CaliforniaChoice stresses health-plan options and cost control

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“Defined contribution” strategies,in which employers offer workers a wide choice of healthcare plans but cap their premium contributions,have been getting a lot of attention because of their potential savings to businesses.

The approach is an alternative to traditional benefit plans, where employees are limited to one or two offerings from their employer. As with traditional plans, employers still pay for a percentage of a healthcare service plan’s cost with defined contribution. But if employees opt for a richer plan, they pick up the difference. The wider range of choices for employees increases competition among plans and is an incentive for them to keep premiums down.

Defined contribution is at the core of Orange-based CaliforniaChoice, a privately held administrator for employers that works with many health plans. CaliforniaChoice, founded four years ago, is an offshoot of Word