Why your health insurance could go the way of the 401(k)

Most of us have become used to the idea that our retirement savings are largely dependent on what we put into them: Pension plans have gone the way of the dodo, and the future of Social Security is uncertain.

However, the 'you're on your own' mentality may be spreading to an unexpected employee benefit: Health insurance.

Industry experts at the annual Employee Benefit Research Institute policy forum believe that, in the next five years, employee health care plans will begin to mirror the shift in popularity of pensions to 401(k)s, according to MSN Money.

The 401(k) is a type of defined-contribution plan - or a plan where you contribute your own money that your employer may match. If your employer does 'sponsor' you, their contribution is a set amount, but there is no guaranteed benefit for workers when they reach retirement. Defined-contribution plans are beneficial to employers because they shift a majority of the risk to the employee.

In a defined-contribution health plan, an employer would provide a set amount of money for each employee to use to shop on a health insurance exchange. The Affordable Care Act currently limits the use of exchanges to companies with fewer than 100 employees, but in 2017, this type of program could be more widespread as the states will be allowed to open the exchanges to larger employers, as well.

So far, it looks like employers could embrace defined-contribution health plans with open arms. A recent survey from Towers Watson and the National Business Group on Health revealed that only 26 percent of employers are very confident that they'll offer health plans ten years from now. And at the EBRI forum, Larry Zimpleman, C.E.O. of Principal Financial Group, predicted that the rising cost of health care will cause half of employers to adopt defined-contribution heath plans within the next five years.

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