Consumer-Driven Health Insurance Plans
Consumer-driven healthcare plan (CDHP) pretend to offer employees the incentives to allocate their medical dollars intelligently but at the same time is varied and complex in nature.
CDHPs involves’ the medical flexible spending account (FSA), which protects employer and employee contributions for healthcare expenses from taxes. But the FSAs come with use-it-or-lose-it provision; that forfeits the amount that is not spent.
The Health Savings Accounts Scheme
A new paradigm in consumer-driven healthcare -- the Health Savings Account (HSA) – was introduced in 2004. HSAs offer a route to comparatively affordable premiums and tax advantages against high deductibles; the law requires that HSAs be established in combination with a policy carrying an annual deductible of $1,100 for individuals or $2,200 for families.
By the means of HSAs you can accumulate tax-advantaged money then to be used for paying healthcare expenses like uncovered doctor visits, co-pays, premiums, etc. They are different from health insurance but need to be used in concurrence with them.
Notably, the HSA are portable to a new employer and its contributions can be passed over to the next year unlike FSAs, whereas they can assist in filling any Medicare coverage gaps arising in retirement.
However, critics also opine that HSAs help just a select group of employees that are young, healthy and financially capable to risk a thorn in costs on account of unanticipated medical expenses. According to critics HSAs cost employees more money as they are of cost-shifting nature.
