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 preexisting 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 preexisting 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.
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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 midyear.
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 nonexpansion 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 what "not minimum essential coverage" means and the 7 questions to ask before buying non-ACA coverage.
Sources
This article is general information, not insurance or legal advice. Plan terms and state rules vary; confirm the specifics of any plan and your state's requirements before you enroll. Last updated: 2026-07.
