A benefit option that enables employees to pay lower monthly health care premiums in exchange for higher out-of-pocket expenses for covered services continues to grow in favor among eligible employees.
Viva Choice — UAB’s consumer-driven health plan (CDHP) — is an alternative to traditional Viva and Blue Cross health care plans offered to eligible employees of UAB, UAB Hospital and UAB Hospital Management LLC during the annual open enrollment for benefits Oct. 16-Nov. 2. (See this PDF for a list of benefit-eligible employees; opens in a new window.)
In 2026, the ninth year that the plan has been offered, 4,000-plus employees enrolled in Viva Choice, which represents 23% of benefit-eligible employees in a UAB plan.
“Our Viva Choice plan offers the lowest premiums among our plans, and it can make good financial sense for employees who have predictable costs,” said Lisa Meddock, assistant vice president for Benefits and Wellbeing at UAB.
What is a CDHP?
A consumer-driven health plan, also referred to as a High Deductible Health Plan or HDHP, provides the same coverage as the traditional health care plans. The difference is how — and how much — you may pay for it.
A CDHP, in this instance Viva Choice, is paired with an HSA — a health savings account — that enables you to set aside pre-tax payroll contributions or after-tax dollars to pay for qualified, out-of-pocket medical expenses.
Viva Choice offers three tax advantages. First, employees can contribute on a pre-tax basis to their HSA; next, employees can invest and grow their HSA balance tax-free, as investment earnings are not taxed; and further, employees can withdraw funds tax free for qualified medical expenses from the HSA. No other benefit offers this triple tax savings opportunity.
In exchange for lower monthly premiums, people with CDHPs pay higher out-of-pocket expenses until they reach an annual deductible. For Viva Choice, the annual deductible in 2027 is $1,800 for single coverage and $3,600 aggregate for a family. For individuals with individual coverage under an HDHP, the annual HSA contribution limit will rise to $4,500 for 2027, up from $4,400 in 2026. The limit for those with family coverage increases to $9,000 for 2027, up from $8,750 in 2026.
All qualified medical expenses — doctor visits, medical tests and prescriptions — count toward the deductible. Once the deductible is met, Viva Choice begins paying 90 percent of claims up to the overall out-of-pocket maximum ($3,700 for single coverage and $7,400 aggregate for a family). Once the out-of-pocket maximum is reached, the plan pays 100 percent of claims for the remainder of the calendar year.
These out-of-pocket expenses can be paid through pre-tax funds you invest in an HSA account.
How does an HSA work?
For years UAB employees have been able to opt for flexible spending accounts (FSA) to help pay for medical expenses. Under current IRS rules, you will be able to set aside as much as $3,300 per year with an FSA, but any FSA funds you do not spend by the year’s end are forfeited.
HSAs are employee-owned accounts that can be used for qualified medical expenses now or saved for long-term expenses. If you enroll in Viva Choice, you will be enrolled automatically in an HSA, and you will be ineligible to contribute to a health care FSA. (You will continue to be eligible for the dependent care FSA plan.)
Like an FSA, your HSAs funds can be accessed using a debit card provided for the account or by submitting a reimbursement claim form. But it differs from an FSA in several important ways:
- You can set aside more to cover expenses. For an HSA, the amount of pre-tax dollars you can set aside for 2027 is $4,500 for single coverage and $9,000 for families. Employees ages 55 and older may contribute an extra $1,000 as a catch-up contribution.
- Unlike an FSA, your HSA election has to be in your account before you can spend it. If you are contributing with payroll deductions, your contributions will accumulate over the course of the year.
- You can save for the future. All the money you invest is yours — always — even if you don't spend it all this year. Balances carry over year to year — and earn interest, and the funds are available to spend on any qualified medical expense that arises.
- You can take it with you. Even if you retire or go to another employer, the funds in your HSA account belong to you. They can be used or saved to pay for long-term retirement expenses, including Medicare premiums or nursing home care.
- UAB contributes to your HSA. UAB will fund the first $600 for single coverage and $1,200 for non-single coverage for employees enrolling during annual open enrollment; that is yours to use whether you invest additional funds or not.
- You can decide to invest more at any time. FSA contributions can only be made through payroll deduction, and the amount is set during open enrollment. With HSAs, employees can contribute up to the IRS limit with pre-tax dollars through payroll deduction and may change their election at any time during the year. HSAs also provide you with the option to contribute with after-tax dollars at any time during the year if you prefer, but you lose the tax advantage with this option.
How does this fit together?
Let’s say you have single coverage, and you go hiking and slip and break your leg. An ambulance picks you up and carries you to the doctor, who X-rays and sets your leg and gives you a prescription for medication and rehab. Let’s say the cost of all this is about $5,000.
With Viva Choice, you pay all expenses up to the annual deductible — $1,800 — and your insurance kicks in for 90 percent of the $3,200 in remaining expenses — or $2,880. Leaving you to pay a total of $2,120, which you can pay out of your own pocket or from funds available in your HSA account. The maximum out of pocket you would pay for single coverage in-network is $3,700. After that, coverage is at 100 percent in-network.
More detailed information about Viva Choice and health savings accounts is available for you in the Open Enrollment toolkit in the UAB for Me portal at uab.edu/hrintouch.
Live virtual educational sessions explaining 2027 open enrollment information and benefits changes will be held from 1-2 p.m. Sept. 30, 1-2 p.m. Oct. 8 and 11 a.m.-noon Oct. 9. Register to attend here.
Meanwhile, contact your school/department HR consultant or the UAB Benefits office at