1. Plans/coverages Conventional Premium Deductible Co-pay 30-70 20-80
After payment of deductibles, cost of medical and health services are to be shared proportionally between insured and insurance company.
Mostly it is in the ratio of but some companies and policies provide ratio.
This mutual sharing of expenses is termed as coinsurance.
Here also higher the coinsurance lower will be the premium.

3. Consumer-directed (driven) health plans
Out of your pocket
Comparison shopping
New basis for competition
Out of your pocket
Consumers will be more judicious in seeking health care if have to pay more of its costs
Comparison shop for doctors, treatment
Medical providers then lower prices to compete
Today compete on offering more tests and more specialized tests

4. 2 Parts Health savings account (HSA) Personal accounts (contributions)
$3,000 (I) - $5,950 (F)
Pre-tax/deductions
Carry over
Stock market (?)
Your funds for your care
HSA
is a flexible spending account in which consumers and employers make tax-advantaged contributions that the consumer uses to pay out-of-pocket health care expenses.
Max of $3,000 for indiv, and $5,950 for family
Are either pre-tzx dollars or tax deductions
KEY POINT: tax advantage decreases as your tax bracket decreases
You can carry over unused balances from one year to the next
Idea is to build up a nest egg while you’re young and healthy to cover higher medical costs as you age
You can put your money in the stock mkt as an HSA
You use these funds to pay for your routine care
Idea is that if Americans see a relationship between medical cost and their bank accounts, they will consume less medical care, shop for bargains, and be more vigilant against excess and fraud in the health care industry.
Introducing consumer-driven supply and demand and controlling inflation in health care and health insurance were among the government's goals in establishing these plans.

5. 2 Parts HDHP $5,800 (indiv) - $11,600 (family)
Deductible goes up, premium goes down
HSA funds to meet deductible
HDHP
Health insurance plan with a high deductible
This lowers the premium because insurance company doesn’t pay for your routine stuff
Means this is basically a catastrophic health insurance policy
This deductible can range from a low of $1,150 (individ) $2,300 (fam) to $5,800 (indiv)-$11,600 family (to be a legally tax-sheltered savings account
Can buy on your own, which will give lower deductible but no tax savings
Higher the deductible, lower your premium
Use your money in HSA to meet the deductible
Seeing more small businesses offering this it is (probably) the cheapest alternative for companies that can’t afford to cover their workforces

6. Percentage of Covered Workers Enrolled in High-Deductible Plans, 2008
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2008.

7. Among Firms Offering Health Benefits, Percentage That Offer an HDHP/SO, by Firm Size
120%
275%
225%
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits,

8. Bottom Line High tax bracket Good with money Short-term orientation
On the other hand
Good with money
Short-term orientation
Ongoing/chronic issues
Bottom line:
If in high tax bracket and good health, these can be good because pre-tax , grow tax free, no tax penalty for withdrawals
On the other hand – low-income can’t afford the substantial out-of-pocket costs
If savvy in managing your money and health care, these can be good
But if put off basic health care to conserve funds, these can be bad
If have serious issues and need considerable medical attention during the year, these can be bad
People tend to forgo treatment, especially in terms of prescription drugs
BOTTOM LINE – may reduce health care utilization, but WON’T reduce the # of unemployed
Low income folks can’t afford the deductibles and don’t benefit from plans’ tax advantages

9. Are good things for you here (GRAVE risks, too)
Typically faster vesting than defined benefit plans
More portable than pensions (which are deferred annuities)
Both of these features much better in a world where people change jobs/companies on a very regular basis
Also much easier to borrow against
WHICH CAN BE VERY VERY DANGEROUS

10. Cash Balance Plan 23% of all workers
“defined” in terms of stated account balance
Annual contributions
E.g., 5% of comp + earned interest (0.29%)
NOTE: interest credits decrease the longer you’re in the plan
No investment risk (!)
In a typical cash balance plan, a participant's account is credited each year with a pay credit (such as 5 percent of compensation from his or her employer) and an interest credit (either a fixed rate or a variable rate that is linked to an index such as the one-year Treasury bill rate). Increases and decreases in the value of the plan's investments do not directly affect the benefit amounts promised to participants. Thus, the investment risks and rewards on plan assets are borne solely by the employer.
When a participant becomes entitled to receive benefits under a cash balance plan, the benefits that are received are defined in terms of an account balance. For example, assume that a participant has an account balance of $100,000 when he or she reaches age 65. If the participant decides to retire at that time, he or she would have the right to an annuity. Such an annuity might be approximately $10,000 per year for life. In many cash balance plans, however, the participant could instead choose (with consent from his or her spouse) to take a lump sum benefit equal to the $100,000 account balance.
In addition to generally permitting participants to take their benefits as lump sum benefits at retirement, cash balance plans often permit vested participants to choose (with consent from their spouses) to receive their accrued benefits in lump sums if they terminate employment prior to retirement age.
Traditional defined benefit pension plans do not offer this feature as frequently.
For more about vesting and distribution of benefits see What You Should Know About Your Retirement Plan.
If a participant receives a lump sum distribution, that distribution generally can be rolled over into an Individual Retirement Account (IRA) or to another employer's plan if that plan accepts rollovers. See IRS Publication 575 Pension and Annuity Income: Rollovers or Publication 590 Individual Retirement Arrangements (IRAs): Traditional IRAs - Can I Move Retirement Plan Assets? for more information.
The benefits in most cash balance plans, as in most traditional defined benefit plans, are protected, within certain limitations, by federal insurance provided through the Pension Benefit Guaranty Corporation.

11. Cash Balance Plan Rollover Retirement Federal protection Annuity
Lump sum payment
Federal protection
In a typical cash balance plan, a participant's account is credited each year with a pay credit (such as 5 percent of compensation from his or her employer) and an interest credit (either a fixed rate or a variable rate that is linked to an index such as the one-year Treasury bill rate). Increases and decreases in the value of the plan's investments do not directly affect the benefit amounts promised to participants. Thus, the investment risks and rewards on plan assets are borne solely by the employer.
When a participant becomes entitled to receive benefits under a cash balance plan, the benefits that are received are defined in terms of an account balance. For example, assume that a participant has an account balance of $100,000 when he or she reaches age 65. If the participant decides to retire at that time, he or she would have the right to an annuity. Such an annuity might be approximately $10,000 per year for life. In many cash balance plans, however, the participant could instead choose (with consent from his or her spouse) to take a lump sum benefit equal to the $100,000 account balance.
In addition to generally permitting participants to take their benefits as lump sum benefits at retirement, cash balance plans often permit vested participants to choose (with consent from their spouses) to receive their accrued benefits in lump sums if they terminate employment prior to retirement age.
Traditional defined benefit pension plans do not offer this feature as frequently.
For more about vesting and distribution of benefits see What You Should Know About Your Retirement Plan.
If a participant receives a lump sum distribution, that distribution generally can be rolled over into an Individual Retirement Account (IRA) or to another employer's plan if that plan accepts rollovers. See IRS Publication 575 Pension and Annuity Income: Rollovers or Publication 590 Individual Retirement Arrangements (IRAs): Traditional IRAs - Can I Move Retirement Plan Assets? for more information.
The benefits in most cash balance plans, as in most traditional defined benefit plans, are protected, within certain limitations, by federal insurance provided through the Pension Benefit Guaranty Corporation.

12. Cash Balance Plan DB vs CB (CB is a defined benefit plan)
Monthly pymts for life
Tenure, avg pay, multiplier
Monthly pymts based on size of acct balance
How do cash balance plans differ from traditional pension plans? While both traditional defined benefit plans and cash balance plans are required to offer payment of an employee’s benefit in the form of a series of payments for life, traditional defined benefit plans define an employee's benefit as a series of monthly payments for life to begin at retirement, but cash balance plans define the benefit in terms of a stated account balance. These accounts are often referred to as hypothetical accounts because they do not reflect actual contributions to an account or actual gains and losses allocable to the account.

13. Cash Balance Plan DC vs CB 401(k) Contribution/no contribution
Investment risks
Life annuities
Federal guarantee via PBGC
Cash balance plans are defined benefit plans. In contrast, 401(k) plans are a type of defined contribution plan.
More about Defined Benefit Plans and Defined Contribution Plans.
There are four major differences between typical cash balance plans and 401(k) plans.
Participation. Participation in typical cash balance plans generally does not depend on the workers contributing part of their compensation to the plan; however, participation in a 401(k) plan does depend, in whole or in part, on an employee choosing to make a contribution to the plan.
Investment Risks. The investments of cash balance plans are managed by the employer or an investment manager appointed by the employer. The employer bears the risks and rewards of the investments. Increases and decreases in the value of the plan's investments do not directly affect the benefit amounts promised to participants. By contrast, 401(k) plans often permit participants to direct their own investments within certain categories. Under 401(k) plans, participants bear the risks and rewards of investment choices.
Life Annuities. Unlike many 401(k) plans, cash balance plans are required to offer employees the ability to receive their benefits in the form of lifetime annuities.
Federal Guarantee. Since they are defined benefit plans, the benefits promised by cash balance plans are usually insured by a federal agency, the Pension Benefit Guaranty Corporation (PBGC). If a defined benefit plan is terminated with insufficient funds to pay all promised benefits, the PBGC has authority to assume trusteeship of the plan and to begin to pay pension benefits up to the limits set by law. Defined contribution plans, including 401(k) plans, are not insured by the PBGC.