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Consumer-Directed Health Plans Consumer-directed health plans, also known as consumer-driven health plans, are designed to increase consumer involvement in health care choices. These plans often include a combination of high-deductible health plans and health reimbursement, health savings or flexible spending accounts. Financial incentives are part of the package and are designed to help employees make cost-conscious choices about their health care. Consumer-Directed Health Plans Give Employees More Control Under consumer-directed health plans, employees have more responsibility for and control over their health care costs. This is a two-part involvement. The first is a financial contribution deducted from their paychecks each month on a pre-tax basis. This tax-free deduction is deposited into an account and can then be used to pay for qualified expenses not covered under an employer-sponsored health care plan. Both employers and employees enjoy tax benefits under such plans, and employees can use the money to pay for items they would have purchased anyway. Such costs include doctor co-pays, over the counter medications and first aid items. The second way in which employees have more control under consumer-directed health plans is the way in which benefits are selected. Consumer-directed health plans, as with all cafeteria plans, allow participants to choose which benefits programs they wish to participate in. This includes health care, dental care, dependent care, adoption accounts, and commuter benefits. By electing which programs to participate in, employees can use their health care dollars more wisely and benefit from specific services they find most valuable. Consumer-driven health plans from take care are most beneficial when employees are given educational tools to assist them in making informed decisions. Before enrolling in any health care plan, it is important for each participant to calculate the costs and savings they can receive, as well as which benefits would best fit their lifestyles and needs. |
Additional Topics Consumer-Driven Health Accounts Dependent Care Flexible Spending Accounts Flexible Health Spending Accounts Flexible Medical Expense Accounts Health Care Flexible Spending Accounts Health Reimbursement Arrangements IRS Section 125 Cafeteria Plans Medical Expenses and Income Tax Plan for Medical that Health Insurance Doesn't Cover Save 25% to 40% on Health Expenses Save on Co-Pays and Over-the-Counter Medications Save on LASIK and Orthodontic Costs Section 125 Plan Administration |
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