Which consumer-directed health plan allows tax-exempt accounts to be offered by employers with 50 or more employees, which individuals then use to pay health care bills? Funds must be used for qualified health care expenses, and unspent money can be accumulated for future years. If an employee changes jobs, he or she can continue to use the funds to pay for qualified health care expenses.
a. customized sub-capitation plan
b. flexible spending account
c. health savings account
d. health reimbursement arrangement
Question 2
Which consumer-directed health plan allows participants to enroll in a relatively inexpensive high-deductible insurance plan and open a tax-deductible savings account to cover current and future medical expenses? Money deposited (and earnings) is tax-deferred, and money withdrawn to cover qualified medical expenses is tax-free. Money can be withdrawn for purposes other than health care expenses after payment of income tax plus a 15 percent penalty. Unused balances roll over from year to year, and if an employee changes jobs, he or she can continue to use the fund to pay for qualified health care expenses.
a. customized sub-capitation plan
b. flexible spending account
c. health savings account
d. health reimbursement arrangement
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