Alphabet Soup, Anyone? Employee Benefits and HR Acronyms

Question: We've noticed that many people in the employee benefits and human resources (HR) fields use various acronyms that can cause a bit of befuddlement here around the office. What are some of the most common employee benefit and HR acronyms and what do they stand for?

Answer: You're so right! Employee benefits professionals, HR personnel, attorneys and others serve up a lot of alphabet soup when discussing various topics. Here are some of the most commonly used acronyms, what they stand for and a brief description of each:

ALE – Applicable large employer. For purposes of the Affordable Care Act, an ALE has at least 50 full-time employees, including full-time equivalent employees, on average during the previous year.

CMS – Centers for Medicare & Medicaid Services. This federal agency provides health coverage to more than 100 million people through Medicare, Medicaid, the Children's Health Insurance Program and the Health Insurance Marketplace.

COB - Coordination of benefits. This is a way to figure out who pays first when two or more health insurance plans are responsible for paying the same medical claim.

COLA – Cost-of-living adjustment. This is an increase in pay or benefits that's generally based on inflation.

DCAP – Dependent Care Assistance Program. Similar to a program offering dependent care Flexible Spending Accounts, a DCAP allows participants to set aside pretax money from their paychecks to help pay for qualifying childcare or eldercare expenses.

DOL – The U.S. Department of Labor. This federal agency is responsible for administering federal laws governing occupational safety and health, wage and hour standards, unemployment benefits and more.

EAP – Employee assistance program.  This employer-offered program helps employees with personal problems that affect their job performance connect with qualified providers of assistance. The problems in question typically include physical and mental health issues, financial troubles, and substance use disorders.

EBSA – The Employee Benefits Security Administration. This is an agency of the U.S. Department of Labor. It administers, regulates and enforces regulations related to employer-sponsored retirement benefit and health benefit plans.

EEOC – The U.S. Equal Employment Opportunity Commission. This federal agency enforces federal laws that make it illegal to discriminate against a job applicant or an employee because of the person's race, color, religion, sex (including pregnancy and related conditions, gender identity and sexual orientation), national origin, age (40 or older), disability and genetic information.

EIN – Employer Identification Number. The IRS assigns this nine-digit number to identify the tax accounts of employers and certain others who have no employees.

EOB – Explanation of benefits. This is a statement from a health insurer describing the costs it will cover for medical care that a participant has received.

EOI - Evidence of insurability. This is a process in which an insurer determines whether participants are in good enough health to be eligible for certain benefits, including optional life insurance.

ESOP – Employee stock ownership plan. This is a type of defined contribution retirement plan that's invests primarily in the stock of the employer that sponsors the plan.

FSA – Flexible Spending Account. This is a tax-advantaged account to which employees contribute funds that they can use to pay for certain out-of-pocket health care or dependent care costs.

HDHP – High-deductible health plan. This is a health insurance plan with a higher deductible than that of traditional plans. It's typically implemented so that an employer can offer participants Health Savings Accounts, which allow them to pay for certain medical expenses with tax-free money.

HHS – The U.S. Department of Health and Human Services. This is a federal agency whose mission is to protect the health of Americans and provide essential human services.

HMO – Health Maintenance Organization. This is a type of health insurance plan that generally limits coverage to care from doctors who work for or contract with the HMO.

HRA – Health Reimbursement Arrangement. This is an employer-funded group health plan from which employees are reimbursed tax-free for qualified medical expenses up to a fixed dollar amount per year.

HSA – Health Savings Account. This account is provided in conjunction with an HDHP (see above) to allow an employee to set aside money on a pretax basis to pay for qualified medical expenses.

PHI and ePHI - Protected health information and electronic protected health information. This type of information has federal protections when held by covered entities. Patients have certain rights with respect to PHI and ePHI as well.

PPO – Preferred Provider Organization. This is a type of health insurance plan that contracts with medical providers, such as hospitals and doctors, to create a network of participating providers.

SPD – Summary plan description. This is a document provided to a benefits plan participants by the plan administrator. It typically includes a description of features of the plan – including when employees begin to participate, how service and benefits are calculated, when benefits become vested, when payment is received, and how to file a claim for benefits.

TPA - Third-party administrator. This is a company that provides administrative services for self-insured health plans.

UCR rate – Usual, customary and reasonable rate. This is the amount paid by an insurer for a medical service in a geographic area based on what providers in the area usually charge for the same or similar medical service.

What About Acronyms for Laws?

Here's a list of common acronyms used for laws and legal requirements pertaining to employee benefits and human resources:

ACA – The Affordable Care Act. This law provides many rights and protections that make health care coverage fair, affordable and available to as many Americans as possible. It also includes an employer mandate to applicable large employers to offer health coverage that fulfills certain requirements.

ADA – The Americans with Disabilities Act. This law protects people with disabilities from discrimination in many areas of public life, including employment.

ADEA – The Age Discrimination in Employment Act. This law protects people who are 40 and older from discrimination because of age.

COBRA – The Consolidated Omnibus Budget Reconciliation Act. This law gives workers and their families who lose their health benefits (generally because they leave or are let go from their jobs) the right to choose to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances.

ERISA – The Employee Retirement Income Security Act. This law sets minimum standards for most voluntarily established private retirement and health plans to provide protection for individuals.

FICA – The Federal Insurance Contributions Act. This is the law that mandates the withholding of payroll taxes to fund the Social Security and Medicare programs.

FLSA – The Fair Labor Standards Act. This law establishes minimum wage, overtime pay, record keeping and youth employment standards for employees.

FMLA – The Family and Medical Leave Act. This law requires certain employers to grant up to 12 weeks of leave during a 12-month period to eligible employees who need time off because of a "serious health condition" that they or someone in their family is experiencing.

FUTA – The Federal Unemployment Tax Act. This law, along with state unemployment systems, provides for payment of unemployment compensation to workers who have lost their jobs.

GINA – The Genetic Information Nondiscrimination Act. This law prohibits discrimination on the basis of genetic information with respect to health insurance and employment.

HIPAA – The Health Insurance Portability and Accountability Act. This is the federal law requiring national standards to safeguard protected health information and electronic protected health information from being disclosed without a patient's consent or knowledge.

HITECH – The Health Information Technology for Economic and Clinical Health Act.  Signed into law in 2009, this law was designed to promote the adoption and meaningful use of health information technology.

MHPAEA – The Mental Health Parity and Addiction Equity Act. This law generally prevents group health plans and health insurers that provide mental health or substance use disorder benefits from imposing less favorable benefit limitations on those benefits than on medical/surgical benefits.

NMHPA – The Newborns' and Mothers' Health Protection Act. This law regulates the length of time a mother and newborn child are covered by insurance for a hospital stay in connection with childbirth.

PDA – The Pregnancy Discrimination Act. This law prohibits employment discrimination on the basis of pregnancy, childbirth or related medical conditions.

QMCSO – Qualified Medical Child Support Order. This legal directive, generally issued by a court or state administrative agency, formally instructs health insurers to enroll the children of divorced spouses in their plans.

QDRO – Qualified Domestic Relations Order. This legal document formally instructs an employer-provided retirement plan to pay child support, alimony or marital property rights to a spouse, former spouse, child or other dependent of a participant.

USERRA – The Uniformed Services Employment and Reemployment Rights Act. This law protects the job rights of individuals who voluntarily or involuntarily leave their jobs to undertake military service and certain other types of service.