Its nice when (on the rare occasions) college work and life intersect. I’ve been learning about cafeteria plans in my risk class, and this open enrollment season I signed up for a cafeteria plan which on paper seems to be just what I need. Whether I will be unhappy with this plan remains to be seen. How does this work? A brief description:
Typically, in a consumer-driven plan, employees are each given a health reimbursement account (HRA) that is funded by the employer. (Some plans use pre-tax-dollar health savings accounts, or HSAs , which were recently changed to allow for rollover and portability so that they would work with consumer-driven plans.) From that account, employees pay for their healthcare until they reach their plan’s relatively high deductible, when a traditional HMO or PPO kicks in. The traditional plan carries a relatively low premium, which both employers and employees welcome, because of the high deductible, which employees are not so happy about. The catch that sometimes frightens employees: There is often not enough money in the HRA to cover their required out-of-pocket expenses. On the other hand, the carrot that frequently entices those who do not anticipate sizable medical expenses is the fact that they get to roll over into the next year unused HRA money.
The option I picked was Aetna’s HDHP. I fund the account a little bit in addition to my employer. However unlike a flexible spending account I had before at an old job, there is no “use it or lose it” provision, but a “rollover” provision which I like more.
