safe harbor

A provision of a statute or a regulation that reduces or eliminates a party’s liability under the law on the condition that the actions were performed in good faith or in compliance with defined standards. For example, safe harbor regulations help employers determine affordability of health coverage for their employees under provisions of the Affordable Care Act (ACA).

safety net providers

Health care providers who deliver health care services to patients regardless of their ability to pay. These providers may consist of public hospitals, community health centers, local health departments, and other providers who serve a disproportionate share of uninsured and low-income patients.

Section 125 Plan

A plan that provides participants an opportunity to receive certain benefits, such as reimbursement for some out-of-pocket medical expenses, on a pretax basis. It is a separate written plan, maintained by an employer for employees that meets the specific requirements of Section 125 of the Internal Revenue Code. Also known as flexible benefits plans.

self-insurance

Large and medium-size companies often assume all or most financial risks of providing health insurance to their workers, as opposed to purchasing insurance coverage from commercial carriers (and having the carrier assume all risk). Claims processing is often handled through an administrative services contract with an independent organization, often an insurance company.

sequestration

Cuts to the federal budget that began on March 1, 2013 as an austerity fiscal policy. Enacted by the Budget Control Act of 2011, the cuts were initially set to begin on January 1, but were postponed by two months by the American Taxpayer Relief Act of 2012. The spending reductions were approximately $85.4 billion during fiscal year 2013, with similar cuts for years 2014 through 2021. Medicaid was exempt, and cuts to Medicare were limited to 2 percent.

single payer system

A health care system, either at the national or state level, that would designate one entity (usually the government) to function as the central purchaser of health care services. Canadian provinces operate health insurance coverage for residents under this system.

skilled nursing facility (SNF)

An institution that offers skilled services similar to those given in a hospital, such as intravenous injections and physical therapy given by professional staff, to aid rehabilitation following hospitalization of patients who have been discharged. SNFs differ from nursing homes or nursing facilities, which are intended primarily to support elderly and disabled individuals in the tasks of daily living (custodial care). Medicare does not cover custodial care in nursing homes; however, Medicare does cover skilled nursing care, rehabilitation and associated custodial care in SNFs for a limited period of time. Medicaid covers care in all Medicaid-certified nursing facilities.

small group market

The private insurance market, regulated by state government, where firms with two to 50 employees purchase health insurance for their employees.

Social Security Disability Insurance (SSDI)

Financed with Social Security taxes, SSDI provides cash assistance to people who are permanently disabled and unable to work, and who previously worked and paid Social Security payroll taxes. Although the number of work credits required to qualify for SSDI depends on the age of disability onset, an individual must typically have 40 credits, of which 20 must be from the last 10 years (four work credits can be earned per year). The size of the monthly benefit depends on the beneficiary’s earnings record. Widows, widowers and adults who are blind or disabled since childhood are also eligible for SSDI.

socialized medicine

A system of health care in which all health personnel and health facilities, including doctors and hospitals, work for the government and draw salaries from the government. Doctors in the U.S. Veterans Administration and the Armed Services are paid this way. Veterans and U.S. military hospitals are also supported this way. Examples also exist in Great Britain and Spain.

specialty drug

High-cost drugs used to treat complex or rare conditions such as multiple sclerosis. These drugs typically require special handling, administration, or monitoring.

spend-down

Can apply to reducing assets or income in the process of qualifying for Medicaid. The amount that each individual must”spend down”is determined at the time eligibility is determined. (Also see medically needy.)

Stark Law

Prohibits physicians from making referrals for certain designated health services payable by Medicare to an entity in which the physician has a financial interest. It originally applied to clinical laboratory service only. Congress expanded the law in 1995 to include other services and Medicaid.

State Balancing Incentives Payment Program

Running from October 2011 through September 2015, this program provided Medicaid matching incentives to increase home- and community-based services (HCBS). Participating states were required to make structural reforms to reduce institutional care as appropriate and increase the use of HCBS.

state mandate

State coverage laws requiring private insurers to cover specific services (such as well-baby care) or reimbursement for specific providers (such as psychologists). The Employee Retirement Income Security Act generally exempts self-insured companies from these requirements.

State Pharmacy Assistance Program (SPAP)

State-funded program providing pharmacy benefits to seniors and other low-income groups. Before the enactment of Medicare Part D, 22 states funded SPAPs while six states operated waiver programs funded jointly by state and federal governments through Medicaid (see Medicaid Waiver). With Part D in operation, most states have begun providing wrap-around benefits to coordinate and ease the enrollment of their Medicare beneficiaries by, for example, covering deductibles, co-insurance or the gap in Medicare Part D coverage.

substance abuse

A maladaptive pattern of using certain drugs, alcohol, medications, and toxins that leads to clinically significant impairment or distress.

substance dependence

When a person continually uses a particular substance, resulting in compulsive substance-taking behavior, tolerance for the substance, and withdrawal symptoms if the person stops using the substance.

supplemental medical insurance

Any private health insurance plan held by a Medicare beneficiary that is purchased to fill in “gaps” in traditional Medicare coverage, or to finance cost-sharing requirements, e.g., Medicare’s hospital deductible. Among the most common types of supplemental insurance are some employer-sponsored retiree coverage and Medigap insurance.