What Does Consumer-Driven Health Plan (CDHP) Mean?
A consumer-driven health plan (CDHP) is an employer-sponsored health insurance plan pairs a high-deductible health insurance plan (HDHP) with the use of either a Health Savings Account (HSA), Flexible Spending Account (FSA), or Health Reimbursement Account (HRA). So-called because the consumer gets to control the use of these companion accounts, Consumer Driven Health Plans offer tax benefits related to funds placed in the HAS, FSA or HRA. To qualify for these tax benefits, a CDHP must meet federal regulations defining a High-Deductible Health Plan (HDHP).
WorkplaceTesting Explains Consumer-Driven Health Plan (CDHP)
First introduced in 2001, Consumer-Driven Health Plans (CDHP) are designed to offer consumers a health insurance option with a lower premium cost. This lowered premium contribution is offset by the high deductible charged for non-preventive health services. To aid covered individuals in being prepared to pay these deductibles, employees may make use of a Health Savings Account, Flexible Spending Account or a Health Reimbursement Account to help an employee save for future costs. The employee controls expenditures made from these accounts, and any unused funds may be carried over into future years. The theory behind these plans is that insured employees with a CDHP may choose their health care providers instead of being limited to a preferred network, and will take the initiative to negotiate costs and limit over-utilization of services. Covered individuals have reported varying degrees of success as well as resistance from healthcare professionals when attempting to take control of their own healthcare.