Define Consumer-Driven Health Care
Consumer-driven health care is a health care system in which employers create accounts for employees to pay for their health care needs. This system allows consumers, not third parties, to make direct choices about their health care. It comes in many types including HSA, MSA, HRA and FSA varieties.
Other People Are Reading
-
HSA
-
In an HSA system, also called a Health Savings Account, money can invested into a health care account by both employer and employee. Funds can be withdrawn for other expenses but are then subject to regular taxes and a 10 percent penalty. The insurance must have a high deductible, usually $1,000 to $10,000. There is a limit to the amount of money that can invested.
MSA
-
An MSA (Medical Savings Account) system is similar to the HSA, but only self employed or small businesses are eligible. Funds can be used for non-medical expenses at 15 percent penalty. Employers or individuals can make contributions, but not both and deductibles are lower.
-
HRA
-
An HRA account stands for a Health Reimbursement Account. The employer, not the individual, owns the account and only the employer can contribute. Unlike MSAs or HSAs, account funds cannot be used for non-medical expenses.
FSA
-
An FSA (Flexible Spending Accounts) system is owned by individual who is subject to a "use it or lose it" clause. Contributions are 100 percent tax deductible. Both employers and employees can contribute to the account, but funds can only be used for medical-related expenses. There is no maximum yearly amount of contributions.
Evolution
-
Plans continue to evolve. Developments will include decision support systems and wireless networks linking employees to a personalized health network.
-
References
- Photo Credit doctor image by DXfoto.com from Fotolia.com
