Glossary  


  • Authorization:

     
    The Process which verifies that a card holder account is valid, that it is not above any fund/credit limit, and which reserves the transaction amount on the account. For Customers using evolution Benefits Real-Time Pharmacy Substantiation, the authorization also verifies the eligibility of the expense at the point of service.

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  • Auto – Substantiation:

     
    Using data to electronically verify that tax-favored benefit account funds were used for eligible services under IRS rules.

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  • Auto – Substantiation Rate:

     
    The Number of card swipes electronically verified divided by the total number of card transactions, expressed as percentage.

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  • Cafeteria Plan:

     
    According to IRS section 125, a cafeteria plan, including a flexible spending arrangement, is a written plan that allows employees to choose between receiving cash or taxable benefits instead of certain qualified benefits for which the law provides an exclusion from wages. If an employee chooses to receive a qualified benefit under the plan, the fact that the employee could have received cash or a taxable benefit instead will not make the qualified benefit taxable. Qualified benefits include accident and health benefits (but not Archer Medical Savings Accounts or Long-term care insurance), adoption assistance, dependent care assistance, group-term life insurance coverage (including costs that cannot be excluded from wages).

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  • Card, Debit:

     
    A true debit card is linked to a bank account with a variable balance (e.g. checking account) that is controlled by the account holder and has very few restrictions on where it can be used. Use of a debit card usually requires the cardholder to enter a Personal Identification Number (PIN) as part of authorization process.

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  • Card, Prepaid or Stored Value:

     
    A prepaid card is linked to a special purpose account over which the account holder does not have direct control, as he/she would a bank account (e.g. there may be restrictions on where funds can be used and how/whether funds may added or subtracted from the account). During the payment and authorization process, prepaid cards generally access an account on a remote database with filters that prevent inappropriate expenses on the card Benny ™ is a Prepaid Benefits Card.

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  • Card, Smart:

     
    A smart card has data chips embedded physically on the card that are capable of holding data related to the cardholder. To access the data, a smart card must be inserted into a “reader”. Smart cards have great potential for board application, but their use in the U.S has been limited due to the lack of merchants and other providers equipped with readers.

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  • Card Activation:

     
    A security process developed to prevent losses from fraudulent use of new and reissued bankcards stolen from the mail. The process requires the cardholder to take steps to confirm his/her identity upon receipt of credit card.

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  • Cardholder Agreement:

     
    The written understanding between the credit card issuer and the cardholder explaining the terms and conditions of a credit card account and use of the card.

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  • Carrier:

     
    A Company that provides medical, dental or vision insurance plans.

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  • Claim:

     
    A request by an individual (or his/her provider) to a plan for payment or reimbursement for provided services.

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  • Coinsurance:

     
    The percentage of a charge that the plan participant must pay for a covered service.

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  • Consumer-Directed Health Care (CDHC) or Consumer Driven Health Care:

     
    A system of health care coverage intended to give enrollees a financial stake in their health care and to encourage them to make informed choices about their care and treatment. CDH plans typically offer reduced premium costs in exchange for higher deductibles or other cost sharing measures, and often have a tax-favored personal health account (HRA or HAS) as a component. These plans may also provide incentives and tools to manage both health care decisions and the costs associated with them.

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  • Copayment or Copay:

     
    A flat dollar amount fee that a plan participant must pay for a covered service.

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  • Copayment Matching:

     
    One of the IRS-approved methods of electronic substantiation of card transactions. The system matches transaction amount to copayment amounts supplied by the employer group.

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  • Data Matching:

     
    One of the IRS-approved methods of electronic substantiation of card transactions. System matched transaction data to data received from PBM or carrier. Data matching can occur in real time at the point of service or retrospectively after the transaction has taken place.

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  • Deductible:

     
    The amount covered expenses an individual (or family) must pay before benefits become payable by an insurance plan; usually determined on a calendar or plan-year basis.

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  • Decline:

     
    A determination at the point of service that a transaction cannot be approved for payment. Common reasons for declined transactions include insufficient account balance, unactivated card, expired card, and inappropriate merchant category.

    For Customers using Real-Time Pharmacy Auto Substantiation, a transaction will be declined if it does not match up with a corresponding Pharmacy Benefit Manager (PBM) claim at the point of Service.

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  • Denial of Claim:

     
    Refusal by a health plan to pay or reimburse a Claim.

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  • Eligibility:

     
    A generic term applying to enrollment benefits, service reimbursement, etc. most commonly defined as the determination of whether a participant qualifies for coverage.

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  • Eligible Service:

     
    For a Tax-favored benefit account, eligible services are those that the IRS has specified as acceptable for payment/reimbursement for the particular account type.

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  • FICA:

     
    Under the Federal Insurance Contributions Act (FICA), 12.4 percent of an employer’s earned income up to an annual limit must be paid into Social Security, and an additional 2.9 percent must be paid into Medicare. For a wage or salaried employee, the employee pays only half the FICA bill (6.2 percent for Social Security plus 1.45 percent for Medicare), and the tax is automatically withheld. The Employer contributes the other half. For most people that means 7.65 percent of their paycheck is withheld and their company pays another 7.65 percent on their behalf. Tax-favored benefits, like FSAs, reduce the amount of the employee’s income (and the employer’s payroll) subject to this tax.

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  • FSA dependent Care:

     
    Flexile Spending Account – Dependent Care
    A program under section 125 of the Internal Revenue Code that allows an employee to set aside a part of salary on a pre-tax basis and use the money to pay for dependent care expenses for a child under the age of 13 or for a spouse or other adult dependent who is incapable of self-care. To qualify for the advantage of a pre-tax reimbursement, the dependent care FSA must follow certain rules established by the Internal Revenue Service (IRS).

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  • FSA Health Care:

     
    Flexile Spending Account – Health Care
    A program under section 125 of the Internal Revenue Code that allows an employee to set aside a part of salary on a pre-tax basis and use the money for healthcare expenses the employee incurs for him/herself or for his/her eligible dependents. To qualify for the advantage of a pre-tax reimbursement, the Health care FSA must follow certain rules established by the Internal Revenue Service (IRS).

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  • Grace Period:

     
    A specific period of time after the end of the calendar or plan year during which the participant may continue to submit claims for services provided during the previous calendar or plan year. In 2005, the IRS enhanced the FSA grace period to allow employers the option of offering a 2-2 ½ month period during which FSA participants could continue to obtain services for payment under the previous year’s FSA.

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  • Health Reimbursement Accounts (HRAs):

     
    Also called Health Reimbursement Arrangements
    A program under section 105(b), defined in IRS notice 2002-45, which an employer can offer, that reimburses employees for certain medical expenses on a nontaxable basis. The employing organization pays all HRA expense; no employee salary reduction contribution is permitted. Reimbursements under an HRA are subject to fewer restrictions than under Health care FSAs. The unused portion of the employing organization’s contribution can be carried over and accumulated for future reimbursements from year to year if the employing organization chooses to offer such an arrangement, Medical Expenses.

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  • Health Saving Accounts (HSA):

     
    A program under the Medicare Prescription Drug, improvement, and Modernization act of 2003 that became available in January 2004. HSAs combine a qualified high deductible health plan (HDHP) with a tax free savings account (the HSA). Enrollees or their employers or both make tax-free contributions to the HAS. Enrollees can draw funds from their HSAs tax-free for out-of-pocket medical expenses. Once an enrollee reaches his/her health insurance deducible, The HDHP begins to pay for all or part of the medical care.

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  • High Deductible Health Plan (HDHP):

     
    A Health benefit plan that offers lower premium in exchange for higher annual deductibles when compared to traditional health plans. To be an HSA-compatible or “qualified” HDHP, the plan must meet IRS requirements for minimum deductibles and out-of -pocket maximums.

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  • Inventory Information Approval Systems (IIAS):

     
    Merchant systems that separate FSA eligible items from non-eligible items at the point of service so that FSA-eligible items may be purchased with a benefits debit card, while the purchaser is asked for a different form of payment foe the non-eligible items.

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  • Multi- Account Staking:

     
    The ability not only to have multiple accounts on a single card, but also to determine at the point of sale which account(s) should be accessed in which order.

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  • Open Enrollment Period:

     
    A period of time prior to the beginning of the plan year during which eligible employers may change their benefit elections.

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  • Out-of-Pocket Maximum:

     
    The total amount of the calendar year deductible plus the amount of any coinsurance and/or copays a covered person must pay each calendar year for covered services before benefits will be paid at 100 percent. Some services may not apply to the out-of-pocket maximum.

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  • Over-the-Counter (OTC) Items:

     
    Medications or other health related goods that do not require a prescription; The IRS has ruled that participants may use FSA funds for the purchase of certain OTC items.

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  • Participant:

     
    In a card program, the participant is the covered employee or cardholder.

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  • Pharmacy Benefit Manager (PBM):

     
    A company under contract with a health plan, employer group, or government program to manage pharmacy networks lists of preferred medications (formularies), drug utilization review, outcomes management, and/or disease management. The aim is to save money while not adversely affecting outcomes.

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  • Premiums:

     
    The Amount paid by the customer on a periodic basis for coverage under a benefit plan.

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  • Provider:

     
    A person (Doctor, nurse, dentist or therapist) or institution (hospital or clinic) that provides medical care.

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  • Qualified Transportation Account (QTA):

     
    A program established under section 132 of the internal Revenue Code that allows employees to set aside a part of salary on a pre-tax basis and use the money to cover qualified transportation and parking expenses incurred to and from their place of work. Within a QTA, there are two subcategories, a Mass transit Account and a Parking Account. To qualify for the advantage of a pre-tax reimbursement, the QTA must follow certain rules established by the Internal Revenue Service (IRS) QTAs were previously called Transportation Management Accounts(TMAs).

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  • Real-Time Authorization:

     
    A process of transmitting card information on-line to receive approval that the cardholder’s account is open and has the appropriate funds to allow authorization of the transaction in the pharmacy.

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  • Real-Time PBM Auto Substantiation:

     
    During the card swipe authorization in the pharmacy, the Benny ™ transaction is matched to real-time data from the Pharmacy Benefit Manager (PBM). If they match, the transaction is considered 100 percent substantiated and requires no further action. If they do not match, the transaction is declined at the point of service.

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  • Recurring Expense logic:

     
    One of the IRS-approved methods of electronic substantiation of card transactions. After a transaction has been substantiated once, transactions for the same amount in the same setting do not require another review.

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  • Settlement:

     
    The process by which authorized transactions are submitted to card issuers for payment.

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  • Substantiation:

     
    The process of verifying that tax-favored benefit account funds were used for eligible services under IRS-rules. Auto substantiation is this process performed electronically. (See Auto-Substantiation).

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  • Third Party Administrator (TPA):

     
    A Company that administers benefit plans (or certain processes related to those benefits) on behalf of an employer or health plan.

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  • Year, Calendar:

     
    January 1 through December 31 of the same year.

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  • Year, Plan or Benefit:

     
    The Twelve-month period between plan renewals.

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