1 - What is a defined contribution arrangement?

Defined contribution health benefit plans are employer group health plans individually selected by an employee. In a defined contribution arrangement, rather than promising or providing a certain level of health benefit, the employer provides a pre-determined level of funding that the employee then controls and uses to purchase their choice of health insurance.

2 - Who is eligible to participate in the defined contribution system?

Employers in Utah with a group size of 2 to 50 employees.

3 - How many carriers are participating in the defined contribution system?

Currently several carriers (i.e. Regence Blue Cross Blue Shield, SelectHealth, and United Healthcare) are participating. We expect to see an increased number of participants as we progress.

4 - Why defined contribution?

• Simplified Benefit Management: Defined contribution plans greatly simplify the planning and management of a company's health benefit options. By enrolling in a defined contribution plan on Avenue H, the only decision an employer has to make is how much to contribute towards each employee's health benefit. Employers will no longer be responsible to choose between multiple plans, insurance companies, and provider networks.
• Predictable Costs: By electing to make a defined contribution rather than choosing a company-wide health plan, employers can predict and contain health benefit costs.
• Expanded Benefit Offerings: Enrolling in a defined contribution plan on Avenue H also allows employers to offer greatly expanded health plan options to their employees. Employees will use Avenue H to compare plans, providers, and select the option best tailored to their individual needs; no more one-size-fits-all benefits packages. Offering a tailored health benefit will help businesses attract and retain high-quality employees in a competitive marketplace. It allows employers to offer "big company" benefit options regardless of their size.
• Preserve Tax Benefits: A defined contribution plan also allows employers to continue to offer the tax benefits of an employer-sponsored plan. Employees can pay their portion of their health premium with pre-tax dollars, which reduces the employee's taxable income and also reduces the employer's FICA obligations.