Glossary of Benefits Terms

A

ACA (Affordable Care Act)

The 2010 federal law that reshaped health coverage rules for employers and individuals. It set the employer-mandate framework, coverage standards, and reporting obligations that larger employers must satisfy. It is the backdrop for much of the compliance vocabulary below.

ACA employer mandate

The requirement that an Applicable Large Employer offer affordable, minimum-value coverage to its full-time employees or face potential penalties under Section 4980H. It applies once an employer reaches 50 full-time and full-time-equivalent employees.

ACA-compliant benefits

Coverage that meets the Affordable Care Act's applicable standards for the situation, which for a large employer generally means offering a plan that provides minimum essential coverage, delivers minimum value, and is affordable to full-time employees. Optiv CompleteCare and PremierCare are the Optiv designs that add ACA-compliant major medical, funded by the Section 125 savings underneath, for employers at or approaching the Applicable Large Employer threshold. Optiv Advantage on its own is a supplemental design that sits alongside major medical rather than serving as the ACA-compliant plan.

Accident insurance

A supplemental policy that pays a fixed cash benefit when a covered accidental injury occurs. Like other fixed-benefit coverage, it pays on the event rather than reimbursing a documented bill.

Administrative fee

The per-employee-per-month amount charged to administer the plan. It is netted against the employer's payroll-tax recovery rather than billed on top, so the recovery figure presented to the employer already accounts for it.

Affordability safe harbor

A set of IRS methods, such as the W-2, rate-of-pay, and federal poverty line safe harbors, an employer can use to show that the coverage it offers is affordable under the ACA, which affects potential employer-mandate penalties.

ALE (Applicable Large Employer)

An employer with 50 or more full-time and full-time-equivalent employees. At this threshold, ACA employer-mandate obligations and related reporting apply. It is the point at which layering ACA-compliant major medical becomes most relevant.

Ancillary benefits

Secondary coverages that round out a benefits package, such as dental, vision, accident, and critical illness. They are added on top of core medical coverage rather than replacing it.

B

Beneficiary

The person designated to receive a benefit payment. In health and indemnity coverage, benefits are typically paid to the covered employee or member.

Benefit schedule

The list in a supplemental or indemnity policy that states the fixed dollar amount paid for each covered event, such as a hospital admission or an emergency room visit. It is how a fixed indemnity benefit is defined and priced.

Benefit-eligible

An employee who meets a plan's criteria to enroll, often defined by hours worked, employment status, or a waiting period the employer sets.

C

Cafeteria plan

The common name for a Section 125 plan. It lets employees choose between cash and qualifying pre-tax benefits, like selecting items from a menu. The name describes the choice mechanism, not any single benefit.

Care Navigation

A dedicated care team that routes a member to the right site of care and helps coordinate specialist referrals. It is part of the Optiv Advantage care suite and helps reduce unnecessary emergency or urgent-care use.

Care Suite

The set of virtual care services available to members and their families under Optiv Advantage, including Virtual Primary Care, Virtual Urgent Care, behavioral health, chronic-care management, Care Navigation, dermatology, and specialist messaging. It is delivered with no copay for the whole family through the Member App.

Carrier

The licensed insurance company that bears the risk and pays claims under an insured plan. Optiv Advantage is provided by an A-rated, state-licensed insurance carrier.

Claims adjudication

The process by which a carrier or its administrator reviews a submitted claim, confirms it meets policy terms, and determines the payable amount. Under Optiv Advantage the employer does not adjudicate claims.

COBRA

The federal law that lets employees and dependents continue group health coverage for a limited period after a job loss or other qualifying event, generally at their own expense.

Coinsurance

The share of a covered cost a member pays after meeting the deductible, expressed as a percentage. Fixed indemnity benefits pay a set amount and do not work on coinsurance.

Compass

The Section 213(d) expense-tracking tool included with Optiv Advantage. It links a member's accounts, reads receipts, and identifies qualifying medical spend automatically, so eligible dollars are captured rather than lost. It supports the Health Maintenance Benefit by capturing the eligible Section 213(d) spend behind it.

Constructive receipt

A tax doctrine holding that money an employee could have taken as cash is taxable even if they chose a benefit instead. Section 125 is the specific exception that lets an employee choose a pre-tax benefit over cash without triggering constructive receipt, which is why the election has to follow the plan's rules.

Contingent worker

A part-time, temporary, seasonal, or gig worker who often falls outside traditional benefit eligibility. Optiv Access is designed to extend entry-level virtual care to this group.

Copay

A fixed dollar amount a member pays for a covered service. The Optiv Advantage virtual care suite is provided with no copay for the employee and family.

Coverage tier

The category that sets an employee's premium and benefit level, such as employee-only, employee-plus-spouse, or family. Optiv Advantage coverage includes the employee's family.

Critical illness insurance

A supplemental policy that pays a fixed cash benefit on the diagnosis of a covered serious condition, such as cancer, heart attack, or stroke. It pays on the event, independent of medical bills.

D

Deductible

The amount a member pays out of pocket before certain coverage begins to pay. The Optiv Advantage virtual care suite carries no deductible for the employee and family.

Dependent

A spouse, child, or other qualifying family member covered under an employee's plan. Optiv Advantage coverage includes the employee's family.

Election

An employee's formal choice, made under a Section 125 plan, of which pre-tax benefits to take and how much to contribute. Elections are generally locked for the plan year unless a permitted change event occurs.

E

EAP (Employee Assistance Program)

A benefit that provides confidential mental-health, counseling, and life-support services to employees and their families. It is a common tool for addressing burnout, a documented driver of turnover.

ERISA

The Employee Retirement Income Security Act, the federal law setting fiduciary, documentation, and disclosure rules for employee benefit plans. Under Optiv Advantage, plan documents, the summary plan description, and required notices are prepared and maintained by the carrier program.

Excess benefit

The portion of a fixed indemnity payment that exceeds what the employee can document as an unreimbursed Section 213(d) medical expense. This portion is potentially taxable. Indemnity benefits are described as potentially taxable on the excess, never as free of tax.

Exclusion from income

A tax concept describing amounts that are lawfully left out of an employee's gross income, such as qualifying employer-provided health coverage under Section 106. An exclusion lowers taxable income.

Flex credits

Employer-provided dollars an employee can apply toward qualifying benefits within a Section 125 plan. They are a way for an employer to fund or sweeten the menu of pre-tax choices.

Form 5500

The annual report some welfare benefit plans must file with the federal government, depending on plan size and structure. Under Optiv Advantage it is filed as part of plan administration where applicable.

F

FICA (Federal Insurance Contributions Act)

The payroll tax that funds Social Security and Medicare. The employer and the employee each pay 7.65% of wages. Because Section 125 elections come out of pay before FICA is figured, both are taxed on a smaller wage base.

FICA recovery

The employer's savings under the plan. When a qualifying premium is taken out of pay before tax, the wage base is lower, so the employer deposits less FICA on the very next payroll run. It is not a rebate or a check that arrives later. The employer keeps the difference. Optiv Advantage recovers up to $957 per enrolled employee per year.

Fixed indemnity benefit

Insurance that pays a set cash amount when a covered health-related event occurs, such as a hospital stay or an emergency room visit. The amount is fixed by the policy and paid on the occurrence of the event, administered against standard medical coding. It differs from a reimbursement account, which returns funds only up to a substantiated expense.

FMLA (Family and Medical Leave Act)

The federal law that gives eligible employees unpaid, job-protected leave for certain family and medical reasons. It affects benefits continuation during leave.

FPL (Federal Poverty Line)

An income benchmark the government updates annually. It is used in one of the ACA affordability safe harbors and in subsidy calculations.

FSA (Flexible Spending Account)

An employer-sponsored account funded by pre-tax salary reductions that reimburses qualifying medical expenses up to a substantiated amount. It is generally use-or-lose, subject to any carryover or grace period the plan allows. It is a reimbursement account, not a fixed-benefit product.

FTE (Full-Time Equivalent)

A unit that converts part-time hours into the equivalent of full-time headcount, used to determine whether an employer crosses the 50-employee ALE threshold.

Fully insured

A structure in which a licensed carrier bears the risk of loss and pays claims, rather than the employer. Optiv Advantage is fully insured, so the employer never bears claims risk. Full insurance is one of the load-bearing features of the plan's compliance position.

Fully insured risk transfer

An arrangement in which the claims risk is borne entirely by an A-rated, state-licensed insurance carrier rather than the employer. Under Optiv Advantage the employer never bears claims risk; the full claims risk sits with the carrier. It is one of the load-bearing features of the plan's compliance position.

FUTA (Federal Unemployment Tax Act)

A federal payroll tax employers pay to fund unemployment benefits. It is relevant to the unsettled wage-treatment question described below.

G

Grace period

A short window after a plan year during which certain flexible spending account expenses can still be incurred, if the plan adopts one. It is one of the limited exceptions to use-it-or-lose-it.

Guaranteed issue

Coverage a member can obtain without medical underwriting or health questions. Many supplemental and worksite benefits are offered on a guaranteed-issue basis, which simplifies enrollment.

H

HDHP (High-Deductible Health Plan)

A health plan with a higher deductible that meets IRS minimums. Enrollment in an HDHP is the structural gate that allows HSA contributions.

Health Maintenance Benefit

The benefit within Optiv Advantage that pays an employee on named Section 213(d) medical events and delivers the measurable take-home increase employees see through the plan.

Healthy Incentive Program (HIP)

The engagement framework under which the Health Maintenance Benefit is paid when participants engage with qualifying activities and documented medical events. Rewards in the Member App accrue through it.

Highly Compensated Employee (HCE)

An employee who meets IRS compensation or ownership thresholds. Nondiscrimination testing checks that a plan does not unfairly favor this group.

Hospital indemnity

A fixed cash benefit paid per covered inpatient stay or day, regardless of the actual hospital bill. It is a common component of a fixed indemnity design.

HRA (Health Reimbursement Arrangement)

An employer-funded arrangement that reimburses employees for qualifying medical expenses or premiums up to an employer-set amount. The employer owns the funds until reimbursed.

HSA (Health Savings Account)

An employee-owned, portable account for qualifying medical expenses, available only alongside a qualifying high-deductible health plan. Contributions are pre-tax or deductible, balances carry forward, and the employee keeps the account across jobs.

I

ICHRA (Individual Coverage HRA)

An employer-funded arrangement that reimburses employees for individual-market health coverage rather than offering a group plan. It is one path to ACA-compliant major medical within Optiv CompleteCare.

Imputed income

The taxable value of a non-cash benefit that must be added to an employee's income for tax purposes. It is why the tax treatment of certain benefit payments matters.

Indemnity

Compensation paid on the occurrence of a defined event. In benefits, a fixed indemnity policy pays a set amount when a covered medical event happens, rather than reimbursing a specific bill.

Indemnity benefit restoration

The way the indemnity benefit returns value to the employee that offsets, and can exceed, the pre-tax salary reduction, so participation raises take-home pay rather than shifting cost to the employee. It is why the structure is described as self-funding from the employee's point of view.

IRS Publication 15-B

The Employer's Tax Guide to Fringe Benefits, which governs W-2 reporting and the payroll-tax treatment of these benefits. It is part of the guidance framework the plan's administration follows.

K

Key employee

An owner or officer meeting IRS thresholds. Section 125 plans run a concentration test to confirm key employees do not receive more than a set share of the plan's pre-tax benefits.

M

Major medical

Comprehensive health insurance that covers a broad range of services, hospitalization, and physician care. Optiv Advantage sits alongside major medical; it does not replace it.

MEC (Minimum Essential Coverage)

The baseline level of coverage that satisfies certain ACA requirements. It is one option within the Optiv CompleteCare design.

Medicare

The federal health program for people 65 and older and certain others, funded in part by the Medicare portion of FICA.

Member App

The single application through which a member and their family reach care, prescriptions, records, rewards, and Section 213(d) expense tracking. It is the digital front door to the Optiv Advantage care suite, spanning virtual visits, prescriptions, the member ID card, consult records, and the rewards that feed the Healthy Incentive Program.

Message a Specialist

A service that lets a member send a question to a relevant specialist and receive a written answer within a set response window, without scheduling a live visit. It is part of the Member App care suite across a defined set of specialist types.

Minimum value

An ACA standard a plan meets when it covers at least 60% of expected costs and provides substantial coverage of hospital and physician services. It affects employer-mandate compliance.

Named fiduciary

The person or entity with authority and responsibility over a benefit plan, accountable under ERISA to act in participants' interest. It is an ERISA governance element addressed in the plan structure.

N

Net pay

The amount an employee actually takes home after taxes and deductions. Lowering the taxable wage base through pre-tax elections raises net pay without a raise.

Nondiscrimination testing

An annual set of tests confirming that a Section 125 plan does not favor highly compensated or key employees. The main checks are an eligibility test (who can participate), a benefits-and-contributions test (whether the benefits are available on comparable terms), and a key-employee concentration test (the share of pre-tax benefits going to key employees). Passing them is a standard compliance requirement of these plans.

Open enrollment window

The annual period when employees make or change Section 125 elections for the coming plan year. Outside it, changes generally require a permitted election change event.

O

Open enrollment

The set period during which employees may elect or change benefits for the coming plan year. Outside this window, changes generally require a qualifying life event.

Out-of-pocket

Costs a member pays directly, such as copays, deductibles, and coinsurance. The Optiv Advantage virtual care suite carries none for the employee and family.

P

Payroll tax

Taxes calculated on wages, including the employer and employee shares of FICA and federal unemployment tax. Pre-tax elections lower the wage base these taxes are figured on.

PEPM / PEPY (Per Employee Per Month / Per Year)

Common units for expressing a benefit cost or saving on a per-employee basis, used when modeling plan economics across a workforce.

Plan document

The written document that establishes a Section 125 plan, defines its benefits and rules, and is required for the plan to be valid. Under Optiv Advantage it is prepared and maintained by the carrier program, along with the adoption agreement the employer signs to put the plan in place.

Plan sponsor

The employer or entity that establishes and maintains the benefit plan. A core compliance principle is that the employer acts as plan sponsor and never as claim payer. Under Optiv Advantage the employer is the plan sponsor, the carrier bears the claims risk, and the administration is supported, which keeps the separation of functions clean.

POP (Premium Only Plan)

The narrowest Section 125 election. It lets an employee pay the employee share of a health insurance premium with pre-tax dollars. It holds no balance and pays no benefit; it only reduces the tax on a premium the employee already pays.

Portability

The ability of a member to keep a benefit or account when they change jobs. HSAs are portable; many supplemental policies offer portability so coverage continues after employment ends.

Pre-tax election

An employee's choice to have a qualifying premium taken out of pay before taxes are calculated, which lowers taxable income and the wage base. It is the mechanism at the center of a Section 125 plan.

Premium

The amount paid for insurance coverage. Under a Section 125 election, a qualifying premium can be paid pre-tax.

Preventive care

Routine services such as checkups and screenings intended to catch problems early. The Optiv care suite covers preventive virtual visits with no copay.

Q

QSEHRA (Qualified Small Employer HRA)

An HRA available to small employers without a group health plan, which reimburses employees for individual coverage and medical costs up to annual limits.

Qualifying life event

A change such as marriage, birth, or loss of other coverage that lets an employee change benefit elections outside open enrollment.

R

Run-out period

A window after the plan year ends during which participants can still submit claims for expenses incurred during the year. It applies to reimbursement accounts, not to fixed indemnity benefits.

S

Salary reduction agreement

The employee's written authorization to have a portion of pay redirected, pre-tax, to fund a Section 125 benefit. It is the paperwork that makes the pre-tax election real, and the amount redirected is what lowers the taxable wage base.

Section 105(b)

The Internal Revenue Code section governing the income-tax treatment of benefits paid for medical care. It determines when a benefit payment is excluded from income and to what extent. Treatment varies by circumstance.

Section 106

The Code section that excludes employer-provided accident and health coverage from an employee's income. It is the funding link that lets the premium for the coverage be paid pre-tax.

Section 125

The Code section, enacted in 1978, that lets employees pay for qualifying benefits with pre-tax dollars. It is the funding pathway that lowers the wage base, not a benefit in itself and not the plan itself.

Section 213(d)

The Code section defining what counts as a medical expense. Its broad definition of medical care is what a covered event must map to in order to trigger an indemnity payment. It also covers related costs such as transportation to receive care.

Section 4980H

The Code section that sets the ACA employer-mandate penalties. It has two parts: a penalty when an Applicable Large Employer fails to offer coverage to enough full-time employees, and a smaller penalty when the coverage offered is not affordable or does not meet minimum value. It applies at and above the 50-employee threshold.

Self-funded

A structure in which the employer, rather than a carrier, bears the financial risk for claims. It is the opposite of fully insured. Optiv Advantage is fully insured, not self-funded.

Separation of functions

The structural principle that the employer as plan sponsor, the carrier as claims-risk bearer and payer, and the administrator handling claims and substantiation each hold distinct roles, so the employer never pays claims. It is one of the structural features behind the plan's defensibility.

Social Security wage base

The annual wage ceiling on which Social Security tax is charged. Reducing the taxable wage base through pre-tax elections can slightly reduce the earnings counted toward an employee's future Social Security benefit, which matters more for lower earners than for those above the wage base.

SPD (Summary Plan Description)

The plain-language document that explains a benefit plan's terms to participants, required under ERISA. Under Optiv Advantage it is prepared and maintained by the carrier program.

Stop-loss insurance

Coverage a self-funded employer buys to cap its exposure to unusually large claims. It is not part of a fully insured design like Optiv Advantage.

Substantiation

The documentation that ties a benefit payment to a real, qualifying medical event. Favorable tax treatment depends on it, which is why the plan is administered against medical coding rather than paying cash on a self-reported event.

Summary of benefits

A short, plain-language overview of what a plan covers and what it pays. For a fixed indemnity benefit, it lays out the benefit schedule so a member can see the cash amount tied to each covered event.

Summary of Benefits and Coverage (SBC)

A federally prescribed, standardized summary of a health plan's benefits and cost-sharing, provided to employees generally before each plan year's open enrollment. It is confirmed and updated as part of preparing a configuration for each plan year.

Supplemental benefits

Coverages that pay in addition to major medical, such as fixed indemnity, accident, and critical illness. They fill gaps and add cash benefits rather than replacing primary coverage. Optiv Advantage is built on a Section 125, Section 105(b), and Section 213(d) foundation.

SUTA (State Unemployment Tax Act)

The state counterpart to federal unemployment tax, paid by employers to fund state unemployment benefits.

T

Take-home increase

The added pay an employee keeps because a qualifying premium is taken out before tax, lowering the wage base they are taxed on. It varies by pay and election, from as little as $5 a week to over $100 a month.

Taxable wage base

The portion of wages on which a given payroll tax is charged. Pre-tax elections lower this base, which is what produces both the employee take-home increase and the employer FICA recovery.

Telehealth

Care delivered remotely by phone or video. Optiv Advantage includes Virtual Urgent Care and Virtual Primary Care with no copay and no deductible for the employee and family.

Third-party administrator (TPA)

The licensed entity that administers the plan, adjudicates and pays claims, and runs the per-payroll calculation. The employer does not process claims. Under Optiv Advantage, whoever runs payroll drops the payroll report into a calculation engine each cycle, which returns an updated payroll with benefits already calculated in about five minutes.

Tri-Agency

The three federal agencies that jointly administer the ACA and related health-coverage rules: the Internal Revenue Service, the Department of Labor, and the Department of Health and Human Services. The compliant structure is designed to align with their guidance across plan design, administration, and carrier structure.

U

Underwriting

The carrier's process of evaluating and pricing the risk it insures. In a fully insured plan, the carrier underwrites and bears that risk, not the employer.

Use-it-or-lose-it

The rule that unused funds in certain Section 125 reimbursement accounts, such as a health FSA, are generally forfeited at the end of the plan year, subject to any carryover or grace period. Fixed indemnity benefits do not work this way; they pay cash on a covered event and hold no balance to forfeit.

V

Virtual Primary Care

A dedicated primary care physician for ongoing care, checkups, and refills, provided with no copay and no deductible for the employee and family.

Virtual Urgent Care

Around-the-clock access to a board-certified physician, usually in under 15 minutes, provided with no copay and no deductible for the employee and family.

Voluntary benefits

Coverages an employee can choose to enroll in and typically pay for, often through payroll deduction. Fixed indemnity and other supplemental products are frequently offered this way.

W

Optiv Access

Employer-funded entry-level virtual care that extends coverage to every employee, including part-time, contingent, and gig staff, with eligibility criteria the employer sets. Optiv Access is always paired with Optiv Advantage rather than sold on its own, and its cost nets against the employer's payroll-tax recovery rather than adding an expense.

Optiv Advantage

The core Optiv plan. A Section 125 supplemental design built on the Section 125, Section 105(b), and Section 213(d) framework that sits alongside an employer's major medical plan. Employees receive a virtual care suite, fixed cash benefits on covered medical events, and a measurable increase in take-home pay through their Health Maintenance Benefit. The employer funds it by recovering payroll tax it was already overpaying.

Optiv CompleteCare

Optiv Advantage with ACA-compliant major medical layered on top, relevant for employers at or approaching the 50-employee Applicable Large Employer threshold. Designed to slow the climb of employer health costs.

Optiv PremierCare

The most complete Optiv design. Adds dental and vision to Optiv CompleteCare for employers competing for talent at the top of their market.

W-2 reporting

The annual wage and tax statement an employer files for each employee. Certain benefit and coverage amounts must be reported on it.

Wage-treatment question

An unsettled tax question about whether the includable excess on an indemnity payment is also treated as FICA and FUTA wages. The fuller analysis is addressed in a gated white paper. On public surfaces, the honest short version is that the excess is potentially taxable and the wage-treatment question is genuinely unsettled.

Waiting period

The time a newly eligible employee must wait before benefits begin, set by the employer within legal limits.

Work Shield

A bundled workplace-misconduct reporting and resolution service included with the plan, which resolves issues about 80% faster than the national average.

Worksite benefits

Another name for voluntary supplemental coverages offered through the workplace and typically paid by employees via payroll deduction. Fixed indemnity, accident, and critical illness are common worksite benefits.