Health Fund : Explaining a Consumer – Directed Plan

Consumer-Directed Plans are health care plans that offer individuals more options when making health benefit decisions. They also allow more control over spending costs for health care. Most Consumer-Directed Plans offer lower premiums and higher deductibles. These plans can be added to a health fund or other types of health savings plans. Funds put into these types of plans are used to cover costs of health care expenses, which can help provide savings for future medical care needs.

Types of Consumer-Directed Plans
The most common types of Consumer-Directed Plans are health savings accounts, which are usually combined with a high-deductible health insurance plan, flexible spending arrangements and health reimbursement arrangements.

What Consumer-Directed Plans Provide

These type of plans are much like health insurance plans. They provide health care coverage and require deductibles. Deductibles must be paid before the medical care plan begins to cover medical expenses. Consumer-Directed Plans provide 100% coverage for preventive care and a health fund for future medical expenses.

Health Savings Accounts

This type of Consumer-Directed plan is a health fund account that is used to cover costs of medical expenses. The funds are tax-free, but to qualify for these types of accounts, individuals must have a high-deductible plan and no other form of health insurance.

High-deductible Health Plans

These plans are usually combined with a health savings account. Individuals must have a health plan with a high-deductible that is not less than $1100 for individuals and $2200 for families.

Health Reimbursement Arrangements

These plans are funded by employers to help cover costs of medical expenses for employees. Employers decide how much funds to contribute to the plan and employees withdraw the funds when needed to cover medical costs.

Flexible Spending Arrangements

These plans are offered by employers to help employees save money for medical expenses, which is saved before being taxed. Depending on the plan, some allow employers and employees to contribute to the health fund, although there may be a set limit on the yearly contributions.

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