CDHP Chart

Consumer Driven Health Plan

Consumer-Driven Health Plans

A recent trend in employee benefit planning is the development of Consumer-Driven Health Plans. This is a term used to describe a change in employer-provided plans where the employee is asked to assume greater responsibility for first dollar health expenses and the employer provides access to funds to help the employee meet these expenses. All of these plans provide tax-free reimbursement of covered expenses. There are several different approaches that can be used:

	Flexible Spending Accounts	Medical Reimbursement Plans	Health Reimbursement Accounts	Health Savings Accounts
Funded By	Employee	Employer	Employer	Both
Owned By	Employee	Employer	Employer	Employee
Benefit Amount	Determined by employee contributions	Determined by employer – annual limit	Determined by employer – monthly deposit	Determined by employer and employee contributions limited to deductible amount
Expenses Reimbursed	All IRS defined medical expenses	Determined by employer – ie. limited to deductible expenses	Determined by employer – ie. limited to deductible expenses	All IRS defined medical expenses
Use it or Lose it by end of the year	Yes	Yes	No, unused amounts carry over to next year	No, unused amounts carry over to next year
Used in conjunction with other savings accounts	Yes	Yes	Yes	No
Must be paired with a high deductible plan	No	No	No	Yes
Used to fund medical expenses after termination	No	No	Yes, helpful for COBRA	Yes, can be used during retirement

Did you know?

Americans’ average annual out-of-pocket expenses for health care rose 26% between 1995 and 2001, to $2,182.