Defined contribution--the future for health care uri icon

abstract

  • Employers are seeing breathtaking health care premium increases. As action-oriented people, they are not going to cough up additional money to pay for these rate increases. The real question is what solution might employers move to? The most logical answer is defined contribution--a way that employers could give employees health benefit funding that resembles what they have already done in pension funding. Today, facing massive cost pressures from their health care premiums, many employers are wishing that they could create or use the equivalent of a defined contribution plan for health care. The next major evolution of defined benefit health financing needs the full-scope functional equivalent of a 401 (k) administrator to make the concept work--someone to give employers the tools needed for employees to make meaningful choices. Up until now, no one has been able to give consumers meaningful data about health care and health benefit alternatives. A viable 401 (k) health administrator will need to offer an array of choices that will work for all players.

publication date

  • 2000