Sunday, October 11, 2009

CDHPs and HSAs? The ABCs of health insurance

Posted by Ka Lee Angel Lee


More workers are likely to be offered a health insurance option that offers a lower premium, but could mean higher out of pocket costs, when open enrollment begins at many companies in coming weeks. Here are some tips for evaluating these new plans, called consumer directed health plans, and the alphabet soup of options this open enrollment season.
What's a consumer-directed health plan?
This is insurance that typically carries a premium lower than traditional coverage, but the trade-off is accepting a deductible that tops $1,200 and can stretch as high as $10,000 for some family plans. Typically, that deductible must be paid before insurance coverage starts.
That can mean paying for bills for blood tests, X-rays or a doctor's office visit in full instead of the usual $20 co-pay many have become accustomed to. Consumer-directed plans are paired with a special account to help manage these expenses. The most common are health reimbursement arrangements (HRAs) and health savings accounts (HSAs).

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