Glossary of Vision Insurance Terms

To understand vision insurance benefits, it sometimes helps to know the terminology commonly used to describe different plans. These definitions help explain concepts such as primary care provider and preferred provider organization (PPO):

calender year The 12-month period beginning Jan. 1 and ending Dec. 31.

co-insurance The amount of money a vision plan will pay for provider services.

co-pay The fixed amount a vision plan member is responsible for paying each time they receive services from a network provider.

coverage The eye care services listed as benefits in a vision insurance plan.

deductible An amount that must be paid by a vision plan member before the vision plan begins to pay its share.

flexible spending account (FSA) Sometimes called a cafeteria plan, an FSA allows an employee to use pre-tax dollars to purchase certain health benefits, such as vision insurance, which are not covered by conventional health insurance.

group vision insurance Vision insurance purchased through a group such as a business, association, or union.

HMO (health maintenance organization) A group of health care providers formed to serve certain health plan members. Health plan members usually are permitted to receive health care only from HMO providers.

HSA (health savings account) A savings account employees can pay into with pre-tax income to be applied to present and future healthcare expenses. To open an HSA, you must have a high-deductible health insurance policy.

individual vision insurance Eye care coverage sold to an individual as opposed to a group. The membership fee for an individual plan usually is higher than membership fees for participants in a group plan.

managed vision care Eye care provided to members of a preferred provider eye care network at below retail costs.

membership fee The annual fee paid to keep a vision plan in effect.

network Optometrists and ophthalmologists, eyewear and contact lens manufacturers, optical laboratories, and LASIK/PRK surgeons that have contracted with a vision insurance organization to provide eye care services at discounted rates.

out-of-network Optometrists and ophthalmologists, eyewear and contact lens manufacturers, optical laboratories, and LASIK/PRK surgeons that have not contracted with a vision insurance organization to provide eye care services at discounted rates.

PCP (primary care provider) An optometrist or ophthalmologist who is contracted by a vision insurance company to coordinate eye care for members of vision insurance plans.
 

POS (point-of-service) A group vision insurance plan that allows plan members to select eye care from out-of-network as well as network providers, but at a higher cost.

PPO (preferred provider organization) A network of healthcare providers organized by an insurance company to provide healthcare services to insurance policyholders at a fixed rate well below retail prices. Policyholders may opt to access out-of-network providers, but at higher costs.

premium The annual fee paid to keep a vision plan in effect.

provider Optometrists or ophthalmologists, eyeglass and contact manufacturers, optical laboratories, and LASIK and PRK surgeons that provide eye care.

vision benefits Eye care services provided by a vision insurance or benefits plan, to which plan members are entitled.

vision discount plans Large buying organizations formed to provide discounts on health services to its members; these plans technically are not related to health insurance.