bluecollardollar: on defined benefit health insurance

Less than a million Americans are currently enrolled in a revolutionary type of healthcare that allows the employee more liberties in choosing who will care for them and how much they want to pay. This is something that could catch on with great speed as medical costs of plans continue to rise into the stratosphere.

Creating a defined benefit program allows the employee to spend a certain amount of money allotted by the company on whomever they chose. This freedom to chose their own personal health service has its good side and its downside.

For those who shop and are well versed with asking the right questions about fees and services, the money saved on health maintenance can go quite far. Companies set a medical budget for the year, creating an account of sorts that the employee can spend at will on whatever service they wish. These plans often include both medical and pharmaceutical services.

For example, an employee is given a certain cash balance in his or her account. This cash balance can be used during the year however the employee sees fit. After the balance in the account is used up, a self pay period kicks in often with limits less than the beginning balance of the account. After that is used up, and the employee is still with the company, the company will kick in and begin paying the health insurance at a predetermined percentage. Companies will often allow employees to roll over the balance form these accounts into the following year.