As with any emerging concept, analogies can help you explain Defined Contribution Healthcare to colleagues, clients, board members, and employees. We've put together 10 quick analogies to explain "pure" defined contribution healthcare.
Explaining the concept of a "defined contribution", versus a "defined benefit"...
1. Defined contribution works like an allowance for health insurance
2. Defined contribution is like a stipend for health care
3. Defined contribution is similar to a gift card for health insurance
4. Defined Contribution is like a 401k for healthcare, whereas a Defined Benefit plan is like a pension
5. Defined Contribution is like an all-you-can-eat-buffet whereas a Defined Benefit plan is a prix-fix menu
6. Defined Contribution allowances are like business expense accounts for health insurance
Explaining defined contribution software...
7. Defined Contribution Software is like QuickBooks online for defined contribution administration
8. With Defined Contribution software, employees have 24/7 Fed-Ex like tracking on their reimbursement requests
Explaining individual health insurance...
9. Individual health insurance is a policy you purchase for yourself and your family - just like car insurance
10. The Individual Health Insurance Marketplaces are like an Amazon or Expedia for health insurance
What analogies do you use to explain "pure" defined contribution healthcare? Share your thoughts with a comment below.