UPDATED: Mar 19, 2020
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We partner with top insurance providers. This doesn't influence our content. Our opinions are our own.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about insurance. Our goal is to be an objective, third-party resource for everything insurance related. We update our site regularly, and all content is reviewed by insurance experts.
It is hard to understand all of the acronyms in healthcare today. It can be difficult to know what people are talking about when they throw all the sets of letters around in conversation. It is
interesting to note that most of these acronyms refer to the same basic kind of coverage. Some of these acronyms simply identify different specifications of how a process is handled or how the
insured party is to be reimbursed, if reimbursement is required, for any personal expenses incurred.
SDHP stands for Self Directed Health Plan; this is a refinement of a type of group health insurance that is also known as a Cafeteria Plan. This nickname comes from the fact that this is a
strictly employer-sponsored plan. These plans used to be discussed in the company cafeteria or other meeting areas.
CDHP stands for Consumer Directed Health Plan, which is very much like an SDHP, except that it includes individual and family health insurance plans. These plans are most often provided by the
employer and is well liked for the ability to adapt to the needs and requirements of group members. The remaining types of coverage that are discussed are variations of CDHP.
An FSA, or Flexible Spending Account, is the most well-known type of CDHP, it is occasionally known as a 125 plan; in reference to the IRS code that ensures the exemption of this type of
savings account. These plans are usually used as a health reimbursement fund that is commonly deposited via direct payroll deposits for each employee.
HRA stands for Health Reimbursement Account, this is one of the oldest of the group health coverage plans. Many times HRA is confused with FSA plans, as they have some similarities. Employees
pay weekly or monthly from their paychecks, these payments go into a fund that reimburses any personal expenses incurred from doctor visits or other obligations.
Another popular plan is the has or Health Savings Account. This is generally a high deductible health plan, which means that a large amount of out of pocket payments are associated with this
type of coverage. HSAs are usually associated with standard PPO and HMO plans.
Having discussed these different options, you are now prepared to have informed discussions about health coverage without feeling that you are being marginalized due to a lack of knowledge. The
differences in these varying healthcare saving plans are minimal, however, knowing which one is best for you can save you a lot of money.