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Defined Contribution Health Plans
National Summary
One form of health plan design that has become very popular is consumer-driven health care, including defined-contribution health plans intended to make employees more conscious of, and responsible for, the cost of their health care.
Typically, defined-contribution plans combine a high-deductible plan with a tax-exempt medical expense savings account that could cover the deductible, copayments, or the cost of out-of-network care.
Health savings accounts (HSAs) and health reimbursement arrangements (HRAs) are the most common types of tax-favored consumer-directed plans. HSAs must be combined with a high-deductible health plan (HDHP), and HRAs frequently are as well.
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