A good alternative to a regular health plan is a consumer driven health plan. These health plans are often used together with a high deductible health plan that helps when a catastrophic medical event occurs. A high deductible health plan is a plan that, as the name suggests, has a high deductible to meet. This plan also has a set out-of-pocket maximum and low premium costs. Deductible minimums and out-of-pocket maximums are set every year by the IRS.
Flexible Spending Account (FSA)An FSA is an account that employers set up for employees to help offset the costs of medical and dependent care costs. Contributions are put in solely by employees but contribution limits for the health care account are set by the employer.
Health Reimbursement Account (HRA)Employers set up HRAs for employees, usually in conjunction with another plan. The amount is set by the employer. Employees can use money from this account to pay for qualified medical expenses such as premiums, co-insurance, deductibles and services.
Both an employer and employee can contribute to an HAS. An HSA is only used with a high deductible health plan. No matter who contributes, all contributions are made on a pre-tax basis.
Medical Savings Account (MSA)The MSA is for self-employed people and certain small businesses only. MSA holders must also have access to a high deductible health plan. It is set up with a bank or other financial institution to set aside money for future qualified medical expenses.