Most Employers are familiar with plans that are Defined Benefit Plans. Benefits are clearly defined as are limitations to avoid over utilization. Costs are controlled by deductibles, co-insurance and special limitations and exclusions.

CONSUMER - DIRECTED HEALTH PLANS

Positive Control

A Defined Contribution plan or a Health Spending Account (HSSA) changes the focus of reimbursements. Each member receives a pre-determined amount of money or credits per month. The member then must decide on which health care service to buy. Their choice is dependent on the value of that service in relation to the limited dollar resourses available and permitted by The Income Tax Act.

This shift in reimbursement structure promotes employee participation and individual responsibility for budgeting limited resources.

This allowance may be used to reduce benefit costs, stem overuse in specific benefit areas or enhance a current program. A plan may be designed to allow for a carry-forward deposit balance to the next benefit year. Only one carry-forward is allowed, at which time the monies are refunded to the employer. Alternatively, a plan may be designed to allow for the carry-forward of employee claims to the next benefit year. The choice of plan design is made at the beginning of a plan year. Allowable expenses are defined under The Income Tax Act.

Call today to review a comprehensive menu of services for this very popular benefit model.