Defined Contribution Health Plans: A Win-Win for Employer and Employee

 In Blog

Employers are facing key decisions about the level and types of benefits to offer their employees, given rising health care costs and premiums. Private insurers continue to create new cost-sharing measures in health care plans. Many employees face the challenge of high deductible amounts attached to their health insurance. Given these events and changes for both public and private payers, some experts speculate that health care spending growth will outpace the growth of the economy. It is predicted by 2015 that one in every five dollars will be devoted to health carecosts.

More and more companies will be offering Defined Contribution Health Plans. Just as employers realized the savings associated with moving away from defined benefit retirement pensions and toward 401(k) plans, many businesses are applying this model to their health benefits program. Defined contribution health plans work for employers and employees because:

  • The contributions can be tax-free to the employer and employees receive pre-tax
  • The employer gains fiscal control and predictability over their health benefits budget.
  • There are no minimum or maximum contribution amounts, and no minimum
  • Employees have choice in health insurance plans and make consumer-driven choices.

Defined contribution health plans will have the same benefits of a defined benefit (group health insurance) plan, often at a much lower cost for the business and employees.

Please visit our website at to see how we can help you with employee benefits administration and other business consulting solutions.

HelenAbout the Author:

Helen Usher – Director of Benefits

About Anthros, Inc.:

Anthros provides expert back-office solutions in human capital management-from payroll and human resources, risk management and workers’ compensation to business consultation and beyond. Anthros focuses on “Human Capital” so businesses can focus on profits.

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