Free Buying Guide: Defined Contribution Health Plans

Defined contribution health plans are a new alternative to employer-sponsored group health insurance plans. Rather than paying the costs to provide a specific group health plan benefit (a "defined benefit"), employers can fix their costs on a monthly basis by establishing a defined contribution health plan.

With a defined contribution health plan, both the business and employees save money.

• The business gives each employee a fixed dollar amount (a "defined contribution") that the employees choose how to spend.

• Employees purchase their own individual policy directly from a health insurance company of their choice (typically, this saves the employee 25-50%).

• Employees use their defined contribution to reimburse themselves for their individual health insurance costs or other medical expenses such as doctor visits and prescription drugs.

• The business fixes all costs and has complete control of the plan.

Small and medium-sized business owners, non-profits, CEOs, CFOs, HR professionals and accountants should download this buying guide to learn how to evaluate defined contribution health plan providers.