Plans/coverages
• Conventional
– Premium
– Deductible
– Co-pay
• 30-70
• 20-80
Consumer-directed (driven)
health plans
• Out of your pocket
• Comparison shopping
• New basis for competition
2 Parts
• Health savings account (HSA)
– Personal accounts (contributions)
• $3,000 (I) - $5,950 (F)
– Pre-tax/deductions
– Carry over
– Stock market (?)
– Your funds for your care
2 Parts
• HDHP
• $5,800 (indiv) - $11,600 (family)
• Deductible goes up, premium goes
down
• HSA funds to meet deductible
Percentage of Covered Workers Enrolled in
High-Deductible Plans, 2008
40%
HDHP Without Savings Option
HDHP/SO
30%
22%
20%
10%
10%
13%
0%
4%
5%
Small Firms
Large Firms
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2008.
8%
All Firms
Among Firms Offering Health Benefits,
Percentage That Offer an HDHP/SO, by Firm Size
30%
120%
20%
17%*
13%
10%
225%
275%
22%
18%
15%
13%*
10%
10%
7%
4%
4%
5%
0%
3-199 Workers
200-999 Workers
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2005-2008.
1,000 or More Workers
2005
2006
2007
2008
Bottom Line
• High tax bracket
– On the other hand
• Good with money
• Short-term orientation
• Ongoing/chronic issues
Cash Balance Plan
• 23% of all workers
• “defined” in terms of stated account
balance
• Annual contributions
– E.g., 5% of comp + earned interest (0.29%)
• NOTE: interest credits decrease the longer
you’re in the plan
– No investment risk (!)
Cash Balance Plan
• Rollover
• Retirement
– Annuity
– Lump sum payment
• Federal protection
Cash Balance Plan
• DB vs CB (CB is a defined benefit plan)
– Monthly pymts for life
• Tenure, avg pay, multiplier
– Monthly pymts based on size of acct balance
Cash Balance Plan
• DC vs CB 401(k)
– Contribution/no contribution
– Investment risks
– Life annuities
– Federal guarantee via PBGC