes and
insurance.
ESOP - See Employee Stock Ownership Plan.
Estate - A decedent's estate is equal to the total value of their assets as of the date of death. The estate includes all funds,
personal effects, interest in business enterprises, titles to property, real estate, stocks, bonds and notes receivable.
Estate planning - The orderly arrangement of one's financial affairs to maximize the value transferred at death to the people and
institutions favored by the deceased, with minimum loss of value because of taxes and forced liquidation of assets.
Eviction defense - Legal services to help participants defend against being evicted from their homes.
Evidence of insurability (EOI) - Proof of health, employment or other factor required before beginning or increasing insurance or
insurance amounts, or when selecting a settlement option.
Euthanasia - Painless putting to death, or allowing to die.
Excess distributions - An individual may have to pay a 15% tax on distributions received from qualified plans in excess of $150,000
during a single year. The tax, however, does not apply to distributions due to death, distributions that are rolled over, and
distributions of after-tax contributions.
Excision - Surgical removal of bone or tissue.
Exclusions - Specific conditions or circumstances that are not covered under the Health Benefit Plan. It is very important to consult
the Health Benefit Plan to understand what services are not Covered Services.
Exclusion allowance - A way to calculate how much compensation a participant can exclude from income and contribute to a tax
sheltered annuity.
Exclusive Provider Organizations (EPOs) - Medical insurance arrangements in which employees must use EPO-designated providers
to receive coverage.
Executive retirement planning - Retirement planning services for executives, which may involve planning to accumulate assets for
retirement or to time a retirement plan distribution.
Executor - The person named in a will to manage the estate of the deceased according to the terms of the will.
Exempt job - A job not subject to the provisions of the Fair Labor Standards Act with respect to minimum wage and overtime.
Exempt employees include most professionals, administrators, executives, and outside sales representatives.
Exercise period - For stock options, the price at which the holder has the right to convert the options to stock.
Exercise price - For stock options, the price at which the holder has the right to convert the options to stock.
Experience rating - Method of calculating insurance rates based on a group's prior claims experience.
Experimental/Investigational Procedures - Any treatment, procedure, drug, supply or service that does not meet standard
treatment criteria as described in the Health Benefit Plan.
Expiration Date - The date on which coverage under the Benefit Plan expires.
Explanation of benefits (EOB) - A statement provided by the health benefits administrator that explains the benefits provided, the
allowable reimbursement amounts, any deductibles, coinsurance and other adjustments taken, and the net amount paid. A
participant typically receives an explanation of benefits with a claim reimbursement check or as confirmation that a claim has been
paid directly to the provider.
Extended care facility (ECF) - A medical care institution for patients who require long-term custodial or medical care, especially for
chronic disease or a condition requiring prolonged rehabilitation therapy.
Extension of benefits - When a person's coverage is extended under certain conditions, such as disability, after their group health
coverage would otherwise have ended.
Exostosis - The overgrowth of normal bone.
Extracoronal - The outside of the crown of the tooth.
Extraction - The removal of a tooth.
Extraoral - The outside of the mouth.
Eye exams - Examinations to diagnose vision problems and determine a corrective prescription. May also include health screening
for conditions such as glaucoma.
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Face amount - The face amount stated in a life insurance policy is the amount that will be paid upon death, or policy maturity. The
face amount of a permanent insurance policy may change with time as the cash value in the policy increases.
Fair market value - The fair market value of a property or other asset is the price that a buyer and seller can establish in an armslength transaction where neither one is compelled to buy or to sell.
Family deductible - A deductible met by the combined expenses of all covered family members.
Family Medical Leave Act of 1993 (FMLA) - An act that requires companies with more than 50 employees to provide up to 12 weeks
of unpaid, job-protected leave for eligible employees who meet the service requirements and request leave for birth, adoption,
foster care placement, and illness of the employee or a family member.
Family social security - Total benefits received by a family, including the worker, because of the worker's eligibility for social
security benefits. (See Primary insurance amount.)
Family trust - An inter vivos trust established with family members as beneficiaries.
Federal housing administration (FHA) - The Federal Housing Administration (FHA) is a government agency that sets standards for
underwriting residential mortgage loans made by private lenders and insures such transactions.
Federal Insurance Contributions Act (FICA) - Legislation authorizing the payroll tax for social security.
Federal national mortgage association (FNMA or Fannie Mae) - FNMA is a private corporation that acts as a secondary market
investor in buying and selling mortgage loans.
Fee-for-Service - Billing method where the health care provider charges separately for each service given.
Fertility programs - Treatment designed to increase the ability to conceive a baby, or to induce conception.
Fiduciary - An individual or institution occupying a position of trust. An executor, administrator or trustee.
Filling - Material used to fill a cavity or replace part of a tooth.
Final Average Pay (FAP) - One definition of "pay" that is used as a basis for determining benefit amounts under defined benefit
plans. Defined as the average of the employee's pay for a relatively short period just prior to retirement. For example, the five
years immediately prior to retirement, or the highest five consecutive years in the 10 or 15 years prior to retirement.
Financial Accounting Standards Board (FASB) - The independent, private authority for establishing accounting principles in the
United States.
Financial planner - A person who helps you plan and carry out your financial future.
Fiscal year - A corporation's accounting year, which may or may not be a calendar year.
Fixed Bridge - A partial denture used to replace one or more teeth, which is cemented in the mouth.
Fixed income - Steady income such as that from bonds, fixed annuities, or preferred stock.
Fixed investment - Any investment paying a fixed interest rate such as a money market account, a certificate of deposit, a bond, a
note, or a preferred stock. A fixed investment is the opposite of a variable investment.
Fixed match or fixed matching contributions - The fixed amount a company contributes to the employee's 401(k) account based on
the employee's matched contributions.
Fixed rate mortgage - With a fixed rate mortgage, your interest rate will remain the same for the entire term of the loan. Although
the rate will begin slightly higher than a comparable adjustable rate mortgage (ARM), the interest rate you pay can never go up for
as long as you have the mortgage.
Flexible benefit plan - A plan under Section 125 of the Internal Revenue Code that gives employees a choice between taxable
benefits, including cash, and nontaxable benefit programs.
Flexible spending account (FSA) - An account set up under an employer plan that allows employees to set aside pre-tax dollars
from their paychecks to pay eligible expenses. There are two forms of flexible spending accounts: health care and dependent care.
Floor plan - A tax-qualified defined benefit pension that is intended as a guarantee that the participant's accumulation under the
defined contribution plan will generate at least a minimum level of retirement income. If the defined contribution plan would not
generate the guaranteed minimum, the floor plan makes up the difference.
Floss - See dental floss.
Fluoride - A chemical compound used to prevent dental decay, utilized in fluoridated water systems and/or applied directly to the
teeth.
FMLA - See Family Medical Leave Act of 1993.
Foreclosure - A foreclosure is the legal process by which a borrower losses their ownership interest in a collateralized property due
to default on the attached loan.
Foreign Affiliate - An entity in which an employee's company has a direct or indirect ownership of at least 10% and has entered
into a 3121(I) agreement under the Internal Revenue Code.
Forfeiture - An amount an employee loses by terminating employment before becoming fully vested under the plan's vesting
schedule. In flexible spending accounts, the amount an employee loses if any money remains in the account after the claims filing
deadline. In a defined benefit plan, forfeitures may be applied to reduce future employer contributions. In a profit sharing plan,
forfeitures may be allocated to the accounts of remaining participants.
Formulary - A list of preferred, commonly prescribed prescription drugs. These drugs are chosen by a team of doctors and
pharmacists because of their clinical superiority, safety, ease of use and cost.
Forward Income Averaging - A rule allowing favorable tax advantages for some lump sum distributions from tax-qualified
retirement plans. After reaching age 59 1/2, a participant may elect a one-time election of five-year averaging. Participants who
were age 50 before January 1, 1986 can elect five- or ten-year averaging. This averaging allows employees to pay taxes on the
lump sum as if it were received over five years (or ten years).
401(k) Plan - Allows an employee to contribute pre-tax dollars to a qualified plan that is invested in stocks, bonds, or money
market accounts. Contributions and earnings are deferred until the employee retires or leaves the company. (See Cash or
deferred arrangement)
403(b) Plan - A type of tax-sheltered annuity (TSA) made available to some nonprofit organizations. Like a 401(k), this plan allows
employees to contribute pre-tax dollars for investments toward retirement.
457 Plan - A tax-deferred plan available to states and certain other political entities under Code Section 457.
Frenum - Muscle fibers covered by a mucous membrane that attaches the cheek, lips and/or tongue to associated dental mucosa.
Frenectomy - The removal of a frenum.
Frozen entry age actuarial cost method - A variation of entry age actuarial cost method under which the amount initially developed
as accrued liability is unchanged by deviation of future experience from assumption.
FSA - See flexible spending account.
Fund manager - A person who manages the assets of a mutual fund.
Fundamental analysis - Fundamental analysis is a technique of estimating a stock's future value based on the in-depth study of the
stock's underlying financial statements. Fundamental analysis is the opposite of technical analysis.
Funded retirement plan - A plan under which funds are set aside in advance to provide expected benefits. (See advance funding.)
Funding agency - An organization or individual that provides facilities for the accumulation of assets to be used for the payment of
benefits under a pension plan, or an organization that provides facilities for the purchase of such benefits.
Future service (pension plans) - That portion of the participant's retirement benefit that relates to the period of creditable service
after the effective date of the plan or after a change.
Future value - The future worth of a payment, or stream of payments, projected at a given interest rate for a given period of time.
Futures market - A market in which contracts for future delivery of a commodity are bought and sold.
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Garnishment - A court order requiring the employer of a debtor to deduct a portion of the debtor's pay and to deliver it to the
creditor.
Gatekeeper - A primary care physician who provides a broad range of routine medical services and refers patients to specialists,
hospitals and other providers as necessary. This traditional primary care physician role is called a "gatekeeper" function. Under
some benefits plans, a referral by the primary care physician is required to obtain services from other providers.
Generally accepted accounting principals (GAAP) - Conventions, rules and procedures that define accepted accounting practices in
the U.S.
Generic Drug - A drug which is the pharmaceutical equivalent to one or more brand name drugs. Such generic drugs have been
approved by the Food and Drug Administration (FDA) as meeting the same standards of safety, purity, strength, dosage form, and
effectiveness as the brand drug. A generic drug's formula is available to any pharmaceutical company.
Gingiva - The soft tissue that covers the jawbone. Also referred to as the gums.
Gingivectomy - The removal of gingival (gum) tissue.
Gingivitis - An inflammation or infection of the gingival (gum) tissue; the initial stage of gum disease.
Gingivoplasty - A surgical procedure to reshape or repair the gingival (gum) tissue.
Global fund - An investment fund that invests in both U.S. and foreign securities. This is in contrast to a foreign fund, which invests
only in non-U.S. securities.
Golden handcuffs - Employee benefit and related incentives linked to an individual's continued employment with an organization.
Leaving the organization would forfeit the incentive. When such incentives become comparatively large compared to other
incentives, the employee can no longer "afford" to leave the organization.
Golden parachute - A special financial protection plan (including cash payments and future income) for key executives in the event
of an unfriendly takeover by another firm.
Grace period - A period (usually 31 days) following each premium due date, other than the first due date, during which an overdue
premium may be paid, and during which time all policy provisions remain in force and effect.
Graft - A piece of tissue or synthetic material placed in contact with tissue to repair a defect or supplement a deficiency.
Grandfathered provisions - When a company changes a benefit plan, participants who were active participants in the plan before
the change, may remain covered under some provisions of the old plan, or may be given an option between the old provisions and
the new provisions. The provisions of the old plan that carry forward for such participants are grandfathered provisions.
Grant - A grant generally refers to a grant of employer stock, or of options to purchase employer stock.
Group - An employer, association or trust that applies for and accepts Benefit Plans on behalf of its Members.
Group annuity contract - A contract issued by a life insurance company that may be used as the funding instrument for a defined
benefit or defined contribution plan. Forms or group annuity contracts include: Deferred Annuity, Deposit Administration,
Immediate Participation Guarantee, and Guaranteed Interest.
Group health coverage - A health benefits plan that covers a group of people as permitted by state and federal law.
Group homes - Living places that provide an environment for mental health and chemical dependency treatment, and help the
residents ease their way into regular activities.
Group insurance - A form of insurance designed to insure classes of persons rather than specific individuals.
Group universal life plan (GULP) - Group life insurance that combines two features: death benefit protection for named
beneficiaries through term insurance, and an investment element that can create permanent insurance or accumulate money tax-
deferred. Participation is generally voluntary and the employee pays the full cost.
Growth stock - The common equity of a company that consistently grows significantly faster than the economy.
Guaranteed Interest Contract (GIC) - Investment contract from an insurance company, available to a defined benefit or defined
contribution plan under which the interest rate is guaranteed for a fixed period of time.
Guaranteed investment certificate (GIC) - A type of debt security sold to individuals by banks and trust companies. They usually
cannot be cashed before the specified redemption date, and pay interest at a fixed rate.
Guarantor - A third party who agrees to repay any outstanding balance on a loan if you fail to do so. A guarantor is responsible for
the debt only if the principal debtor defaults on the loan.
Guardian - A person or persons named to care for minor children until they reach the age of majority. A will is the best way to
ensure that the person or persons whom you wish to have care for your minor children are legally empowered to do so in the event
of your death.
Gum - See gingiva.
Gum disease - See periodontal disease.
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Halfway houses - Living places that provide an environment for mental health and chemical dependency treatment, and help the
residents ease their way into regular activities.
Hardship withdrawal - A withdrawal of employee contributions from a 401(k) plan before the participant retires at age 55 or
reaches age 59-1/2, and after meeting the plan's tests for financial hardship. Such a withdrawal is subject to ordinary income tax
and a 10% penalty tax.
Hazard insurance - Hazard insurance protects the insured from losses arising due to physical property damage associated with
catastrophic hazards such as flood, fire, earthquake, tornado, etc. Hazard insurance will often be required by a lender to protect
their collateral from such risks.
HCE - See highly compensated employee.
Health Benefit Plan - A policy, contract, certificate or agreement issued by a health carrier to provide, deliver, arrange for, pay for
or reimburse any of the costs of health care services.
Health care flexible spending account (health care FSA) - An account an employee may establish to set aside before-tax
contributions from each paycheck to pay eligible health care expenses.
Health Care Financing Administration (HCFA) - The federal agency responsible for administering Medicare and federal participation
in Medicaid.
Health Care Savings Account (HSA) - Health Savings Accounts (or "HSAs") are arrangements which allow eligible individuals to
accumulate money tax-free to pay for health coverage. Contributions to HSAs can be made either by employers or individuals. Like
an IRA, an HSA takes the form of a written trust or custodial account which is normally sponsored by a financial institution such as
a bank or insurance company. Once amounts are contributed to an HSA, earnings accrue tax-free. HSAs belong to an individual
and so are portable without penalty if the person changes jobs.
Health Insurance Portability and Accountability Act of 1996 (HIPAA) - Legislation that improves the availability of health insurance
by restricting preexisting limitation clauses for those who change jobs, guaranteeing the availability of health insurance to
employers with fewer than 50 employees, and providing certain tax incentives.
Health Maintenance Organization (HMO) - A type of Health Benefit Plan under which the Members are required to receive care
through a specific group of participating doctors and hospitals in order to receive Benefits.
Health maintenance services - Any health care service or program that helps maintain a person's good health. Health maintenance
services include all standard preventive medical practices, such as immunizations and period examinations, as well as health
education and special self-help programs.
Health Plan Employer Data and Information Set (HEDIS®) - A core set of performance measures developed through the
collaborative effort of the National Committee for Quality Assurance (NCQA), employer groups and other health care purchasers.
NOTE: HEDIS is a registered trademark of the National Committee for Quality Assurance.
Hearing therapy/hearing aides - Treatment or equipment to improve hearing.
Highly compensated employee (HCE) - An employee who earns more than a specific dollar amount established by the Tax Reform
Act of 1986. This dollar amount is adjusted from time to time for cost of living.
HIPAA - See Health Insurance Portability and Accountability Act of 1996.
HMO - See Health Maintenance Organization.
High noble metal - See metals, classification of.
Home equity line of credit (HELOC) - A home equity line of credit allows a homeowner to borrow against the equity in their home
with specific limits and terms. This is an open end loan which allows the borrower to borrow and repay funds as needed.
Home equity loan - A home equity loan is a collateralized mortgage, usually in a subordinate position, entered into by the property
owner under specific terms of repayment.
Home Health Care - Health services other than Custodial Care, rendered by a home health agency to an individual in his or her
residence. Such services are provided to disabled, sick or convalescent individuals who do not need inpatient care, but who do need
nursing services or therapy, medical supplies and special outpatient services. It is important to read your Contract to determine
which services are Covered Services.
Home health care agency - An agency licensed by the state and accredited to provide services such as skilled nursing during visits
to the patient's home.
Home Infusion Therapy - Receipt of Infusion Therapy at an individual's residence.
Homeowner Insurance - Insurance on the value of the home and its contents.
Hospice - A facility or service that provides care for the terminally ill patient and which provides support to the family. The care,
primarily for pain control and symptom relief, can be provided in the home or an inpatient setting.
Hospital - A state licensed facility whose primary function is to provide inpatient and outpatient diagnostic and therapeutic services,
for a variety of surgical and non-surgical medical conditions, and which is not used primarily for custodial care.
Hours of service - Hours for which the employee is paid, or entitled to be paid, by the company.
H.R. 10 plan - See Keogh Plan.
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I.D. Card/Identification Card - A Card issued to a Subscriber and possibly his/her dependents, which allows the Member to identify
himself/herself to a Provider in order to obtain health services. The I.D. Card may contain information about the Member's Benefits.
Identity disorder - Generally refers to a confusion of gender identity, where a person confuses the sense of being male and
masculine or female and feminine.
Illiquid - The description of a security for which it is difficult to find a buyer or seller. An illiquid investment is an investment that
may be difficult to sell quickly at a price close to its market value. Examples include stock in private unlisted companies,
commercial real estate and limited partnerships.
Illustration - A life insurance illustration, or ledger, is a reference tool used to illustrate how a given life insurance policy
underwritten by a specific insurer is expected to perform over a period of years. The insurance illustration assumes that conditions
remain unchanged over the period of time that the policy is held.
Immediate
Immediate
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denture - A denture constructed for immediate placement after removal of the remaining teeth.
Participation Guarantee Contract (IPG) - Variation of Deposit Administration type of contract providing immediate
participation similar to a self-insured plan. When an employee retires, the reserves are determined to guarantee his
no annuity is purchased.
Immunizations - Inoculations with vaccines to establish resistance to specific infectious diseases.
Impression - A negative reproduction of a given area. For example, an impression may be taken of a tooth in order to make an
inlay or crown for that tooth.
Impacted tooth - An unerupted or partially erupted tooth that is positioned against another tooth, bone or soft tissue so that
complete eruption is unlikely.
Implant - An artificial device, usually made of a metal alloy or ceramic material, that is implanted within the jawbone as a means to
attach an artificial crown, denture, or bridge.
Imputed income - Internal Revenue Service computed value of group life insurance benefits in excess of $50,000.
Incisors - The four front teeth referred to as central and lateral incisors, located in the upper and lower jaws and used to cut and
tear food. The central incisors are the two large teeth in the middle of the mouth and the lateral incisors are next to the central
incisor, one on each side.
Income averaging - Income averaging allows individuals who were age 50 before January 1, 1986 to pay tax on a lump sum
distribution as though it had been received over a five or ten year period, rather than all at once. By using income averaging
individuals may be able to pay income tax at a more favorable rate.
Income statement - A financial statement that shows the components of profit, such as sales, expenses, taxes and net profit.
Income stocks - Stocks that have a consistent, stable, above-average dividend yield.
Indemnity Plans - A health insurance plan that generally does not require use of a specific provider network to receive Benefits.
Also referred to as Fee-for-Service (FFS) Plan.
Index fund - An investment fund that holds investments that mirror the investments tracked by a major index, such as the
Standard and Poor's 500.
Indirect pulp cap - A procedure in which the nearly exposed pulp is covered with a protective dressing to protect the pulp from
additional injury and to promote healing and repair via formation of secondary dentin.
Individual deductible - The deductible that must be met by an individual participant.
Individual policy pension plan - A plan under which benefits are provided by means of level premium individual annuity or life
insurance contracts issued to the trustee of a trust established by the employer. The maturity value of an employee's contract is
used to provide his or her retirement benefits.
Individual retirement account (IRA) - An Individual Retirement Account (IRA) is a personal savings plan that offers tax advantages
to those who set aside money for retirement. Depending on the individual's circumstances, contributions to the IRA may be
deductible in whole or in part. Generally, amounts in an IRA, including earnings and gains, are not taxed until distributed to the
individual.
Individual underwriting - A process of determining an applicant's individual eligibility for insurance.
Infant age increase schedule - Some dependent life insurance programs increase the insurance coverage amount for infants at
different ages.
Infertility - Term used to describe the inability to conceive or an inability to carry a pregnancy to a live birth after a year or more of
regular sexual relations without the use of contraception. Also includes the presence of a condition recognized by a physician as the
cause of infertility.
Inflation - A term used to describe the economic environment of rising prices and declining purchasing power.
Inflation protection - A feature to adjust benefits to reflect changes in the cost of living as measured by an index.
In-force policy - An in-force life insurance policy is simply a valid policy. Generally speaking, a life insurance policy will remain inforce as long as sufficient premiums are paid, and for approximately 31 days thereafter. (See grace period)
Informal care - In a long-term care plan, informal care is generally assistance with basic living needs that does not need to be
provided by a specially-trained person or in a formal setting.
Infusion Therapy - A liquid substance introduced into the body by a vein for therapeutic purposes.
Inlay - A restorative filling that is used to replace part of a tooth.
In-Network - Refers to the use of providers who participate in the Health Benefit Plan's Provider Network. Many Health Benefit
Plans require Members to use participating (In-network) Providers to receive Benefits, or the highest level of Benefits.
Inpatient - An individual who is receiving care for 24 hours or more as a registered bed patient in a Hospital or other facility, where
a room and board charge is made.
Inpatient care - Care given to a patient admitted to a hospital, extended care facility, nursing home or other facility.
In-service withdrawal - A withdrawal from a plan account while the employee is working for the company.
Insurability - Insurability refers to the assessment of the applicant's health and is used to gauge the level of risk the insurer would
potentially take by underwriting a policy, and therefore the premium it must charge.
Insured - A life insurance policy covers the life of one or more insured individuals.
Integration with Social Security - A plan where the benefits are integrated with the Social Security benefit. With an integrated plan,
employees earning more than the Social Security taxable wage base receive greater contributions to reflect the fact that Social
Security benefits are not provided based on pay over that amount.
Interactive voice response (IVR) system - An interactive phone system that provides benefit information and/or accepts
transactions.
Interest rate - The simple interest rate attached to the terms of a mortgage or other loan. This rate is applied to the outstanding
principal owed in determining the portion of a payment attributable to interest and to principal in any given payment.
Interest rate risk - Is the uncertainty in the direction of interest rates. Changes in interest rates could lead to capital loss, or a yield
less than that available to other investors, Putting at risk the earnings capacity of capital.
Intermediate care - For a long-term care program, the level of care that lies between skilled care that would be provided in a
hospital or skilled nursing facility, and purely custodial care.
Intermittent leave - A form of leave under the Family Medical Leave Act taken in separate blocks of time (not as one continuous
leave of absence).
International fund - An investment fund with at least two-thirds of its assets invested in equities of companies outside the U.S.
Interproximal - The area between two adjacent teeth.
Intestate - A person dies intestate when he or she dies without a will.
Intracoronal - The area within the crown of a tooth.
Intraoral - The inside of the mouth.
Investigational Procedures - See Experimental/Investigational Procedures.
Investment - Use of money in an effort to create more money.
Investment banker - A firm that engages in the origination, underwriting, and distribution of new issues.
Investment company - A corporation or trust whose primary purpose is to invest the funds of its shareholders.
Investment considerations - Choosing which investments are right for you will depend on a number of factors, including; your
primary objectives, your time horizon and your risk tolerance.
Investment management services - Services to allocate assets among various available investments.
Investment portfolio - A term used to describe your total investment holdings.
Investment risk - The chance that the actual returns realized on an investment will differ from the expected return.
Investment strategy - The method used to select which assets to include in a portfolio and to decide when to buy and when to sell
those assets.
IRA - See individual retirement account.
IRA rollover- An individual may withdraw, tax-free, all or part of the assets from one IRA, and reinvest them within 60 days in
another IRA. A rollover of this type can occur only once in any one-year period. The one-year rule applies separately to each IRA
the individual owns. An individual must roll over into another IRA the same property he/she received from the old IRA.
IVR - See interactive voice response.
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Joint and 50% survivor annuity - The automatic payment method under some retirement plans if the employee is legally married
when benefit payments begin. It provides the employee with monthly payments for life, which are reduced based on the ages of
both the employee and the spouse when payments begin. If the employee dies before the spouse, the employee benefits will stop
and the spouse will receive 50% of the reduced payments for life.
Joint and 100% survivor annuity - The automatic payment method under some retirement plans if the employee is legally married
when benefit payments begin. It provides the employee with monthly payments for life, which are reduced based on the ages of
both the employee and the spouse when payments begin. If the employee dies before the spouse, the employee benefits will stop
and the spouse will receive 100% of the reduced payments for life.
Joint Commission on Accreditation of Healthcare Organizations (JCAHO) - The JCAHO is an independent, not-for-profit organization
whose mission is to improve the quality of care provided to the public through the provision of health care accreditation and related
services which support performance improvements in health care organizations. The Joint Commission evaluates and accredits
hospitals and health care organizations which provide managed care (including health plans, preferred provider organizations and
integrated delivery systems), home care, long-term care, behavioral health care, laboratory and ambulatory care services.
Joint fund (Labor-Management funds) - Retirement (and other) funds established in accordance with the Labor-Management
Relations Act, which provide for balanced administrative management by both labor and employer representatives.
Jumbo loan - A loan that is larger than the limits set for conventional loans by the Federal National Mortgage Association (FNMA) or
Federal Home Loan Mortgage Corportation (FHLMC). This limit is currently set at $300,700.
Junk bond - Bond with a credit rating of BB or lower by key credit agencies.
Jury duty - Time off from work when called to serve on a jury.
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Keogh - A Keogh is a tax deferred retirement plan for self-employed individuals and employees of unincorporated businesses. A
Keogh plan is similar to an IRA but with significantly higher contribution limits.
Keogh (HR-10) plan - Enables self-employed individuals to contribute to a tax-qualified retirement plan. May be classified as either
defined contribution or defined benefit plan. For tax purposes, the individual is treated as both employer and employee.
Key employee - A plan participant who at any time during the plan year or any of the four preceding plan years is: an officer with
pay greater than 150% of the Section 415 defined benefit limit (up to 50 employees or, if less, the greater of three employees or
10% of all employees); one of the 10 employees owning the largest interest in the company and having annual compensation
exceeding the Section 415 defined benefit dollar limitations; a 5% owner; or a 1% owner who has annual pay of more than
$150,000.
Kidney disease, end-stage - Failure of the kidneys. A person with end-stage kidney disease qualifies for Medicare before reaching
the usual Medicare eligibility age of 65. A Medicare-eligible participant should review how Medicare works with any employersponsored health care coverage. Also called end stage renal disease (ESRD).
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Labial - The area pertaining to or around the lip.
Labor-Management Relations Act of 1947 - See Taft-Hartley Act.
Lawful spouse - A person recognized as the lawful husband or lawful wife of an active employee under the laws of the state or
jurisdiction where the employee lives.
Leave year - The twelve-month period a company uses for measuring leave taken under the Family Medical Leave Act.
Leverage - Using "leverage" is the process of investing using borrowed funds. Leveraging your investments magnifies your returns,
both positive and negative.
Leveraged buyout (LBO) - Leveraged buyouts are deals in which a company is bought with mostly borrowed money, money
frequently raised through selling high-yield and high-risk junk bonds.
Liability insurance - Insurance that pays benefits to an injured party on behalf of a covered party that is legally responsible for the
harm to that person or property.
Liability risk - The risk that the legal system may assess punitive damages against you if property damage or personal injuries can
be attributed to your carelessness or negligence.
Lien - A lien represents a claim against a property or asset for the payment of a debt. Examples include a mortgage, a tax lien, a
court judgment, etc.
Life annuity - A series of payments that, once begun, continue throughout the remaining lifetime of the annuitant but not beyond.
Life expectancy - Life expectancy represents the average future time an individual can expect to live. Life expectancies have been
increasing steadily over the past century and may continue to increase in the future. As people are living longer the cost of
retirement is increasing.
Life insurance - A contract between you and a life insurance company that specifies that the insurer will provide either a stated sum
or a periodic income to your designated beneficiaries upon your death.
Lifetime Maximum - The maximum amount of benefits the Health Benefit Plan will pay for any Member.
Life settlement - Occurs when a person who does not have a terminal or chronic illness sells his/her life insurance policy to a third
party for an amount that is less than the full amount of the death benefit. The buyer becomes the new owner and/or beneficiary of
the life insurance policy, pays all future premiums, and collects the entire death benefit when the insured dies. Some states
regulate the purchase as a security while others may regulate it as insurance.
Lingual - The area pertaining to or around the tongue.
Liquidity - Liquidity is the measure of your ability to immediately turn assets into cash without penalty or risk of loss. Examples
include a savings account, money market account, checking account, etc.
Living needs benefits or living benefits - A life insurance plan provision which may give policyholders access to part or all of their
insurance benefit while still living, such as if they become terminally ill.
Living trust - A trust established while the donor of the trust assets is alive (as opposed to a testamentary trust, that is established
at death).
Living will - If you become incapacitated this document will preserve your wishes and act as your voice in medical decisions, if you
are unable to speak for yourself as a result of medical reasons.
Loan - An amount borrowed under plan rules.
Loan-to-value ratio - A loan-to-value ratio represents the relationship between all outstanding and proposed loans on a property
and the appraised value of the property. For example, an $80,000 loan on a $100,000 property would represent an 80% loan-tovalue ratio. This ratio assists a lender in determining the risk associated with the loan. The higher this ratio, the riskier the loan.
Local anesthetic - The injection given in the mouth to numb the areas where a tooth or area needs a dental procedure. Often
referred to as novocaine.
Long position - A long position in an investment indicates a current ownership in that investment which would increase in value as
the underlying asset(s) increase in value, opposite of a short position.
Long-term care - The range of services (both medical and emotional) typically provided at skilled nursing, intermediate-care,
personal care or elder-care facilities to people with debilitating chronic health conditions.
Long-term care insurance - Coverage to pay part or all of long-term care costs.
Long-term disability (LTD) plan - A plan designed to provide disability benefits to an employee after the employee meets the plan's
disability requirements and waiting period, until the employee is no longer disabled or reaches the age limit for benefits.
Loss of a body part or function - A loss as defined by an accident plan.
LTD plan - See long-term disability (LTD) plan.
Lump-sum distribution - A single payment of the actuarial equivalent of the employee's entire benefit because of the employee's
death, termination of employment, or attainment of age 59 1/2. A lump-sum distribution may be subject to favorable tax
treatment.
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Mail-order drug program - Filling of prescriptions by mail through a mail-order pharmacy. Plans often offer cost savings for
employees who use mail-order prescriptions.
Maintenance medication - Medications that are prescribed for long-term treatment of chronic conditions, such as diabetes, high
blood pressure or asthma.
Malocclusion - The improper alignment of biting or chewing surfaces of the upper and lower teeth. Often referred to as "the bite".
Managed Behavioral Health - A program that covers mental health and substance abuse care needs. In most cases, in-network
benefits need to be pre-authorized. The services that may be covered under the benefit plans are: individual therapy, family
therapy, group therapy, psychiatric evaluation, psychiatric medication management, intensive outpatient services, inpatient and
partial hospitalization.
Managed Care - Health care cost containment through coordination of care through primary care physicians, use of provider
networks, utilization review, preauthorization of services, and other means. Any form of Health Benefit Plan that uses Network
Providers to deliver care to Members.
Mandible - The lower jaw.
Margin - The amount of money supplied by an investor as a portion of the total funds needed to buy or sell a security, with the
balance of required funds loaned to the investor by a broker, dealer, or other lender.
Margin account - A special account set up by a broker for a client who wants to buy and sell securities using margin.
Margin call - A call from a broker to a client asking for more money to back up a security purchased on margin when such a
security has declined in value. If more money is not supplied, the broker usually sells the security.
Market order - An order to buy at the lowest price going, or sell at the highest price possible.
Market risk - Every investment carries some element of market risk, the risk that the entire market will decline, reducing the
investment's value regardless of other factors.
Maryland bridge - The trade name that has become synonymous with any resin-bonded, fixed partial denture (bridge).
Mastication - The act of chewing.
Match or matching contributions - The amount a company contributes to the employee's 401(k) account based on the employee's
matched contributions.
Matched contributions - Contributions an employee makes to a 401(k) plan that are eligible for matching contributions by the
company.
Material modification - A summary of material modification must be filed with the DOL and distributed to participants for any
change that affects a plan or a previously distributed SPD (as required by ERISA regulations).
Maternity - Motherhood.
Maternity care - Maternity care may include prenatal care (exams during pregnancy), childbirth, certain routine nursery care for a
newborn, and postpartum care.
Maternity Services - Care required for pregnancy and delivery.
Maxilla - The upper jaw
Maximum Allowance or Maximum Benefit Allowance - See allowable charge.
Maximum annual account addition limitation - ERISA defines a maximum annual contribution amount to be made by an employer
on behalf of an employee to a defined contribution plan.
Maximum annual benefit - The maximum dollar amount of benefits a plan will pay for a given person in a year.
Maximum benefit - The largest benefit that may be paid under a defined benefit plan in accordance with law, even though the
plan's benefit formula might produce a larger benefit if applied without limitation.
Maximum benefit limitation - Under ERISA, the maximum annual retirement benefit permitted for an employee in a defined benefit
plan.
Maximum lifetime benefit - The maximum dollar mount of benefits that will be paid for a given person under a plan.
Medicaid - Federally funded medical benefit plan that is administered by the individual states for those who meet age and lowincome guidelines.
Medical certification - The documentation that may be required when an employee requests a leave under the Family Medical Leave
Act for medical reasons, or applies for disability benefits.
Medical Equipment - See Durable Medical Equipment
Medically Necessary - Procedures, treatment, supplies, equipment or services determined to be:
 Appropriate for the symptoms, diagnosis or treatment of a medical condition, and
 provided for the diagnosis or direct care and treatment of the medical condition; and
 within generally accepted standards of good medical practice; and
 not primarily for the convenience of the Member or the Member's Provider; and
 the most appropriate procedure, treatment, supply, equipment or level of service which can be safely provided.
Medicare - Title XVIII of the Social Security Act that provides payment for medical and health services to the population aged 65
and over regardless of income, as well as certain disabled persons and persons with end stage renal disease (ESRD).
Medicare Part A - Hospital insurance provided by Medicare that can help pay for inpatient hospital care, medically necessary
inpatient care in a skilled nursing facility, home health care, hospice care and end stage renal disease (ESRD) treatment.
Medicare Part B - Medicare-administered medical insurance that helps pay for certain medically necessary practitioner services,
outpatient hospital services and supplies not covered by Part A hospital insurance of Medicare coverage. Doctors' services are
covered under Part B even if they're provided tot a member in an inpatient setting. Part B can also pay for some home health
services when the beneficiary doesn't qualify for Part A.
Medigap - A term used to describe health benefits coverage that supplements Medicare coverage.
Member - Any person who is enrolled in and covered by a Health Benefit Plan.
Mental and nervous disorders - See mental illness.
Mental health and chemical dependency professionals - Caregivers with the education, certification, and licensing required by the
mental health and chemical dependency plan.
Mental Health/Behavioral Health Services - Services primarily to treat any disorder that affects the mind or behavior.
Mental illness - A condition meeting the plan's definition of mental illness. This may include reference to the International
Classification of Diseases by the U.S. Department of Health and Human Services, or to generally accepted standards.
Metals, classification of - The noble metal classification system has been adopted as a more precise method of reporting various
alloys in dentistry commonly used in crowns, bridges and dentures. These alloys contain varying percentages of Gold, Palladium
and/or Platinum. High Noble contains more than 60% of Gold, Palladium, and/or Platinum (with at least 40% gold); Noble contains
more than 25% Gold, Palladium and/or Platinum; and predominantly Base contains less than 25% Gold, Palladium and/or
Platinum.
Minimum benefit - Some defined benefit plans provide that a minimum amount will be paid regardless of the amount the benefit
formula may yield. This minimum is usually payable only if certain service requirements are met.
Minimum distributions - An individual must start receiving distributions from a qualified plan by April 1 of the year following the
year in which he/she reaches age 70 ½ . Subsequent distributions must occur by each December 31st. The minimum distributions
can be based on the life expectancy of the individual or the joint life expectancy of the individual and beneficiary.
Minimum funding - The minimum amount that an employer must contribute to a defined benefit, money purchase, or target benefit
pension fund. If the minimum amount is not met, the IRS may impose an excise tax on the amount of the deficiency.
Minimum premium plan - An employer and the insurance company agree that an employer will be responsible for paying all claims
of a welfare benefit plan up to an agreed-upon aggregate level, with the carrier responsible for the excess.
Minimum wage - A wage level for most Americans established by Congress as part of the Fair Labor Standards Act. Beginning April
1, 1990, the minimum wage is $3.80 per hour.
Molars - The broad, multicusped back teeth, used for grinding food. In adults, there are a total of twelve molars (including the four
wisdom teeth, or third molars), three on each side of the upper and lower jaws.
Money market - The general market for short-term debt instruments including commercial paper, Treasury bills and CDs. A money
market fund invests in these instruments.
Money purchase pension plan - A type of defined contribution plan in which the employer's contributions are made for specific
individuals as defined by the plan (usually as a percentage of pay). Benefits are determined based on the amount that can be
purchased with the money in the participant's account from contributions and investment return.
Money purchase plan - A Money Purchase Plan has contributions that are a fixed percentage of compensation and are not based on
the employer's profits. For example, if the plan requires that contributions be 10% of the participant's compensation, the plan is a
Money Purchase Pension Plan. With this type of plan, the employer is committed to making contributions each year even if the
employer has no profits or is experiencing cash flow problems. Employee contributions are limited to 25% of compensation.
Employer contributions are limited to the smaller of $30,000 or 25 percent of a participant's compensation.
Morbid obesity - Obesity that has become a direct and immediate threat to a person's life.
Mortality - Mortality is the risk of death of a given person based on factors such as age, health, gender, and lifestyle.
Mortality table - A table showing how many members of a group, starting at a certain age, will be alive as each succeeding age. It
is used to calculate the probability of dying in, or surviving through, any given period, and the value of an annuity benefit. To be
appropriate for a specific group, it should be based on such common characteristics as sex, occupational group, etc.
Mortgage - A legal instrument providing a loan to the mortgagee to be used to purchase a real property in exchange for a lien
against the property.
Mortgage broker - A mortgage broker acts as an intermediary between a borrower and a lender. A broker's expertise is to assist
the borrower in identifying mortgage lenders and products that they might not identify otherwise.
Mortgage insurance (MI) - Mortgage insurance protects the lender against the default of higher risk loans. Most lenders require
mortgage insurance on loans where the loan-to-value ratio is higher than 80% (less than 20% equity).
Multiemployer plan - A plan to which two or more employers contribute according to a collective bargaining agreement with the
same union. Contributions are established by a labor agreement.
Municipal bonds - A bond offered by a state, county, city or other political entity (such as a school district) to raise public funds for
special projects. The interest received from municipal bonds is often exempt from certain income taxes.
Mutual funds - A mutual fund is a pooling of investor (shareholder) assets, which is professionally managed by an investment
company for the benefit of the fund's shareholders. Each fund has specific investment objectives and associated risk. Mutual funds
offer shareholders the advantage of diversification and professional management in exchange for a management fee.
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National Committee on Quality Assurance (NCQA) - An independent, nonprofit organization which assesses the quality of managed
care plans, managed behavioral health care organizations, and credentials verification organizations.
Negotiated fees - The fees negotiated between a network and its providers. Generally, the providers agree to accept fees lower
than those typically charged by doctors and hospitals.
Net asset value - The value of all the holdings of a mutual fund, less the fund's liabilities [also describes the price at which fund
shares are redeemed].
Net worth - Your net worth is the difference between your total assets and total liabilities.
Network - The doctors, clinics, hospitals and other medical providers with whom the Health Benefit Plan contracts to provide health
care to its Members.
Network Provider - A Provider in the Network.
Nitrous oxide - A controlled mixture of nitrogen and oxygen gases that is inhaled by the patient in order to decrease sensitivity to
pain. Also referred to as laughing gas.
No-load fund - A mutual fund that charges no sales fee to its shareholders.
Nonassignability - Generally, qualified plan benefits cannot be assigned to someone other than the employee or other participant.
Exceptions include pension benefits affected under a Qualified Domestic Relations Order (QDRO), and some life insurance plans
that allow the participant to assign the life insurance policy to someone else.
Non-conforming loan - A loan that does not conform to Federal National Mortgage Association (FNMA) or Federal Home Loan
Mortgage Corporation (FHLMC) guidelines. Such loans include jumbo loan, sub-prime loans and high risk loans.
Noncontributory plan - An employee benefit plan to which the employer is the sole contributor.
Nonexempt employees - A classification of employees subject to the provisions of the Fair Labor Standards Act. (These employees
receive compensation for overtime.)
Nonformulary - Drugs that do not appear on the plan's formulary (preferred drug) list.
Non-Network Provider - A medical provider who has not contracted with a Health Benefit Plan to participate in the Network. Also
known as a non-participating provider or out-of-network provider.
Nonqualified plan - A defined benefit or defined contribution plan that does not meet the requirements of the Internal Revenue
Code. Such plans do not receive favorable tax treatment. Reporting and disclosure rules differ from those of qualified plans.
Normal cost - The cost determined for a defined benefit pension plan, under the actuarial cost method in use, for a specific year of
an employee's career.
Normal retirement age - Under a retirement plan, the normal age for full benefits to begin. Full Social Security benefits are
currently available at age 65 for most retirees, although it will gradually begin to rise to age 67 by 2027.
Normal retirement date - The time specified in a retirement plan as being the time when retirement will normally occur and when
the employee will be entitled to full retirement benefits. Benefit formulas and cost calculations are usually based on the
assumption that retirement will take place at normal retirement age. Normal retirement age must not be later than the latter of
the participants 65th birthday or the 10th anniversary of the date the participant began participating in the plan.
Note - A note is a legal document that acknowledges a debt and the terms and conditions agreed upon by the borrower.
Notice period - The lead time a company requests before a leave under the Family Medical Leave Act can begin.
Novocaine - A generic name for the many kinds of anesthetics used in the dental injection, such as Xylocaine, Lidocaine, or
Novocaine. See local anesthetic.
Nursing home - A licensed facility that provides skilled nursing care but does not meet Medicare's definition of a "skilled nursing
facility".
Nutritional counseling - Nutritional education and planning provided by a duly certified nutritionist to help mange a newly
diagnosed or newly deteriorating medical condition (such as diabetes) that may be partially controlled by diet.
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OASDHI - See Old-Age, Survivors, Disability and Health Insurance.
Occlusal x-ray - An intraoral x-ray taken with the film held between the teeth in biting position.
Occlusal surface - The chewing surface of the back teeth.
Occlusion - Any contact between biting or chewing surfaces of upper and lower teeth.
Occupational Therapy - Treatment of a physically disabled person by means of constructive activities designed and adapted to
promote restoration of the person's ability to perform activities of daily living (ADLs) and those tasks required by the person's
particular occupation or role.
Odd lot - An uneven number of securities that represents less than a board lot.
Offer price - The price that a buyer is willing to pay for an investment.
Office visit - A personal visit between a physician and a patient in an office or hospital.
Offset plan - An integrated pension benefit plan in which the benefits are reduced (offset) by part of the employee's retirement
benefit provided under the Social Security Act.
Old-Age, Survivors, Disability and Health Insurance (OASDHI) - U.S. Social Security benefits.
Onlay - A cast gold or porcelain filling that covers one or all of the tooth's cusps. Used to replace a lost part of the tooth or to
improve the bite by increasing the height of the tooth.
Open-end fund - An open-end mutual fund continuously issues and redeems units, so the number of units outstanding varies from
day to day. Most mutual funds are open-end funds. The opposite of closed-end fund.
Open enrollment - The period during which subscribers in health benefit plans have the opportunity to select alternate health plan
options. The term is also used to designate the period in which individuals may enroll in a health plan without proving good
health.
Open matter - In legal services plans, an open matter is a matter on which a participant has consulted an attorney and the
attorney has begun to represent the participant.
Option - A contract giving the holder the right (but not the requirement) to exercise an option to buy or sell at a particular price.
Employers sometimes grant stock options to employees giving them the right to buy employer stock at a given price (the exercise
price).
Opt-out privilege - A general term used when some benefits are available for out-of-network covered services. Often coverage is
less than the coverage available for in-network services, and the covered person may have to pay for services up front and then
file a claim for reimbursement.
Oral surgery - The surgical removal of teeth and the repair and treatment of other oral problems, such as tumors and fractures.
Organ donation - The donation of an organ or bone marrow from a living or dead person. Costs for the donor and the recipient may
or may not be covered under a medical plan. Such services generally require preauthorization, and, may need to be performed at a
special center, sometimes called a Center of Excellence.
Origination fee - The origination fee on a mortgage is usually the amount charged by the lender for originating the loan. Origination
fees vary by lender and are expressed in points where one point is equal to 1% of the original loan balance.
Orthodontics - A specialized branch of dentistry that corrects malocclusion and restores the teeth to proper alignment and function.
There are several different types of appliances used in orthodontics, one of which is commonly referred to as braces.
Orthotics - Medical equipment designed to support a weak or nonfunctioning body part.
Out-of-area benefits - Benefits the health plan provides to covered persons for covered services obtained outside of the network
service area. The details of such benefits will vary from plan to plan.
Out-of-Pocket Maximum - The maximum amount that a Member will have to pay for Covered Services under the Health Benefit
Plan. The maximum is typically the sum of all Deductible and Coinsurance amounts paid by the Member.
Outpatient - A patient who is receiving care at a hospital, physician's office or other health facility without being admitted as an
Inpatient. The term "ambulatory" is often used to describe Outpatient care.
Outpatient care - Any health care service provided to a patient who is not admitted to a facility. Outpatient care may be provided in
a doctor's office, clinic, the patient's home or hospital outpatient department.
Outpatient diagnostic services/treatment - Care to diagnose injury or disease provided to an outpatient.
Outpatient facility - A treatment or diagnosis facility that is licensed and staffed but does not provide overnight inpatient care.
Examples include laboratories, outpatient surgical centers, birthing centers, urgent care facilities and outpatient rehabilitation
facilities.
Outpatient Surgery - Surgical procedures performed that do not require an Inpatient admission. Such surgery can be performed in
a Hospital, an Ambulatory Surgery center, or a physician's office.
Overbite - A condition in which the upper teeth excessively overlap the lower teeth when the jaw is closed.
Overjet - The horizontal overlap of the upper teeth over the lower teeth.
Over-the-counter (OTC) market - Market created by dealer trading as opposed to the auction market, which prevails on most major
exchanges.
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Paid amount - The exact amount issued on a bank draft to the provider of service.
Paid-up life insurance - Life insurance protection that has been paid in full, with no additional premiums required to continue it.
Palate - The hard and soft tissues forming the roof of the mouth.
Palliative - Treatment that relieves pain but is not curative.
Panorex - An extraoral full-mouth X-ray that records the teeth, the upper, and the lower jaws on one film.
Paper gain (loss) - Unrealized capital gain (loss) on securities held in portfolio, based on a comparison of current market price to
original cost.
Par bond - A bond selling at par.
Parity Rule - A rule governing breaks in service in tax-qualified retirement plans. A right to a pension benefit can be lost if the
break in service is greater than the years of vesting service the participant had accrued.
Partial Day Treatment - A program offered by appropriately-licensed psychiatric facilities that includes either a day or evening
treatment program for mental health or substance abuse. Such care is an alternative to inpatient treatment.
Parenting education - Education to improve parenting skills.
Partial denture - A removable appliance used to replace one or more (but not all) natural teeth.
Partial disability - A disability that prevents a person from performing some, but not all of the functions of his or her regular job.
Participant - An active or inactive employee who may become eligible to receive, or is receiving, benefits under an employee
benefit plan.
Participant ID - The unique identifier associated with a participant.
Participating pharmacy - A pharmacy participating in the plan's network.
Participating Provider - A physician, hospital, pharmacy, laboratory, or other appropriately licensed facility or provider of health
care services or supplies, that has entered into an agreement with a Health Benefit Plan to provide services or supplies to a
Member enrolled in a Health Benefit Plan.
Party-in-Interest - Certain persons and entities considered to be closely related to plan interest under fiduciary responsibility
provisions of ERISA.
Past service - Years of service prior to the inception of the plan or prior to the employee's entry into the plan.
Paternity - Fatherhood.
Pay Replacement - Percent of pay that is replaced by benefits from an employee benefit plan and/or social security.
Payment method - For a retirement plan, the method the participant selects for receiving plan benefits.
Payout events - Events at which retirement benefits are payable. These could include disability and death, as well as retirement or
other termination of employment.
Payroll deduction - Payments made on your behalf by your employer. They are automatically deducted from your pay check.
PBGC - See Pension Benefit Guaranty Corporation.
PCP - See Primary Care Physician.
Pediatric dentistry - The specialized branch of dentistry that deals solely with treating children's dental disease. Also referred to as
pedodontics.
Pedodontics - See Pediatric Dentistry above.
Pended Claim - Claims that require additional information prior to completing the adjudication process.
Pension administrator - As defined by ERISA, the person or organization (frequently the sponsor) designated by the terms of the
document under which a pension or welfare plan operates.
Pension Benefit Guaranty Corporation (PBGC) - An entity established under ERISA to guarantee certain benefits for participants in
defined benefit plans of companies with over 25 participants.
Pension plan - A retirement plan that provides a set amount of benefit, or a set formula to determine the amount of benefit. The
contributions needed to provide the specific benefits can be determined actuarially.
Pension trust - Established in conjunction with a pension plan to receive and invest employer and employee contributions.
Periapical - The area that surrounds the root tip of a tooth.
Pericoronitis - An inflammation of the gum tissue around the crown of a tooth, usually the third molar.
Period certain option - A life annuity which provides that payments will be made for at least a specified period, such as 5, 10, 15
years. Any payments made after the retiree's death (but still within the specified period) would be made to a beneficiary.
Permanently and totally disabled - Totally disabled (as defined by the plan) in a manner that is expected to continue for life.
Periodontal - Relating to the tissue and bone that supports the tooth.
Periodontal disease - The inflammation and infection of gums, ligaments, bone, and other tissues surrounding the teeth. Gingivitis
and periodontitis are the two main forms of periodontal disease. Also called gum disease or pyorrhea.
Periodontal pocket - An abnormal deepening of the gingival crevice. It is caused when disease and infection destroy the ligament
that attaches the gum to the tooth and the underlying bone.
Periodontal surgery - A surgical procedure involving the gums and jawbone.
Periodontics - The dental specialty that deals with and treats the gum tissue and bone that supports the teeth.
Periodontium - The bone and tissues supporting the teeth.
Periradicular - The area which surrounds a portion of the root of the tooth.
Permanent teeth - The thirty-two adult teeth that replace the baby, or primary teeth. Also known as secondary teeth.
Personal leave - Time off from work for personal reasons.
Physical therapy - Rehabilitation concerned with restoration of function and prevention of physical disability following disease,
injury or loss of body part.
Physician - A doctor licensed by a state to practice medicine.
Pit - A recessed area found on the surface of a tooth, usually where the grooves of the tooth meet.
Plan administrator - Under ERISA, the person or entity named to administer a pension benefit plan or welfare benefit plan.
Plan termination insurance - Mandatory insurance provided through PBGC guaranteeing participants' "basic" retirement benefits,
which are those vested under the terms of a defined benefit plan, up to certain limits. (See Pension Benefit Guaranty Corporation.)
Plan Year (Fiscal year of plan) - Calendar, policy, or fiscal year on which the records of an employee benefit plan are kept.
Plaque - A film of sticky material containing saliva, food particles, and bacteria that attaches to the tooth surface both above and
below the gum line. When left on the tooth it can promote gum disease and tooth decay.
Podiatry - Care of the foot.
Point-of-service (POS) plan - A type of medical plan that generally provides a higher level of coverage, and may require less
paperwork, when the participant coordinates care through his or her primary care physician (PCP).
Points - Points are charges added to a mortgage loan by the lender and are based on the loan amount. One point is equal to 1% of
the original loan balance.
Policyholder - The group or individual to whom an insurance contract is issued.
Policy - A contractual arrangement between the insurer and the insured describing the terms and conditions of the life insurance
contract.
Policy loan - The policy owner can borrow from the cash value component of many permanent insurance policies for virtually any
purpose. Any policy loans that are outstanding at the time of death of the insured will be deducted from the benefit paid to the
beneficiary.
Political risk - Political risk is the risk that stock prices may decline dramatically during periods of political unrest or crisis.
Pontic - An artificial tooth used in a bridge to replace a missing tooth.
Portability - The ability to keep a benefit policy in force after termination of employment, or to retain a vested retirement plan
benefit.
POS plan - See point-of-service plan.
Post-tax contribution - See after-tax contribution.
Postponed retirement - When an employee chooses to work beyond the plan's normal retirement date. Date at which benefits
must begin are regulated by law. Benefits may be increased to reflect shorter payment length.
Postretirement increases - Adjustments in pension benefits after retirement, such as cost of living adjustments.
Power of attorney - A legal document authorizing one person to act on behalf of another.
PPO - See preferred provider organization.
Pre-Admission Certification (PAC) - The process through which the reviewer evaluates the attending physician's request for
admission to an acute care hospital and length of stay. Medical necessity is determined using established criteria. If PAC is part of
the health benefit plan, the admission or continued stay must be certified for full payment of a claim.
Pre-Authorization - A procedure governed by the Contract used to review and assess the medical necessity and appropriateness of
elective hospital admissions and non-emergency Care before the services are provided. Also called Pre-Certification and Prior
Authorization. Plans may limit coverage or deny benefit payments if pre-authorization is not obtained.
Predetermination of benefits - A participant and a dentist file a "predetermination of benefits" for planned dental care expected to
cost more than a certain amount. The suggested amount is the predetermination limit. This tells the participant in advance how
much the plan will cover, and advises the patient of alternative forms of treatment.
Preferred provider - A provider who has a contract with the plan to participate in the network. The contract includes provisions to
accept the reasonable and customary charge or allowable amount for a given service as the full fee.
Preferred provider organization (PPO) - A network of medical care providers who have agreed to provide services at negotiated
rates and have a contract with the plan.
Preferred provider organization (PPO) plan - A type of medical plan that features a network of preferred providers. When you elect
to receive care from providers in the network, the plan generally provides a higher level of coverage, and may require less
paperwork.
Preferred stock - Stock that pays specified dividends, and has preference over common stock in dividend payment, and in payment
if the corporation goes bankrupt. Unlike common stock, preferred stock generally does not carry voting rights.
Premium - The payment that the owner of a life insurance policy makes to the insurer. In exchange for the premium payment, the
insurer assumes the financial risk (as defined by the insurance policy) associated with the death of the insured.
Premolar - Another name for bicuspid.
Prenatal and early parenthood education - Education about pregnancy and parenting a young child.
Pre-retirement surviving spouse option - According to the Retirement Equity Act of 1984, this option must be offered to employees
upon reaching the age of 35. Coverage pays pension plan benefits for the lifetime of a surviving spouse if a vested employee dies
before retirement. The benefit amount must be equal to at least 50% of what the employee would have been entitled to if the
employee had retired at the date of death.
Pre-retirement survivor annuity - Protection that provides the employee's spouse with a monthly annuity if the employee dies after
leaving the company but before benefits begin.
Present value - The current worth of a future payment, or stream of payments, discounted at a given interest rate over a given
period of time.
Preventive Care - Care rendered by a physician to promote health and prevent future health problems for a Member who does not
exhibit any symptoms (for example, routine physical examination; and immunizations).
Pre-Certification - See pre-authorization.
Pre-Existing Condition - A health condition (other than a pregnancy) or medical problem that was diagnosed or treated before
enrollment in a Health Benefit Plan. Consult your Contract to determine whether Pre-Existing Conditions may be excluded from
your coverage.
Prescription drug - A drug that has been approved by the Federal Food and Drug Administration and which can only be dispensed
according to physician's prescription order.
Pre--tax contributions or premiums - See before-tax contributions.
Preventive care - The basic, comprehensive, routine level of health care typically provided by a person's general or family
practitioner, internist or pediatrician.
Preventive dentistry - Education and treatment devoted to and concerned with preventing the development of dental disease.
Preventive treatment - Any action taken by the patient, assisted by the dentist, hygienist, and the office staff that serves to
prevent dental or other disease. Examinations, cleanings, bitewing x-rays, sealants, and space maintainers are examples of
preventive treatment.
Primary beneficiary - A person named by the participant to receive insurance or retirement plan benefits when the participant dies.
If no primary beneficiaries are living when the insured person dies, benefits will be paid to the contingent beneficiary.
Primary care physician (PCP) - A physician, usually a family or general practitioner, internist or pediatrician, who provides a broad
range of routine medical services and refers patients to specialists, hospitals and other providers as necessary. Under some benefit
plans, a referral by the primary care physician is required to obtain services from other providers. Each covered family member
chooses his or her own PCP from the network's physicians.
Primary Insurance Amount (PIA) - An individual's monthly benefit at age 65 under the Social Security Act. Used as the basis for
determining other social security benefits. Also known as primary social security.
Primary teeth - The first set of teeth that humans get, lasting until the permanent teeth come in. Also referred to as deciduous
teeth or baby teeth.
Prime rate - The interest rate large U.S. commercial banks charge their largest and/or best customers.
Prior Authorization - See pre-authorization.
Private duty nursing - Services provided in the patient's home by a private duty nurse who is licensed and certificated by the state.
Private mortgage insurance - Private mortgage insurance protects the lender against the default of higher risk loans. Most lenders
require private mortgage insurance on loans where the loan-to-value ratio is higher than 80% (less than 20% equity).
Probate - Presentation of a person's will to a court, and appointment of an executor or administrator to carry out the court's
instructions, i.e., the process of settling a person's estate after death.
Profit sharing plan - A Profit-Sharing Plan is the most flexible and simplest of the defined contribution plans. It permits
discretionary annual contributions that are generally allocated on the basis of compensation. The employer will determine the
amount to be contributed each year depending on the cash-flow of the company. The deduction for contributions to a ProfitSharing Plan cannot be more than 15% of the compensation paid to the employees participating in the plan. Annual employer
contributions to the account of a participant cannot exceed the smaller of $30,000 or 25 percent of a participant's compensation.
Prohibited IRA transactions - Generally, a prohibited transaction is any improper (self-dealing) use of the IRA by the account
owner. Some examples include borrowing money from an IRA, using an IRA to secure a loan and selling property to an IRA.
Prophylaxis - The scaling and polishing procedure performed to remove calculus (tartar), plaque, and stains from the teeth.
Prospectus - A detailed statement prepared by an issuer and filed with the SEC prior to the sale of a new issue. The prospectus
gives detailed information on the issue and on the issuer's condition and prospects.
Prosthesis - For medical plans, a device designed to partially compensate for the loss of a body part, such as an artificial arm, leg,
eye, or portion of an internal bodily organ. For dental plans, an artificial replacement of one or more natural teeth or associated
structures.
Prosthetic Devices - A device which replaces all or part of the human body. These devices are necessary because a part of the body
is permanently damaged, is absent or is malfunctioning.
Prosthodontics - The dental specialty dealing with the replacement of missing teeth and other oral structures.
Provider - A health care facility, program, agency, physician or health professional that delivers health care services or supplies.
Provider Directory - Listings of providers who have contracted with a managed care network to provide care to its participants.
Provider Network - That set of providers contracted by the Network to provide services to members.
"Prudent man" standard - Fiduciaries must carry out their duties with the care, skill, prudence, and diligence that a prudent man
would use. Some states have written standards to which banks and other institutions must adhere.
P.S. 58 costs - The annual cost of life insurance protection provided by a retirement plan, or in excess of $50,000 in a group life
plan, that is included in a participant's taxable income.
Pulp - The hollow chamber inside the crown of the tooth that contains its nerves and blood vessels.
Pulpectomy - Removal of the entire pulp from the canals in the root.
Pulpitis - An often painful inflammation of the dental pulp or nerve.
Pulpotomy - The removal of a portion of the tooth's pulp.
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QDRO - See Qualified Domestic Relations Order.
QMCSO - See Qualified Medical Child Support Order.
Quadrant - The dental term for the division of the jaws into four parts, beginning at the midline of the arch and extending towards
the last tooth in the back of the mouth. There are four quadrants in the mouth; each quadrant generally contains five to eight
teeth.
Qualified beneficiary - Participants who are eligible for group health plan continuation coverage under COBRA due to their
participation on the day before a qualifying event.
Qualified Domestic Relations Order (QDRO) - A court action that requires part or all of an employee's retirement benefits to be paid
to meet a property settlement agreement, alimony, or child or dependent support payments, and that is determined to be
"qualified" under the Internal Revenue Code of 1986.
Qualified Medical Child Support Order (QMCSO) - A court action that requires coverage for a participant's child, and that is
determined to be "qualified" under the Internal Revenue Code of 1986.
Qualified plan - A defined benefit or defined contribution plan that the Internal Revenue Service approves as meeting the
requirements of Section 401(a) of the 1986 Internal Revenue Code. Receives favorable tax treatment. For example, employer
contributions are deductible as a business expense, within certain limits, and investment earnings are not subject to income tax
until distributed as benefits.
Qualified retirement plan - A qualified retirement plan is a retirement plan that meets certain specified tax rules contained primarily
in section 401(a) of the Internal Revenue Code. These rules are called "plan qualification rules". If the rules are satisfied the plan's
trust is exempt from taxes.
Qualifying event - An event that entitles a participant to continue, under COBRA (The Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended), group health coverage that would otherwise end. Examples include termination or change of
employment for the employee or spouse, annulment or divorce, or death of a covered employee.
Quarters of Covered Service (QCS) - The number of quarters of social security coverage that have been credited to an individual to
determine eligibility for social security benefits.
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Rabbi trust - An irrevocable trust established by an employer to provide supplemental executive retirement benefits, deferred
compensation, or similar benefit obligations. Trust assets, however, still remain subject to the claims of the employer's general
creditors in the case of bankruptcy or insolvency.
Radiation Therapy - Treatment of illness or disease by x-ray, radium, cobalt or high energy particle sources.
Real estate - Ownership in buildings and land, as well as rights to the air above and the earth below.
Reallocation - Redistributing assets among various investment options.
Reason Code - Reason codes provide explanations of claim status for pended and denied claims.
Reasonable and customary charge - A term used in many health welfare plans. Defined as the price at or below which the majority
of health-care professionals of similar expertise charge for similar procedures within a specific geographical area.
Reasonable Charge - See allowable charge.
Rebase - The process of refitting a denture by replacing the base material.
Receded gums - A condition characterized by the abnormal loss of gum tissue due to infection or bone loss.
Recurring clause - Provision in some welfare plans specifying that recurrences of illnesses within a defined time frame will qualify
as a continuation of the prior disability.
Reduced-hour leave - Some companies' FMLA policy allows an employee to take the FMLA leave as a reduction in the number of
hours worked per day or per week.
Referral (dental) - When a dental patient from one office is sent to another dentist, usually a specialist, for treatment or
consultation.
Referral (medical) - If a primary care physician determines that a participant has a condition which requires the attention of a
specialist, the physician makes a referral to a specialist. Under some benefit plans, a referral by the primary care physician is
required in order to obtain services from other providers that will be covered by the plan.
Refinance - To refinance one's mortgage is to retire the existing mortgage using the proceeds of a new mortgage and using the
same property as collateral. This is usually done to secure a lower interest rate mortgage or to access equity from the property.
Registered representative - A registered representative is licensed with the NASD (National Association of Securities Dealers),
through association with an NASD member broker / dealer, to act as an account representative for clients and collect commission
income.
Rehabilitation - Services such as those provided by a physical, speech or occupational therapist as part of recover from injury or
illness. This may also refer to long-term disability plans that continue some financial assistance while a person seeks rehabilitation.
Reimbursement account - See flexible spending account.
Religious leave - Time off an employee takes for religious reasons.
Reline - The process of resurfacing the tissue side of a denture with a base material.
Renter's insurance - Property/liability insurance for a renter's goods.
Replantation - The return of a tooth to its socket.
Reserves - Money retained by an insurance company or employer to fund its future liabilities.
Residential care facility - Facility that provides care for those unable to care for themselves due to physical, mental, or emotional
conditions.
Residential treatment - A type of care provided under some plans. Care is provided 24 hours a day, under the supervision of
medical professionals, and is generally less intense than the care provided in a hospital.
Resorption - The breakdown and assimilation of the bone that supports the tooth.
Respiratory Therapy - Treatment to improve or preserve lung function.
Respite care - Short-term care provided in a patient's home to give the primary caregiver time off, or short-term child care to
provide a break for a parent.
Restoration - Any material or devise used to replace a lost tooth structure (filling, crown) or to replace a lost tooth or teeth (bridge,
dentures, complete or partial).
Restorative surgery - Surgery to restore an area seriously injured in an accident, to correct a birth defect that causes a functional
disability, or to restore breast tissue which was surgically removed in response to an illness. Where there has been breast
disfigurement for a female participant or covered dependent due to illness, surgery or mastectomy, legislation requires certain
plans to cover reconstructive surgery on the other breast.
Retainer - A removable dental appliance, usually used in orthodontics, that maintains space between teeth or holds teeth in a fixed
position until the bone solidifies around them.
Retention - An insurer's operational cost. Included administrative and claim processing expenses, premium taxes, and profit and
risk changes.
Retirement Equity Act of 1984 (REA) - Federal law that amended ERISA. Granted greater pension equity for women and surviving
spouses.
Retrograde filling - A method of sealing the root canal by preparing and filling it from the root tip, generally done at the completion
of an apicoectomy.
Retrospective Agreement - A device by which a promissory note is substituted for cash premium payments. The note is called only
in the event of excessive claims.
Revenue ruling - A judgment or decision by the Internal Revenue Service relative to a specific tax question.
Revolving debt - A debt or liability that does not have a fixed principal balance or payment. Examples include credit cards, home
equity lines of credit, etc.
Rider - A life insurance rider is an amendment to the standard policy that expands or restricts the policy's benefits. Common riders
include a disability waiver of premium rider and a children's life coverage rider.
Risk - Investment risk is the chance that the actual returns realized on an investment will differ from the expected return.
Roll-in contribution - A distribution an employee received from a former employer's plan, or withdrew from a conduit IRA, and
deposited in a qualified retirement plan with the current company that accepts rollovers.
Rollover - The movement of funds from one investment to another. To provide investment flexibility, participants can shift
investment in one individual retirement plan to another without incurring any tax liability. For example, a person could roll over
money from an employer's 401(k) plan into an IRA without paying a penalty tax.
Root - The part of the tooth below the crown, normally encased in the jawbone. It is made up of dentin, includes the root canal,
and is covered by cementum.
Root canal - The hollow part of the tooth's root. It runs from the tip of the root into the pulp.
Root canal therapy - The process of treating disease or inflammation of the pulp or root canal. This involves removing the pulp and
root's nerve(s) and filling the canal(s) with an appropriate material to permanently seal it.
Root planning - The process of scaling and planning exposed root surfaces to remove all calculus, plaque, and infected tissue.
"Rule of 45" - A vesting schedule using both the participant's age and years of service. The Tax Reform Act of 1986 has mandated
vesting schedules for plan years beginning after December 31, 1988, which makes this obsolete.
“Rule of 72” - A way to determine the effect of compound interest. Divide 72 by the expected return on your investment. If your
expected return is 8%, assuming that all interest is reinvested, you will double your money in 9 years.
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Safety of principal - Safety of principal is an objective that emphasizes the security of the invested principal.
Salary reduction simplified employee pension (SARSEP) - A SARSEP is a simplified alternative to a 401(k) plan. It is a SEP that
includes a salary reduction arrangement. Under this special arrangement, eligible employees can elect to have the employer
contribute part of their before-tax pay to their IRA. This amount is called an "elective deferral".
Salary replacement percentage - Some plans, such as disability benefit plans, are designed to replace a percentage of the
participant's salary.
SAR - See summary annual report.
Savings plan - See 401(k) plan.
Scaling - A procedure used to remove plaque, calculus (tartar), and stains from the teeth.
Sealant - A composite material used to seal the decay-prone pits, fissures, and grooves of children's teeth to prevent decay.
SEC - See The Securities and Exchange Commission.
Second mortgage - A mortgage on real property in a junior position to a primary or first mortgage. The increased risk associated
with a second mortgage is often reflected in a higher interest rate and a shorter term of repayment.
Second opinion - A second physician's opinion concerning the need for a service, such as surgery, recommended by your physician.
This may also include a third physician's opinion if the second opinion conflicts with the first opinion.
Secondary beneficiary - See contingent beneficiary.
Section 89 - Section of the Internal Revenue Code, added by the Tax Reform Act of 1986, that sets the nondiscrimination rules for
health care plans and group term life insurance. Repealed in December 1989.
Section 404 - Section of the 1986 Internal Revenue Code under which the contributions by an employer to a qualified plan are
claimed as a deduction for federal income tax purposes.
Secular Trust - An irrevocable trust created by an employer, in which the employer makes the contributions to an executive's
account in the trust. Unlike a Rabbi Trust, the executive's benefits are taxed in the year in which he/she becomes vested.
However, the benefit is more secure because it belongs to the executive.
Securities and Exchange Commission (SEC) - The main regulatory body regulating the securities industry is called the Securities
and Exchange Commission.
Self-administered trusteed plan - A retirement plan under which contributions to purchase pension benefits are paid to a trustee,
generally a bank, which: 1) invests the money; 2) accumulates the earnings and interest; and 3) pays benefits to eligible
employees under the terms of the retirement plan and trust agreement. This plan is administered by the employer, or by a
committee appointed by the employer.
Self funding - Employer is liable for funding all medical claims. The plan may or may not have stop-loss insurance to limit the
employer's liability.
Self-insured plan - Generally a trusteed plan. The employer, in effect, insures all aspect of the medical plan, and is liable for
funding all claims.
Separate account - A fund held by an insurance company apart from its general assets. Generally used for investment of plan
assets in equities or other specialized asset forms.
SERP - See Supplemental Executive Retirement Plan.
Service Area - The geographic area in which a Health Benefit Plan is authorized to deliver Covered Services through a Network.
Settlement options (Payment options) - Alternative forms of benefits that a participant may elect in lieu of the basic form of benefit
provided for in a defined benefit or defined contribution plan.
Sex change - Medical procedures to change a male to a female or a female to a male.
Short sale - The sale of stock that you do not yet own in order to take advantage of an expected share price decline. If the stock
declines in price, the stock is purchased at the now lower price and the short position is closed.
Short-Term Disability plan (STD) - A plan which covers an employee's temporary inability to perform his or her job. This may
include a sickness and accident insurance program, as well as paid sick leave.
Short-term investment - An investment that matures in one year or less.
Short-term military service - Military service by a participant that is considered short-term by the plan.
Sick child care - Special day care designed for children sick enough that their usual care provider will not accept them.
Sick leave - Time off, generally paid in full, due to illness or injury.
Sick leave cashout - Some companies allow an employee to cash out accrued but unused sick leave at the end of a year, or at
termination of employment.
Simplified Employee Pension (SEP) - A SEP provides employers with a "simplified" alternative to a qualified profit-sharing plan.
Basically, a SEP is a written arrangement that allows an employer to make contributions towards his or her own and employees'
retirement, without becoming involved in a more complex retirement plan. Under a SEP, IRAs are set up for each eligible
employee. SEP contributions are made to IRAs of the participants in the plan. The employer has no control over the employee's IRA
once the money is contributed.
Single life annuity - A form of retirement benefit that provides monthly payments to the employee for life, with no benefits payable
after the employee dies. For some plans this is the automatic form of benefit for single employees, and available to married
employees with the spouse's signed, notarized consent.
Six-year molar - The first permanent tooth to erupt, usually between the ages of five and six.
Skilled Nursing Care - Covered Services provided primarily for assessing or treating an injury or illness and performed by or under
the supervision of a Provider. Your Health Benefit Plan may reserve the right to determine whether such services are Skilled
Nursing Care. Not all services provided by a Provider of Skilled Nursing Care are considered Skilled Nursing Care.
Skilled Nursing Facility (SNF) - A licensed facility (or a distinct part of a hospital) that is primarily engaged in providing continuous
Skilled Nursing Care and related services.
Small cap - A small cap stock is one issued by a company with less than $1.7 billion in market capitalization.
Smart card - A card with an embedded computer chip which stores more information, performs more functions and is more secure
than a credit card or debit card.
Social leave - See community leave.
Social Security - The Social Security Act of 1935 established what has become the Federal Old-Age, Survivors, Disability, and
Health Insurance System (OASDHI). The beneficiaries are workers who participate in the Social Security program, their spouses,
dependent parents, and dependent children. Benefits vary according to: 1) earnings of the worker, 2) length of time in the
program, 3) age when benefits start, 4) age and number of recipients other than the worker, and 5) state of health of recipients
other than the worker.
Social Security integration - See Integration with Social Security.
Social Security offset - Some programs, including some pension and long-term disability plans, are designed to provide a certain
level of total benefit, which includes expected Social Security benefits. Therefore, the plan pays the total benefit allowed minus the
expected Social Security Benefit.
Social Security option (Level income option) - An option in some defined benefit plans. the employee may elect to receive larger
plan payments before becoming eligible for social security. Once eligible for social security, plan payments are reduced to produce,
as nearly as practicable, a level total annuity to the employee including social security.
Socket - The hole in the jawbone into which the tooth fits.
Space maintainer - A dental appliance that fills the space of a lost tooth or teeth and prevents the other teeth from moving into the
space. Used especially in orthodontic and pediatric treatment.
SPD - See Summary Plan Description.
Specialists - Providers whose practices are limited to treating a specific disease (e.g., oncologists), specific parts of the body (e.g.,
ear, nose, and throat), a specific age group (e.g., pediatrician), or specific procedures (e.g., oral surgery).
Speech Therapy - Treatment to correct a speech impairment which resulted from birth, or from disease, injury, or prior medical
treatment.
Split dollar life insurance - Individual cash value life insurance contract arranged so that the employer and employee (or
beneficiary) split the death benefit. Annual premiums may be paid entirely by the employer or may be split between employer and
employee.
Spousal Consent - If a married participant under a qualified retirement plan wants to elect a form of benefit other than the
automatic form, or to name a beneficiary other than the spouse, this requires signed consent from the spouse, witnessed by a
notary public or a plan representative.
Spousal IRA - An individual can set up and contribute to an IRA for his/her spouse. This is called a "Spousal IRA" and can be
established if certain requirements are met. In the case of a spousal IRA, the individual and spouse must have separate IRAs. A
jointly owned IRA is not permitted.
Staff Model HMO - An HMO where doctors are employed by the health plan and provide care at a health care center facility.
Stainless steel crown - A pre-made metal crown, shaped like a tooth, that is used to temporarily cover a seriously decayed or
broken down tooth. Used most often on children's teeth.
Statement of account - Generally applicable only under a defined contribution plan, under which the employer is required by law to
provide participants with information as to the status of their accounts at least once a year.
Statement of vested and accrued pension benefit - Statement required to be given to vested terminations that must include
amount of accrued benefit earned to date, percentage of the accrued benefit that is vested, and the amount of the accrued vested
benefit.
Status change - Changes that, under federal regulations, permit an employee to make corresponding changes in enrollment for
certain benefits at times other than the annual open enrollment period. Such changes include a change in:
Eligibility (a child reaches the limiting age for coverage, gets married or leaves school)
Employment (beginning or termination of employment or change in work schedule by the employer, a spouse or child)
Marital status (marriage, death of spouse, divorce, legal separation or annulment)
Number of family members (birth, adoption or placement for adoption, or death)
Residence or worksite (to move outside a plan's service area)
Step-rate plan - A form of an excess-integrated plan in which benefits are calculated by assigning different values to income above
and below defined levels (i.e., Social Security wage base).
Stock - Stock certificates represent an ownership position in a corporation. Stockholders are often entitled to dividends, voting
rights, and financial participation in company growth.
Stock bonus plan - A defined contribution plan under which distributions are normally made in the form of employer stock. Subject
to the same rules and regulations as profit sharing plans.
Stock dividends - The investor's share of the income earned by the company issuing the stock.
Stock exchange - A market for trading of equities, a public market for the buying and selling of public stocks.
Stockholder - Someone who holds one or more shares of stock, or ownership in a corporation.
Stock options - Options to buy or sell stock at a particular price (called the exercise price) for a specified period of time (called the
exercise period). When a company grants stock options to its employees, the exercise price is generally at or below the market
price at the time the options are granted.
Stock purchase plan - A qualified stock purchase plan is an organized program for employees to buy shares of company stock. It
may allow employees to set up periodic deductions to purchase stock, and/or may allow them to purchase additional shares with
dividends. The employer may contribute, or offer stock at a fixed price (usually below market value). A nonqualified program allows
select employees to purchase stock. They must meet eligibility requirements and hold stock for a set period of time.
Stock rights - See stock options.
Stock split - An action by a corporation that results in more outstanding shares of its stock but does not change ownership. For
example, if there are 10 million shares outstanding and the stock is trading at $50 per share, a 2-for-1 stock split would result in
20 million shares outstanding at $25 per share. A person who held 5 shares valued at $250 before the split would hold 10 shares,
still valued at $250, after the split.
Stock symbol - The letters used to identify corporations at the stock exchanges where their stock is traded (such as XON is Exxon).
The letters may be the same as or different from the letters used in newspaper listings.
Stop-loss order - This is when you tell your broker to sell the stock if it drops to a certain price.
Strike price - See exercise price.
Subgingival scaling - The removal of calculus and plaque found on the tooth below the gum line.
Submission Date - The date the claim was submitted and/or received by the Plan's Claims Administrator.
Subrogation - A company's right to recover benefits paid in a lawsuit if the injury was the fault of another. For example, if a
medical plan pays a participant's expenses due to injury in a car accident, and later the participant receives a settlement from the
driver at fault, the medical plan can recover certain benefits from the participant.
Subscriber - Eligible employees, retired employees or members of the Group whose coverage is in effect and whose name appears
on I.D. Cards. It also means the individual in whose name a Contract is issued. The Subscriber can enroll dependents under family
coverage.
Substance Abuse/Chemical Dependency - Misuse, excessive use, or improper use of alcohol or drugs to the extent that such use
contributes to physical, mental or social dysfunction.
Succession planning - Planning for a business to pass to the next generation of owner/managers.
Summary Annual Report (SAR) - Participants are entitled to this annual report on the financial strength of a qualified benefit plan.
Summary of Material Modifications (SMM) - Participants are entitled to this summary when a benefit plan makes material changes
to its existing benefits or eligibility provisions.
Summary Plan Description (SPD) - A document that ERISA requires be made available to participants and beneficiaries (and to the
DOL upon request). It must summarize the benefit plan in an easy-to-read format and cover key plan provisions.
Supplemental Executive Retirement Plan (SERP) - A nonqualified plan that allows employers to offer higher benefits to highly paid
employees.
Supra gingival scaling - The removal of calculus and plaque found on the tooth above the gum line.
Surgery - A branch of medicine that treats injuries, deformities and illness through operative methods.
Surrender value - When a policy owner surrenders his/her permanent life insurance policy to the insurance company, he or she will
receive the surrender value of that policy in return. The surrender value is the cash value of the policy plus any dividend
accumulations, plus the cash value of any paid-up additions minus any policy loans, interest, and applicable surrender charges.
Systemic - Relating to the whole body.
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Taft-Hartley Act (Labor-Management Relations Act of 1947) - Based on the theory of equalizing the bargaining power of
management with that of labor. Controls conditions under which an employer may pay any monies to a representative of his
employee.
Takeover - Change in the controlling interest of a corporation. The takeover may be friendly (often called an acquisition) or
unfriendly (often called a hostile takeover).
Target benefit plan - A defined contribution plan under which the amount of employer contributions allocated to each participant is
determined under a plan formula, and on the basis of the amount necessary to provide a target benefit specified by the plan.
Tartar - See Calculus.
Tax credit - An income tax credit directly reduces the amount of income tax paid by offsetting other income tax liabilities.
Tax deduction - A deduction from taxable income. Tax is reduced because income is lowered.
Tax-deferred - The term tax deferred refers to the deferral of income taxes on interest earnings until the interest is withdrawn form
the investment. Some vehicles or products that enjoy this special tax treatment include permanent life insurance, annuities, and
any investment held in IRA's.
Tax-favored benefits - Designed to help employees meet special needs, these benefits are not taxed as current income. Can be
divided into two types: 1) tax-deferred benefits generally include employer contributions to public and private retirement and
profit sharing plans; and 2) tax-exempt benefits include employer contributions to group health and group life insurance up to
$50,000, and some smaller benefits.
Tax preparation services - Services to prepare participants' tax returns.
Tax Reduction Act (Employee) Stock Ownership Plan (TRASOP) - Under this type of arrangement (Act expired at the end of 1982),
an employer could take a tax credit for contributions of employer stock made to employee accounts based on qualifying capital
expenditures made by the company that year.
Tax Reform Act of 1986 (TRA '86) - Had a profound effect on employee benefits through overall reductions of income tax rates and
provisions directly affecting benefits. Pension and welfare benefit changes aimed at producing more comparable employee benefit
coverage on both ends of the compensation scale.
Tax sheltered annuity plan (also called a TSA or 403(b) plan) - Tax deferred annuity retirement plan available to employees of
public schools and colleges, and certain non-profit hospitals, charitable, religious, scientific and educational organizations.
Taxable wage base - The Social Security wage base, or the maximum amount of earnings that are considered wages for that year
in calculating Social Security benefits and determining social Security taxes.
Temporomandibular joint (TMJ) - The connecting hinge mechanism between the upper jaw and the base of the skull.
Temporomandibular joint (TMJ) syndrome - The problems associated with TMJ, usually involving pain or discomfort in the joints
and ligaments that attach the lower jaw to the skull or in the muscles used for chewing.
Tenants in common - Two or more people who own the same piece of property, with the inherent condition that if one of the
tenants die, his interest automatically passes on to his heirs.
Ten-year certain annuity - A form of retirement benefit that provides monthly payments for life, with payments guaranteed for at
least 10 years. The payments are reduced by a percentage based on your age when benefits begin. If the annuitant dies before all
guaranteed payments are made, the beneficiary or estate will receive payments for the rest of the 10-year "certain" period.
Term insurance - Term insurance is life insurance coverage that pays a death benefit only if the insured dies within a specified
period of time. Term policies do not have a cash value component and must be renewed periodically as dictated by the insurance
contract.
Term life insurance - Insurance for a specific period of time that provides only a death benefit (does not to accumulate cash values
the way whole life insurance does). Premiums are generally much lower than for cash value life insurance, but premiums increase
each year.
Testamentary trust - A trust created under the terms of a will and that takes effect upon the death of the testator.
Third molar - The last of the three molar teeth, also called wisdom teeth. There are four third molars, two in the lower jaw and two
in the upper jaw, one on each side. Some people are born without third molars.
Third Party Administrator (TPA) - A company that administers welfare plans and generally provides services similar to those of
insurance carriers.
$3,500 Rule - An ERISA rule (subsequently amended by REA) that gives an employer the right to pay a participant's pension
benefit in the form of a lump sum, even though the employee has not elected a lump sum. This can only be done if the conversion
of the normal annuity form into a lump sum results in an amount less than $3,500.
Thrift plan - An individual account plan that allows employees contributions on an after-tax basis, and generally features some
matching contributions by the employer.
Ticker symbol - A ticker symbol is a combination of letters that identifies a stock-exchange security.
Title - A legal document establishing property ownership.
Title search - A detailed examination of legal records to determine the history and legal ownership of a property.
Top heavy plan - Each year, a qualified plan must be tested to determine whether it is "top-heavy". Generally, a "top-heavy" plan
is one in which more than 60 percent of the benefits under the plan are for key employees (usually owners and officers). Additional
requirements apply to a top-heavy plan such as faster vesting and mandatory employer contributions.
Topical - Painting the surface of the teeth (such as fluoride treatment) or applying an anesthetic to the surface of the gums.
Torus - A bony elevation or protuberance of normal bone. Usually seen on the upper palate behind the front teeth or under the
tongue inside the lower jaw.
Total disability - In order to make a disability claim a person must meet the definition of disability set forth in the insurance
contract. There are two general definitions of disability used in today's contracts. The first definition is that the insured is unable to
perform all of the substantial and material duties of his/her own occupation. The second, and more restrictive, definition is that the
insured is unable to perform any occupation for which he/she is reasonably suited by education, training, or experience.
Transitional Benefits - When an employer changes health insurance carriers, transition plans enable participants already in
treatment to transition to a new in-network health provider. It gives the patient and their current provider a specific number of
days to discuss the patient's treatment plan and obtain authorization to continue treatment at the in-network benefit level for a
specified period of time, or to transition to a provider in the new network.
Trauma - Generally, serious and life-threatening injury requiring emergency treatment.
Treasuries - Negotiable securities of the U.S. government, backed by the full faith and credit of the government. Treasuries provide
investment return that is exempt from state and local income taxes but subject to federal income tax.
Treasury bill - Treasury bills, often referred to as T-bills, are short-term securities (maturities of less than one year) offered and
guaranteed by the federal government. They are issued at a discount and pay their full face value at maturity.
Treasury bond - Treasury bonds are issued with maturities of more than 10 years and are offered and guaranteed by the U.S.
Government. They are issued at a discount and pay their full face value at maturity.
Treasury note - Treasury notes are issued with maturities between one and 10 years. These notes are offered and guaranteed by
the U.S. Government. They are issued at a discount and pay their full face value at maturity.
Treatment plan - A list of the work the dentist proposes to perform on a dental patient based on the results of the dentist's x-rays,
examination, and diagnosis.
Trust agreement - An agreement between an employer and a trustee used in conjunction with a qualified plan. It defines the
trustee's powers and duties and makes provision as to how the funds of the plan shall be invested and how payment shall be made
to those who benefit under the plan. A trust agreement is always used for a noninsured plan, and may be used under some
insured arrangements.
Trust fund plan (Trusteed plan) - A pension plan for which the funding instrument is a trust agreement.
TSA - See tax sheltered annuity plan or 403(b) plan.
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Ultrasound - Use of high-frequency sound waves to obtain medical information that cannot be gotten by x-rays. Often used to
monitor the development of a fetus.
Uncontested adoption - An adoption in which all parties agree.
Uncontested guardianship - A guardianship proceeding in which all parties agree.
Underwriter (banking) - A person, banker or group that guarantees to furnish a definite sum of money by a definite date in return
for an issue of bonds or stock.
Underwriter (insurance) - The one assuming a risk in return for the payment of a premium, or the person who assesses the risk
and establishes premium rates.
Underwriter (investments) - In the bond/stock market means a brokerage firm or group of firms that has promised to buy a new
issue of bonds/shares from a government or company at a fixed discounted price, then arranges to resell them to investors at full
price.
Unemployment rate - The number of people unemployed measured as a percentage of the labor force.
Unfunded accrued liability - The excess of accrued liability over the actuarial value of assets.
Unisex rates - Insurance rates that do not differ by sex.
Unit credit actuarial cost method - A process that allocates pension cost to the year in which the benefit is earned.
Universal life insurance - An adjustable Universal Life insurance policy provides both a death benefit and an investment component
called a cash value. The cash value earns interest at rates dictated by the insurer. The policyholder may accumulate significant
cash value over the years and, in some circumstances, "borrow" the appreciated funds without paying taxes on the borrowed gains
(taxes may be required if policy is surrendered). As long as the policy stays in force the borrowed funds do not need to be repaid,
but interest may be charged to your cash value account. Premiums are adjustable by the policy owner.
Unmatched contributions - Contributions the employee makes that are over an employer's matched contribution limit.
Urgent - A medical condition with symptoms severe enough that postponing care for more than a given number of hours could
seriously harm the patient as defined by the plan.
Urgent Care - Services received for an unexpected episode of illness or injury requiring treatment which cannot be postponed, but
is not emergency care. Urgent Care conditions include, but are not limited to earache, sore throat, and fever not higher than 104°.
Treatment of an Urgent Care condition does not require use of an emergency room at a Hospital.
Utilization review - The process used to determine the Medical Necessity, appropriateness, efficacy or efficiency of health care
services. Techniques include inpatient admission review, continued inpatient stay review, discharge planning, post-care review and
case management.
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Vacation accrual/accrued balance - Vacation time an employee has earned but not used.
Vacation accrual schedule - The schedule under which an employee earns vacation time.
Vacation buy or vacation purchase - A plan that allows a participant to buy additional paid vacation time with company consent.
Vacation carryover - The maximum amount of accrued vacation a company allows an employee to carry over from year to year.
Vacation exchange plan - A plan that allows a participant to buy or sell paid vacation time with company consent.
Vacation sell plan - A plan that allows a participant to sell paid vacation time with company consent.
Vaccinations - See immunizations.
Variable annuity - An annuity under which the benefit amount varies in accordance with predetermined criteria; for example, the
value of the assets set aside to provide the annuity, or the Consumer Price Index.
Variable investment - A variable investment is any investment whose value, and therefore returns, fluctuates with market
conditions such as a common stock, a plot of raw land, and a hard asset.
Variable life insurance - A form of life insurance with steady premiums but a death benefit that fluctuates (above a guaranteed
minimum) with the value of investments backing the contract.
Variable match or variable matching contributions - The variable amount a company may contribute to the employee's 401(k)
account, In addition to the fixed match, based on the employee's matched contributions.
Variable rate mortgage (VRM) - A Variable Rate Mortgage offers an initial interest rate that is usually lower than a fixed rate, but
that adjusts periodically according to market conditions and financial indices. The rate may go up and/or down, depending on
economic conditions. To limit the borrower's risk, the VRM will almost always have a maximum interest rate allowed, called a "rate
cap."
Variable universal life insurance - A Variable Life insurance policy provides both a death benefit and an investment component
called a cash value. The owner of the policy invests the cash value in subaccounts selected by the insurer. The policyholder may
accumulate significant cash value over the years and "borrow" the appreciated funds without paying taxes on the borrowed gains
(taxes may be required if policy is surrendered). As long as the policy stays in force the borrowed funds do not need to be repaid,
but interest may be charged to your cash value account.
Venture capital - A common term for funds that are invested by a third party in a business either as equity or as a form of
secondary debt. In the event of failure or business wind-up, these funds rank behind all other secured creditors.
Vested - Benefits that have become fully owned by the participant.
Vesting - The law requires that a qualified plan have a schedule under which a participant earns an ownership interest in employer
provided contributions based on his or her years of service with the employer. Amounts contributed by the participant are always
100% vested.
Veneer - An artificial filling material, usually plastic, composite, or porcelain, that is used to provide an aesthetic covering over the
visible surface of a tooth. Most often used on front teeth.
Viatical settlement - Occurs when a person with terminal or chronic illness sells his/her life insurance policy to a third party for an
amount that is less than the full amount of the death benefit. The buyer becomes the new owner and/or beneficiary of the life
insurance policy, pays all future premiums, and collects the entire death benefit when the insured dies. Some states regulate the
purchase as a security while others may regulate it as insurance.
Voice response system (VRS) - A Voice Response System (VRS) is a menu-driven voice system that is accessed by dialing a phone
number. If you've ever called for customer support and received "automated support", then you've been serviced by a VRS.
Voluntary Employees' Beneficiary Association (VEBA) - A trust established to provide an employee benefit (typically health,
disability, or death benefit). Also known as a "501(c) (9) trust".
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W-2 Form - The form a company gives an individual at year's end that reports the individual's total earnings reported to the
government, and shows the total of all items withheld for various purposes, including federal, state, local and FICA taxes.
W-4 Form - The form employees fill out indicating the number of allowances the employee claims for the year.
Waiting Period - The period of time required by the employer or by the Health Benefit Plan, before the Member's coverage under
the Health Benefit Plan begins.
Waive - To purposely give up a known right.
Waiver of premium- A waiver of premium rider on an insurance policy sets for conditions under which premium payments are not
required to be made for a time. The most popular waiver of premium rider is the disability waiver under which the owner of the
policy (also called the policyholder) is not required to make premium payments during a period of total disability.
Welfare plan (welfare benefit plan) - Under ERISA, a plan maintained by an employer to provide certain benefits other than
retirement benefits (medical, disability, vacation plans).
Well Baby/Well Child Care - Routine care, testing, checkups and immunizations for a generally healthy child, typically from birth
through the age of six.
Wellness Program - A health management program which incorporates the components of disease prevention, medical self-care,
and health promotion. It utilizes proven health behavior techniques that focus on preventive illness and disability which respond
positively to lifestyle related interventions.
Whole life insurance - A traditional Whole Life insurance policy provides both a death benefit and a cash value component. The
policy is designed to remain in force for a lifetime. Premiums stay level and the death benefit is guaranteed. Over time, the cash
value of the policy grows and helps keep the premium level. Although the premiums start out significantly higher than that of a
comparable term life policy, over time the level premium eventually is overtaken by the ever-increasing premium of a term policy.
Will - The most basic and necessary of estate planning tools, a will is a legal document declaring a person's wishes regarding the
disposition of their estate. A will ensures that the right people receive the right assets at the right time. If an individual dies without
a will they are said to have died intestate.
Wisdom teeth - See third molar.
Withdrawal - A distribution from a retirement plan account.
Withdrawal liability - defined by the Multiemployer Pension Plan Amendment Act of 1980 (MPPAA). An employer who withdraws
from a multiemployer plan is liable for a share of the unfunded vested benefits. Limits set by law.
Witness duty - Time off work to serve as a trial witness.
Workers' Compensation Insurance - Each state has its own workers' compensation law. The laws all have the goal of providing
cash payment or medical care to cover health services for workers injured on the job, partial wage replacement benefits, and
rehabilitation services to restore workers to their fullest economic capacity. All benefits are totally employer financed.
Wrap account - An account offered by investment dealers whereby investors are charged an annual management fee based on the
value of invested assets.
Write-off - Any loan not expected to be recovered and is recorded as a loan loss.
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X-rays - Radiation of extremely short wavelength that can pass through various solids. X-rays are used to diagnose, photograph,
and even treat certain medical conditions.
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Year of service - Some plans determine an employee's eligibility for participation, vesting, or benefit amounts based on the
employee's length of service to the company. See the plan for the definition of a year of service.
Yield - The yield on an investment is the total proceeds paid from the investment and is calculated as a percentage of the amount
invested.
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Zero-coupon bond - A zero-coupon bond is a bond sold without interest-paying coupons. Instead of paying periodic interest, the
bond is sold at a discount and pays its entire face amount upon maturity, which is usually a one year period or longer.