The following is a glossary of terms for Cafeteria Plans.

Actively-At-Work Clause (Section 125)

A health care plan provision that delays eligibility for coverage for employees that are not actively at work on the day health care coverage would normally begin.

Administrative Simplification

The rules of HIPAA (the Health Insurance Portability and Accountability Act) regarding electronic transactions of health care data, security of electronic transactions of health care data, and the privacy rules regarding use and disclosure of protected health information.

Alternative Method

A method of calculating prior creditable health care coverage with reference to coverage under any one of five categories of benefits; mental health, prescription drugs, drug and alcohol substance abuse treatment, dental care, and vision care. The alternative method may be chosen by a health care plan in lieu of the standard method of crediting coverage.

Cafeteria Plan

An employer-sponsored, written plan, which offers eligible employees a choice between cash and qualified, nontaxable benefits such as health care.

Certified Cafeteria Plan Administrator

An HR professional who has completed the Cafeteria Plan Training & Certification Program and passed the accompanying certification exam.

Certificate of Creditable Coverage (Certificate of Prior Creditable Coverage)

The certificate required by HIPAA that shows the amount of creditable coverage an individual had (or currently has). Certificate of Creditable Coverage must be provided any time an individual loses coverage under the plan.

COBRA

The Consolidated Omnibus Reconciliation Act of 1985 allowing qualified beneficiaries the right to continue group health plan coverage after a qualifying event.

Creditable Coverage

the period of coverage an individual has under a group health plan subject to the HIPAA portability rules, individual insurance, Medicare, and other specified health plans.

Enrollment Date

The earlier of the first day of a waiting period imposed by a group health plan, or the first day of actual enrollment.

ERISA

Employee retirement Income Security Act of 1974.

Excepted Benefits

Certain benefits that offer health coverage but are not subject to the HIPAA portability rules.

ExclusionConditions or treatments that will not be covered by a health care plan.

Health Insurance Issuer

An insurance company, insurance service, HMO, or insurance organization licensed by a state to do business as a health insurance company, subject to state law.

HIPAA

The Health Insurance Portability and Accountability Act of 1996.

Late Enrollee

An individual that enrolls in a group health plan after the initial available enrollment period and who is not a special enrollee.

Look-back Rule

The six-month period prior to an individual�s enrollment date (or first day of a waiting period, whichever is first), for which medical advice, diagnosis, care, or treatment were received for which a preexisting condition exclusion may be applied.

Medicare

Government funded health insurance for elderly and disabled individuals who have contributed to FICA (Social Security and Medicare taxes).

NMHPA

The Newborns and Mothers Health protection Act requiring plans that offer maternity benefits a minimum hospital stay of 48 hours after delivery of a child, 96 hours if it was a cesarean delivery.

Non-Confinement Clause

Typically applicable to dependents, a health plan provision that delays eligibility for individuals that are confined to a hospital or other health care facility.

Participant

An employer or former employee who is eligible for benefits from a plan.

Plan Administrator

Under ERISA, the person or entity designated to act as the plan administrator in the plan documents. If no plan administrator is designated in the plan documents, the plan sponsor is the plan administrator. Often, in a single employer plan, the employer will be the plan administrator.

Plan Sponsor

In situations where there is a single employer plan, the employer is the plan sponsor. If more than one employer or groups of employees participates in a health care plan, the organization or association will be the plan sponsor.

Preexisting Condition

A condition, whether physical or mental, for which medical advice, diagnosis, care, or treatment were received within the six-months prior to the individual�s enrollment date (see enrollment date).

Qualified Beneficiary

An employee, spouse, or child of the employee who, had coverage the day before a qualifying event and are now eligible for COBRA continuation coverage. This includes a child born to, or adopted by, an employee or former employer while on COBRA continuation coverage.

Qualifying Event

The event that gives rise to an individual�s right to elect COBRA continuation coverage (termination, reduction in hours, death, divorce, loss of dependent status, and entitlement to Medicare).

Section 125 Plan

See Cafeteria Plan (a Cafeteria Plan is authorized under Section 125 of the Internal Revenue Code; hence, the terms "Cafeteria Plan" and "Section 125 Plan" are synonymous).

Special Enrollment

Mid-year enrollment rights that must be offered to individuals who have lost coverage under another plan or who have experienced marriage, or a birth or adoption of a child.

Standard Method

A method of determining the amount of creditable coverage an individual has without regard to categories of benefits.

WHCRA

The Women�s Health and Cancer Rights Act requiring group health plans that offer mastectomy coverage to include benefits for reconstructive

Catch-up contribution

In addition to the maximum contribution amount, a �catch-up contribution�, may be made by or on behalf of individuals age 55 or older who are not enrolled in Medicare

Co-insurance

A percentage the participant is responsible for even after a deductible has been met.

Co-pay

Usually a set fee for office visits, such as $20 for an appointment with the family physician.

Consumerism

Making the user responsible for his or her consumption by allowing the user to see and be partly responsible for the actual costs of health care

Custodian

Federal law requires that HSA investments be held in a trust or custodial account, and that a qualified HSA trustee or custodian be named. Generally, any entity that can be a trustee or custodian for Individual Retirement Accounts can be a trustee or custodian for HSAs.

Deductible

The amount the individual is responsible for before the health plan will pay for any expenses

Distribution

A distribution is any amounts that an eligible individual removes from his or her HSA, regardless of whether the amount was for eligible or ineligible expenses.

FSA

Flexible Spending Account

HDHP

See High Deductible Health Plan

Health Savings Accounts

Tax-exempt trusts or custodial accounts created exclusively to pay for the qualified medical expenses of an eligible individual, spouse, or dependent(s)

High Deductible Health Plan

An insured or self-insured health plan that satisfies certain requirements with respect to deductibles and out-of pocket expenses. Generally for individual coverage, the plan must have an annual deductible of not less than $1,000; for family coverage, the plan must have an annual deductible of not less than $2,000.

HIPAA

Health Insurance Portability Accountability Act

HRA

Health Reimbursement Arrangement

HSA

See Health Savings Account

Permitted Coverage

An individual may be eligible for �permitted insurance� or �permitted coverage� in addition to a high deductible health plan and still be eligible to make or receive a contribution to an HSA. �Permitted coverage� includes coverage (whether provided through insurance or otherwise) for accidents, disability, dental care, vision care, or long-term care.

Permitted Insurance

An individual may be eligible for �permitted insurance� or �permitted coverage� in addition to a high deductible health plan and still be eligible to make or receive a contribution to an HSA. Benefits for �permitted insurance� must be provided through insurance contracts and not on a self-insured basis.

Prohibited transaction

An individual also is prohibited from making certain investments that are considered �prohibited transactions�. These transactions involve certain sales, exchanges, or leasing of property between an individual and his or her HSA, or (any other interference with the independent status of the account).

QDROs

See Qualified Domestic Relation Orders

Qualified Domestic Relation Orders

The IRS has indicated that an individual�s HSA assets can be subject to a court order for legal separation or divorce, and that some or all of these assets can be transferred to another individual. Such orders � once specific procedures are followed - are called qualified domestic relation orders (QDROs).

Rollover

A situation in which a participant receives a distribution from an HSA and then deposits it into another HSA within specified time limits

SAR

Summary Annual Report

SPD

Summary Plan Description

Trustee

Federal law requires that HSA investments be held in a trust or custodial account, and that a qualified HSA trustee or custodian be named. Generally, any entity that can be a trustee or custodian for Individual Retirement Accounts can be a trustee or custodian for HSAs.