Consumer Driven Health Plans have become popular as a way to contain health care costs.
But what are consumer driven health plans and how do they work for you?
While a consumer driven health plan can substantially lower health costs to an employer, they can also result in substantial savings — and other benefits — to employees.
The plans center on health savings accounts (HSAs) and health reimbursement accounts (HRAs), and pay for up front health care costs not generally covered by regular health insurance plans.
They are typically (but not always) used in conjunction with high deductible health insurance plans that protect the beneficiary only from very large medical expenses.
The difference is then covered through either the HSA or HRA account. This enables the employee to pay lower health insurance premiums but to budget for the higher out of pocket costs through regular contributions to HAS/HRA accounts by either the employee or employer.
The combination is named “consumer driven health care” because up-front health care costs are paid using a consumer-controlled account versus a single payer, giving the beneficiary greater control over his own health coverage. Continue Reading