Fully Insured: A fully-funded health insurance plan is purchased from insurance companies that assumes full risk for medical expenses. Policy costs are fixed and will not increase during the policy period as a result of the number or size of claims.

• HMO: Health Maintenance Organization. A form of health insurance where a group of doctors and other medical professionals offer care through the HMO for a flat monthly rate. Only visits to professionals within the HMO network are covered by the policy. All visits, prescriptions and other care must be cleared by the HMO in order to be covered. A primary physician (PCP) within the HMO network handles referrals.

• PPO: Preferred Provider Organization. A PPO has a network of healthcare providers that the insured may use. The PPO does not require you to use that network and allows you to see doctors and go to hospitals which are outside of the network at a greater expense to the policy holder.

Partially Self Funded: With a partially self-funded medical plan, a finite portion of the claim risk is shifted from the insurer to the employer (the "Plan Sponsor") in exchange for the potential of significant overall savings. Aside from lower plan costs, additional rewards include greater efficiencies in plan administration and greater freedom to design a health plan that best suits the company's culture and the needs of the employees. In addition, this approach gives the Plan Sponsor more information in a timely manner about the group's claims utilization so as to be proactive in making intelligent adjustments in Plan coverage, should a change in benefits become necessary.

The role of the TPA is to administer the medical plan, process and adjudicate claims and manage the intricate details of the plan. The Plan Sponsor directly advances money to cover the predictable and routine medical claims through a working fund administered and accounted for by the TPA. Liability is capped at the maximum ceiling per participant (the specific stop-loss level), after covered employees and/or their dependents have satisfied the Plan's calendar year deductible(s). 

Two policies are purchased to protect the Plan Sponsor against unpredictable large claims:

• SPECIFIC STOP-LOSS RE-INSURANCE to cover claims during the Plan Year of any single individual on the plan once the pre-established specific deductible threshold has been met, and

• AGGREGATE STOP-LOSS RE-INSURANCE to cap the employer's liability against the Plan experiencing unusually high cumulative claims among all participants during the Plan Year.

Consumer Driven Healthcare (CDHC) refers to health insurance plans that allow members to use personal Health Savings Accounts (HSAs), Health Reimbursement Arrangements (HRAs), or Flexible Spending Accounts (FSAs) to pay routine health care expenses directly, while a high-deductible health insurance policy protects them from catastrophic medical expenses. High-deductible policies cost less, but the user pays routine medical claims using a pre-funded spending account, often with a special debit card provided by a bank or insurance plan. If the balance on this account runs out, the user then pays claims just like under a regular deductible. Users keep any unused balance or "rollover" at the end of the year to increase future balances, or to invest for future expenses.