In General there are:
Tiers of Payment
Levels for expenses)
- Tier One
tax-exempt account from which to pay health care expenses. It is a
discretionary account that provides flexibility concerning which providers can be seen and what types of
services are covered.
of payment is personal employee payment for health care expenses after money in the
personal health care account
is used up, and before the deductible for the high-deductible insurance is
reached. Since this is a "gap" in coverage compared to traditional
health insurance; this tier is sometimes called a "hole"
or "coverage gap." It is basically the planned
"deductible" during which the employee pays his/her bills.
- Tier Three
pays allowable health care expenses for the year that go above the "deductible"
of the underlying insurance policy. However HSAs or HRAs are
one form of plan that need not have such a policy. It can be offered
without an insurance plan. There need be no insurance involved, just money
in the account from which an employee pays expenses until it is
exhausted. When insurance is in place it generally
pays a high percentage (or all) of health care expenses over the
deductible. However, sometimes this insurance has restrictions
similar to those in managed care plans.
Contributions to the Account
The amount contributed to the account by an employer may be:
- The amount of money that would
otherwise have spent on the premium for insurance.
- An Employer determined amount
- A part of, or a percentage of, any money the
employer saves because of the lower premiums of a
Consumer Directed Health Plan, when compared to the premium for the prior insurance plan.
to drive "Consumer" decisions?
- Track and manage
their health care bills.
- Manage and improve their health with useful
information and preventative services.
- Get information about provider
quality and get group-rate prices from providers.
Electronic Medical Records are the wave of the future.
This is going to allow internet-based
support for consumer decision making information and guidelines with respect to health care coverage
and health care costs to increase annually. This, will enable the employee
to make wiser health care and cost effective decisions to help hold
down future costs..