Which consumer-directed health plan allows participants to enroll in a relatively inexpensive high-deductible insurance plan and open a tax-deductible savings account to cover current and future medical expenses? Money deposited (and earnings) is tax-deferred, and money withdrawn to cover qualified medical expenses is tax-free. Money can be withdrawn for purposes other than health care expenses after payment of income tax plus a 15 percent penalty. Unused balances "roll over" from year to year, and if an employee changes jobs, he or she can continue to use the fund to pay for qualified health care expenses.

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A Health Savings Account (HSA) allows participants to enroll in a high-deductible health plan and open a tax-deductible savings account for medical expenses. It offers tax-deferred growth and tax-free withdrawals for qualified expenses, with unused balances rolling over annually.

Which Consumer-Directed Health Plan Allows Participants to Enroll in a Relatively