Terms To Know

Before-Tax Contribution

A contribution for benefits deducted from your pay before federal income tax, FICA (Social Security), and most state and local income taxes have been calculated and deducted. Before-tax contributions reduce your taxable income and save you money in taxes.

Calendar Year

January 1 through December 31. This period is also known as the plan year for purposes of all Nortel health care plans.

Coinsurance

The portion (percentage) of covered expenses paid after you satisfy your deductible and/or copayment. For example, if your coinsurance is 70% of the amount of covered expenses, the plan will pay 70% of the eligible expenses, and you will pay the remaining 30%.

Copayment

The fixed dollar amount (not a percentage of the cost) you pay at the time you receive certain health care services, medications or supplies. Typical copayments (also referred to as “copays”) in the Nortel plans are for office visits, hospital inpatient stays and outpatient surgery. You’re responsible for paying the copayment at the time you receive services.

Deductible

Before benefit payments begin, you must satisfy an annual deductible. Typically, there are individual and family deductible amounts. When any one person satisfies his or her individual deductible, benefits for that person are payable at the applicable coinsurance rate.

When the deductibles for all family members combined reach the family deductible amount, the family deductible will be considered satisfied for that calendar year. However, to satisfy the family deductible, no one person can contribute more than his or her individual deductible amount. For example, under the 80/60 PPO option, no one person can contribute more than $400 (i.e., the individual in-network deductible) toward satisfying the $1,200 family in-network deductible.

Covered expenses you pay for both in-network and out-of-network care will count toward both (individual and family) deductibles.

Formulary

A list of approved drugs covered under your prescription drug benefits.

Generic Drugs

After a manufacturer’s exclusive rights to a brand-name drug expire, generic versions of these drugs can be manufactured and distributed by other manufacturers. The U.S. Food and Drug Administration requires that a generic drug be offered in the same form and have the same active chemical make-up as its brand-name equivalent. While the generic drug may be a different shape or color than the brand-name drug, the active ingredients are the same. In addition, the Food and Drug Administration requires that generic manufacturers meet the same quality standards as the original manufacturers.

Generic drugs are typically more cost-effective than brand-name drugs because generic manufacturers do not have to spend money on research and advertising. The major difference between generic and brand-name drugs is that the average cost of a generic drug is much lower than that of a comparable brand-name drug. Therefore, you’ll pay the lowest coinsurance amount when you purchase generic drugs.

Health Plan

Your health plan administers the medical options you enroll in—which means that it handles administration and claims, and has direct contact with your doctor when it comes to your coverage and benefits. When you have questions about your health benefits, you should contact your health plan directly.

In-Network

The level of benefits you receive when you seek care from in-network providers. For instance, the Medical Plan PPO options pay in-network benefits at a higher rate than out-of-network benefits. In-network providers include hospitals, doctors, and other health care providers, as well as pharmacies that have entered into an agreement to participate in a network—and thus, provide services for pre-negotiated, discounted fees. They should not bill you for any difference in cost between their usual rates and the pre-negotiated rates they’ve agreed to charge.

Lifetime Maximum

The total amount payable for covered medical services received while you are insured. For example, the lifetime maximum for in-network care under both the 80/60 PPO and 90/70 PPO options is unlimited.

Non-Preferred Brand-Name Drugs

These are brand-name drugs not included on the Medco Health formulary that may have one or more Medco Health formulary alternatives. When you choose these drugs, you’ll pay the highest coinsurance amount. Share the formulary with your doctor to find out whether a less costly drug (i.e., a generic or preferred brand-name drug) is available. To request a copy of the formulary, contact Medco Health at 1-800-711-3460 or visit www.medcohealth.com.

Out-of-Network

The level of benefits you receive when you seek care from out-of-network providers. If you seek treatment from an out-of-network provider (e.g., a hospital, doctor, or other health care provider—or a pharmacy), the plan will pay benefits at a lower level than it would for in-network benefits for the PPO options. These providers have not agreed to contracted rates and, therefore, may “balance-bill” you for the amount above the plan’s reasonable and customary (R&C) charge limitation.

Out-of-Pocket Maximum

The maximum amount you pay for your share of eligible covered expenses in a plan year. Once you reach the annual out-of-pocket maximum, the plan will pay 100% of any other covered expenses for the rest of the plan year. Please refer to the medical Summary Plan Description for additional information on charges that are not included in the out-of-pocket maximum (i.e., office visit copayments).

Preferred Brand-Name Drugs

These are brand-name drugs that are included on the Medco Health formulary and are marketed under a specific trade name by a pharmaceutical company. The brand-name drugs on Medco Health’s formulary have been selected by Medco Health’s independent pharmacy and therapeutics committee based on their safety, effectiveness and cost. These drugs may offer greater discounts than non-preferred brand-name drugs, thereby reducing both your and Nortel’s costs.

It is strongly recommended that you print and take the formulary with you when you visit your doctor. Before he or she writes a prescription, consult with himor her on whether a brand-name drug is included on the formulary—and therefore will cost you less. To request a copy of the formulary, contact Medco Health at 1-800-711-3460 or visit www.medcohealth.com.

Primary Care Physician (PCP)

A Primary Care Physician is chosen by a covered person and provides primary medical care in medical specialties such as internal medicine, pediatrics or family medicine.

Reasonable and Customary (R&C)

A charge for a covered expense under the Medical Plan or the Dental/Vision/Hearing Care Plan that is the normal charge made by a licensed practitioner for a similar service and does not exceed the normal charge made by most providers within the geographic area where the service is provided.

Reimbursement Account

Allows you to set aside money on a before-tax basis to pay for health care expenses (Health Care Reimbursement Account) or dependent care expenses (Dependent Day Care Reimbursement Account) incurred by you and your eligible dependents.

Specialist

A physician whose practice is limited to a specific particular branch of medicine or surgery other than general practice, internal medicine, pediatrics or family practice.