E

“E”

EA
See enrolled actuary.
EAP
See employee assistance plan.
Early retirement
Termination of employment (retirement) by a plan participant at some date prior to the age set by the plan for normal retirement. Early retirement involves the payment of pension benefits that generally are actuarially reduced.
Early retirement age
A specific age before the normal retirement age (typically, age 65) set by the plan at which participants may elect to retire and receive pension benefits under the plan.
Early retirement program
Corporate incentive program designed to stimulate employee attrition. Most plans offer qualifying employees (1) voluntary choice, (2) waived early retirement penalties, (3) subsidies for choosing early retirement, and (4) a specific period for acceptance or participation.
Earmarking
Participants’ directing of the funds in their account in a defined contribution plan.
Earned premium
That portion of an insurance policy’s premium payment for which the protection of the policy has already been given. For example, an insurance company is considered to have earned 75 percent of an annual premium after a period of nine months of an annual term has elapsed.
Earned time off
An incentive award paid as additional paid time off.
Earnings rate
The average long-term rate of return expected to be earned on pension fund assets.
Earnings test
Part of the determination whether a social security claimant is eligible for benefits. Whether a claimant under age 70 receives social security benefits and how much the claimant receives depends on how much the claimant earns from employment.
EBP
See excess benefit plan.
Elder care
Caring for older family members who cannot care for themselves without help. Many employees have elder care and/or child care responsibilities in addition to their paid jobs.
Eligibility date
The date on which employee becomes eligible to elect coverage under a plan.
Eligibility period
A specified length of time, frequently thirty-one days, following the eligibility date during which an individual member of a particular group (e.g., an employee) remains eligible to apply for life or health insurance under a group policy without evidence of insurability.
Elimination period
A period between the onset of disability and the start of disability income insurance benefits during which no benefits are payable.
Employee assistance plan (EAP)
Originally an effort to help current employees with alcohol problems, the EAP concept has been expanded to include programs to help employees handle personal and psychological problems, family problems, drug addiction, financial planning problems, and so forth, particularly when these problems affect the employee’s ability to function well on the job. Many EAPs also assist employees’ dependents.
Employee contributions
Payments made by an employee toward the cost of benefits coverage or paid by an employee into a deferred compensation plan.
Employee pension benefit plan
Generally, either a defined benefit plan or a defined contribution plan that provides a pension benefit upon retirement.
Employee Retirement Income Security Act of 1974
(ERISA) A federal law regulating private employers’ pension and welfare benefit programs, with provisions that cover eligibility, reporting requirements, fiduciary standards for the management of funds, and tax incentives for funding pension plans and that establish the Pension Benefit Guaranty Corporation to insure pension plans against financial failure.
Employee services and allowances
A class of employee benefits that includes relocation allowances, product and service discounts, subsidized food services, and social and recreational programs.
Employee stock ownership plan (ESOP)
A plan allowing employees to acquire shares of their employer’s stock, with certain tax advantages for the employer; a defined contribution pension plan that is either a stock bonus plan or a combination stock bonus and money-purchase plan designed to be invested primarily in the stock of the employer company.
Employee welfare benefit plan
A plan that provides benefits other than pension payments, such as medical, life, or disability insurance to plan participants. These benefits may be paid on a pay-as-you-go basis, or they may be funded through the purchase of insurance.
Employer securities
Stock, bonds, or other securities issued by an employer. Special rules apply to plan investments in such securities.
Endowment
Life insurance payable to the policyholder, if living, on the maturity date stated in the policy or to a beneficiary if the insured individual dies prior to that date.
Enrolled actuary (EA)
An actuary who is listed with the Internal Revenue Service’s joint Board for the Enrollment of Actuaries as qualified to perform certain actuarial services for employee benefits plans.
Entry-age normal cost method
A projected benefits cost method under which the pension cost is computed for each plan participant by use of the assumption that those participants who were employed before the plan was adopted had entered the plan at the earliest date on which they would have been eligible had the plan been in existence. Therefore, an initial supplemental liability or past-service cost results between the credited entry age and the date the plan was adopted.
EOB
See explanation of benefits.
EPO
See exclusive provider organization.
Equalization Programs
Policy offered by employers to employees assigned overseas (Expatriates), designed to protect an employee’s income tax liability to assure that it is the same as if he/she had been employed in the states and to neutralize the income tax concerns of an employee in deciding whether to accept a move overseas and promote compliance with the local tax laws.
Equity
An investment that gives the investor a share in ownership: for example, investment in stocks or real estate holdings, as distinguished from an interest-bearing investment.
Equity annuity
An annuity that varies on the basis of the value of the underlying equity.
ERISA
See Employee Retirement Income Security Act of 1974.
ESOP
See employee stock ownership plan.
Evidence of insurability
Any statement of proof of a person’s physical condition and/or other factual information affecting that person’s acceptance for insurance. Evidence of insurability is usually waived for individuals covered by group policies or converting from group coverage.
Excess benefit plan (EBP)
A nonqualified plan that provides benefits for highly compensated employees that exceed the maximum benefits allowed for qualified plans under the Internal Revenue Code.
Excess contribution
A contribution over the maximum deductible amount that cannot be deducted until it is applied against the applicable maximum in a later year.
Excluded plans
Benefits plans that under statute are excluded from ERISA’s requirements, including government plans, certain plans of religious organizations, and unfunded excess benefits plans.
Excludable
Certain types of benefits are excludable from taxable income, meaning they need not be reported for tax purposes and are not subject to income tax.
Exclusion ratio
A ratio used to determine the proportion of annuity payments that is taxable, the exclusion ratio measures the ratio of an employee’s cost basis in a plan to the employee’s expected return.
Exclusive benefit rule
A standard of ERISA under which each fiduciary must act solely in the interest of plan participants and beneficiaries. Accordingly, plan assets are to be used for the exclusive purposes of providing benefits to participants and beneficiaries and paying administrative expenses.
Exclusive provider organization (EPO)
An association of health care providers that provides care to enrollees through affiliated providers only, with no reimbursement available for services rendered by unaffiliated providers.
Expatriates
Employees who are assigned outside their base country for more than one year.
Expatriate allowance
Any payment made in addition to base salary to maintain an expatriate at a standard of living that approximates the standard the individual would have in the home country.
Expedited Review
This is a process for quickly settling a grievance regarding an emergency situation.
Experience
A term used to describe the relationship, usually expressed as a percentage or ratio of premium to claims for a plan, coverage, or benefits for a stated period.
Experience rating
Billing an employer for insurance costs on the basis of the size and number of claims by the employer’s own employees in past years. This type of billing contrasts with community-rated billing, which takes into account the experience of some larger group.
Experience refund
A provision in most group policies for the return of premium to the policyholder because of lower-than-anticipated claims.
Explanation of benefits (EOB)
The description of benefits and services that is sent to a patient who has requested payment from a health benefits plan.
Extended term insurance
A form of insurance available as a nonforfeiture option and providing the original amount of insurance for a limited period. 

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