Health Insurance Glossary

Health coverage comes with an alphabet of acronyms, and the difference between two of them can be the difference between comprehensive protection and a limited plan. This glossary defines the terms in plain English so you can read a plan — or a policy notice — with confidence.

How to use this: the entries are grouped by theme and, within each group, ordered so related terms sit together. When a term matters most for telling comprehensive coverage from a limited plan, we say so.

Coverage standards and benefits

Minimum essential coverage (MEC) — The baseline standard for comprehensive health coverage under the Affordable Care Act. ACA marketplace plans, most employer plans, Medicaid, and Medicare generally count as MEC. Short-term and fixed-indemnity plans generally do not — a key reason they aren't a substitute for a marketplace plan.

Essential health benefits (EHB) — A set of ten categories of care that ACA-compliant plans must cover, including things like hospitalization, prescription drugs, maternity and newborn care, mental health and substance-use services, and preventive care. Limited plans are not required to cover EHBs, which is why exclusions are common.

Guaranteed issue — A rule requiring an insurer to sell you coverage regardless of your health status, with no medical underwriting. ACA marketplace plans are guaranteed issue; you cannot be turned down or charged more for a pre-existing condition.

Medically underwritten — The opposite of guaranteed issue: the insurer reviews your health history and may decline you, exclude a condition, or set terms based on it. Short-term plans are typically medically underwritten.

Medical loss ratio (MLR) — The share of premium dollars an insurer must spend on medical care and quality improvement rather than administration and profit. The ACA sets minimum MLR standards for comprehensive plans; if an insurer falls short, it may owe rebates. Limited plans are not held to the same standard.

Limited and supplemental plan types

STLDI (short-term, limited-duration insurance) — Often called "short-term" health plans. Designed to fill a temporary gap, STLDI is medically underwritten, commonly excludes pre-existing conditions and key benefits, and is not minimum essential coverage. It is a bridge, not comprehensive coverage.

Excepted benefit — A category of coverage that sits outside the ACA's comprehensive-plan rules because it's meant to supplement, not replace, major medical insurance. Fixed-indemnity policies are a common example.

Fixed indemnity — An excepted-benefit product that pays a set cash amount per event (for example, per day in the hospital) rather than paying a share of your actual medical bills. It is supplemental and not comprehensive coverage or minimum essential coverage. For individual fixed-indemnity policies, a consumer-disclosure notice still applies.

Subsidies and cost help

Premium tax credit — A subsidy that lowers your monthly marketplace premium, based on your income and household size. It's a central reason a comprehensive ACA plan is often more affordable than people assume — worth checking before buying any limited plan.

Cost-sharing reduction (CSR) — Extra savings, available with certain marketplace plans for eligible lower-income enrollees, that reduce what you pay out of pocket (deductibles, copays, coinsurance) when you get care. CSRs work alongside the premium tax credit.

Enrollment timing

Open Enrollment Period (OEP) — The annual window when anyone can enroll in or change an ACA marketplace plan without needing a special reason.

Special Enrollment Period (SEP) — A time-limited window to enroll outside Open Enrollment, opened by a qualifying life event. SEPs are how most people get comprehensive coverage mid-year.

Qualifying life event (QLE) — A change that triggers an SEP — such as losing other coverage, moving, marriage or divorce, or the birth or adoption of a child. If you have a QLE, a marketplace plan is usually within reach right now.

Marketplaces and programs

FFM (Federally Facilitated Marketplace) — The federal ACA marketplace, used by states that rely on the federal platform. Consumers in these states enroll through HealthCare.gov.

SBM (State-Based Marketplace) — A marketplace a state runs itself, with its own enrollment website instead of HealthCare.gov.

SBM-FP (State-Based Marketplace on the Federal Platform) — A hybrid: the state operates its own exchange but has consumers enroll through HealthCare.gov's technology.

Medicaid expansion — A state's decision to broaden Medicaid eligibility to more low-income adults under the ACA. In states that expanded, more people qualify for comprehensive coverage at little or no cost; in states that didn't, some people fall into a coverage gap.

Coverage gap — A stretch of time with no health coverage — or, specifically, the situation in some non-expansion states where a person's income is too high for Medicaid but not enough to qualify for marketplace subsidies. Avoiding either kind of gap is a core goal when your coverage changes.

Want help turning these terms into a decision?

Definitions are a start; applying them to your situation is where they matter. As an independent, carrier-neutral brokerage, we can translate any plan's fine print and compare comprehensive marketplace and Medicaid options with you — free, with no obligation.

You may also want to read `article-what-is-minimum-essential-coverage` and `article-questions-before-buying-non-aca-coverage`.