Company X is implementing an HSA plan next year with an annual HRA provided by their TPA.

If you didn't understand any part of that sentence, this post is for you.

Healthcare and insurance terminology can seem a bit overwhelming. That is why we've rounded up 21 popular healthcare terms all insured individuals should know and understand. 

1. Premium

The monthly fee incurred for an insurance plan.

2. Deductible

The amount of money that patients are required to pay before an insurance company will cover a claim.

3. Co-Payment

The amount required at the time one receives a specific type of health service. Insurance policies do not cover this and it does not count toward your deductible. It's a way for insurance companies to force more of your "skin in the game" and often prevents people from seeking care.

4. Co-Insurance

The amount patients must pay for a health service after they've met their deductible. This cost-sharing between the insurance company and the insured is normally expressed as a percentage. That is, an 80/20 coinsurance means that the insurance company covers 80% of the annual medical expenses, and patients are responsible for paying the remaining 20%. Often an insurance plan will include an out-of-pocket max that this amount will apply toward.

5. Out-of-Pocket Maximum

The limit on a patient's annual financial liability, or on how much they must pay during a policy period before an insurance pays 100%. A patient's deductible and coinsurance team up to meet this max. This is often considered the most confusing part of an insurance plan.

6. Health Savings Account (HSA)

An account used to save money on future health expenses for plans with high deductibles. Many employer health plans include an HSA because it's a tax deductible benefit and is cleverly disguised as "value added." HSA's are truly great, but lower deductible is always better.

7. Health Reimbursement Account (HRA)

Similar to an HSA, an HRA is a tax-deductible account used to pay for healthcare costs. However, as the name suggests, rather than funds accumulating in a separate account as the HSA does, the employer reimburses employee expenses after each occurrence. Employers like HRAs because they only have to fund the employee account when a reimbursable health care expense is incurred by the employee.

8. Health Risk Assessment (also HRA)

A health questionnaire, used to evaluate each participant's health risks. Generally, an HRA is provided in the form of an online or paper questionnaire with questions regarding demographic information, personal/family medical history, and lifestyle questions (exercise, diet, etc.).

9. Cost-Sharing

How employers and employees share the cost of their health plan. Employers always pay more, FYI. The 2014 Kaiser Private Insurance Study finds the average employer premium contribution is $12,011 and the average employee contribution is $4,823.

10. Premium Contributions

When an employer pays for only a portion of the premium. The rest is deducted from the employee’s paycheck. This is normal and almost 100% of corporately insured individuals pay premium contributions.

11. Fully-Insured Health Plans

The employer pays an annual, per-employee premium to an insurance provider. The insurance provider uses the premium to pay for claims that are covered in the chosen policy plan, while the covered person (employee, dependent) is responsible for paying any deductible, coinsurance, or co-payment. Premiums are only fixed for a year, but may change during the year if the number of employees enrolled changes. Fully insured plans are thought of as conventional wisdom, but are actually the minority.

12. Self-Funded Health Plans

The employer assumes full financial risk for the company. In other words, instead of playing annual premiums to an insurance company, he funds the employee benefit plan and pays for claims himself. Self-funded plans are customizable solutions designed to control losses incurred by a company.

13. Fixed Costs

One of two costs to consider in self-funded plans. Fees are charged on a per-employee basis and are thus predictable. Examples include administrative fees and stop-loss premiums.

14. Variable Costs

The other main cost in self-funded plans. Costs vary monthly depending on how much health care is used by covered persons. Includes claims payments.

15. Stop-Loss Insurance

Employers purchase stop-loss insurance help to balance the risk that self-funded plans present with regard to an extreme loss. This coverage reimburses employers for claims that exceed a pre-determined level.

16. Specific Coverage

One of two types of stop-loss coverage, wherein the employer pays for protection against a catastrophic loss from one specific person.

17. Aggregate Coverage

The second type of stop-loss coverage, which responds on an accumulation of individual losses, or an excess of claim expenditures for an entire plan. Losses are thus considered more predictable.

18. Administrative Services Only (ASO)

When self-insured employers hire an outside firm, such as an insurance company, to perform specific administrative services.

19. Third Party Administrator (TPA)

When self-insured employers contract with a TPA, the TPA will negotiate and process claims, pay providers, and fulfill any other administrative duties associated with the health plan. The TPA reports all dealings to the employer. TPA's operate much like insurance companies but do not assume any of the risk. TPA's are your friend.

20. Risk Management

Managing insurance rates, coverage availability, medical costs, accidents and catastrophes, and litigation.

21. On-Site Clinics

Primary care clinics located on-site or nearby an employer in order to help reduce overall healthcare costs, to help improve workforce productivity, to help remove the barriers to quality medical care.