---
title: 10 Analogies to Help Explain Defined Contribution Healthcare
description: It can be helpful to explain Defined Contribution with analogies. Here's our top 10 analogies to help explain Defined Contribution Healthcare.
---

[Personalized Employee Benefits Resources | PeopleKeep ](https://www.peoplekeep.com/blog)

# [10 Analogies to Help Explain Defined Contribution Healthcare](https://www.peoplekeep.com/blog/bid/309167/20-analogies-to-help-explain-defined-contribution-healthcare)

 Written by [Christina Merhar](https://www.peoplekeep.com/blog/author/christina-merhar) | April 25, 2014 at 6:00 PM

As with any emerging concept, analogies can help you explain Defined Contribution Healthcare to colleagues, clients, board members, and employees. We've put together 10 quick analogies to explain "pure" [defined contribution healthcare](https://www.peoplekeep.com/defined-contribution-health-plans).

## Explaining the concept of a "defined contribution", versus a "defined benefit"...

1. Defined contribution works like an [allowance for health insurance](https://www.peoplekeep.com/blog/can-i-reimburse-employees-for-health-insurance)

2. Defined contribution is like a stipend for healthcare, but tax-free

3. Defined contribution is similar to a gift card for health insurance

4. Defined Contribution is like a 401k for healthcare, whereas a Defined Benefit plan is like a pension

5. Defined Contribution is like an all-you-can-eat-buffet whereas a Defined Benefit plan is a prix-fix menu

6. Defined Contribution allowances are like business expense accounts for health insurance

## Explaining defined contribution software...

7. Defined Contribution Software is like QuickBooks online for defined contribution administration

## Explaining individual health insurance...

8. Individual health insurance is a policy you purchase for yourself and your family - just like car insurance

9. The Individual Health Insurance Marketplaces are like an Amazon or Expedia for health insurance

[View full post](https://www.peoplekeep.com/blog/bid/309167/20-analogies-to-help-explain-defined-contribution-healthcare)

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