Principles of Risk Management and Insurance, 13th Edition

Consumer-Directed Health Plans

Consumer-directed health plans are becoming increasingly popular with both employers and employees in the group medical expense market. A consumer-directed health plan (CDHP) is a generic term for a plan that combines a high-deductible health plan with a health savings account (HSA) or health reimbursement arrangement (HRA). These plans are designed to make employees more sensitive to healthcare costs, to provide a financial incentive to avoid unnecessary care, and to seek out low-cost providers.

High-Deductible Health Plans

A high-deductible health plan is a medical expense plan with an annual deductible that is substantially higher than deductibles in traditional medical expense plans. A high deductible plan that ...