There are various kinds of health insurance plans. There are those that come under the affordable care act. There are insurance plans which are employer based and there are other plans which are known as Qualified Health Plans which are subsidized for those that want to buy them. There are also catastrophic plans. These plans are usually available to people that are below the age of 30. There are also government sponsored insurance coverage plans.
In addition to these common types there are short term health insurance plans and gap insurance plans.
When this is further drilled down to the health insurance coverage which is provided by employers, there are 2 types. There are the defined contribution vs defined benefit. In the former case the employer has the insurance provider, he or she pays the premium on behalf of the employee, incase there are multiple claims, there are chances of the insurance premium being hiked annually. There is no fixed amount which can be budgeted for in such cases. This is usually the traditional way that employers have been providing insurance coverage to their employees.
The other method is defined benefit. The defined contribution vs defined benefit small businessespecially find useful. In the defined contribution health plan, the business includes a certain amount which can go towards the insurance amount – this is included in the taxable income of the employee. The employee then has the flexibility of choosing the insurance partner of his or her choice, the kind of plan that is needed and the best part for the employer is that in cases of claims, the employee directly deals with the insurance provider. That way the employer is saved from the hassle. The employee prefers this method as he or she can choose a plan as per their liking and choice.