NU Online News Service, April 2, 6:25 p.m. – Employer interest in defined contribution health programs may still be growing.
A recent survey by Aon Corp., Chicago, found that 10% of the participating U.S. employers have already set up a defined-contribution health program, and 13% hope to set up a defined-contribution program in the next year.
The interest makes sense, because most other approaches to holding down health coverage costs are just “tinkering,” according to Richard Sinni, a senior vice president in the New York office of Aon Corp.’s consulting unit.
To really slash costs, “you have to place the employee in a decision-making role,” Sinni says.
Defined-contribution health programs and the terms used to describe them vary, but most combine some kind of employer-paid, high-deductible health insurance with employer-funded personal care accounts. Employees can use the cash from the personal care accounts to pay for routine medical expenses from the providers of their choice.
In some cases, employees can let unused cash accumulate in the accounts from year to year. Although the programs tend to use little or no formal care management, some may help plan members hold down costs by offering access to a preferred provider network.