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Money Focus
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Order your copy of Building Wealth in a Paycheck-to-Paycheck World by Paul Petillo. It is packed with safe, proven wealth-building strategies that cover all the major components of a balanced financial plan, including:
Defined Benefit Programs
In the never ending battle to control costs in a slower economy, businesses are looking for new and inventive ways to control each and every cost. It wasn't that long ago, health insurance was the draw that kept workers applying for jobs and helped keep them at the company once they were hired. But those days are gone and companies are looking to trim costs without eliminating plans or employees who use those plans.
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.
The confining regulations of the current HMO plans can make this a very attractive alternative. Concerns continue over whether employees will trim back on medical services because of the cost. Studies have also shown that fewer prescriptions are being filled in exchange for over the counter remedies. On the upside though, companies will continue to offer preventive medical treatments for their employees that are fully reimbursed. Flu shots and mammograms are among these services along with massage therapies.
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