Assessing the Promise and Peril of Defined Contribution Plans


With health insurance premiums on the rise again, employers are seeking new ways to control their health care costs. Many are considering defined contribution plans, under which a firm establishes the dollar amount it will contribute to its employees' health coverage but not the level of benefits. This project will assess the current status and likely future of these new benefit approaches, especially in terms of their impact on those least able to bear increased financial risk-low-income employees and older, sicker workers. Project staff will survey employee benefit managers; interview executives from employer groups, health insurance companies, and benefit consulting firms; and develop case studies of three pioneers that have adopted defined contribution strategies using Internet-based 'e-health' systems. With a fuller understanding of what may well represent the next generation of health benefits, policymakers and others will be better able to evaluate the potential risks and benefits of this approach to U.S. workers and their families.

Grant Details

Grantee Organization:
Health Research and Educational Trust
Principal Investigator:
Jon R. Gabel, M.A., and Thomas Rice, Ph.D.
Award Amount:
Approval Date:
November 13, 2001

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