Park City, Utah (PRWEB) October 21, 2013
Today, Zane Benefits, the number one online small business health benefits solution, published new information on how to setup a defined contribution plan.
According to Zane Benefits’ website, pure defined contribution health plans are quickly becoming the future of small business health insurance.
A pure defined contribution health plan is where the business provides a fixed healthcare allowance that employees can spend on personal health insurance policies.
The shift from employer sponsored plans to defined contribution health plans is similar to the shift in retirement savings from pensions to 401Ks. After realizing the savings associated with moving away from defined benefit retirement plans, many businesses are also applying this model to their healthcare benefit programs.
With a pure defined contribution health plan, employees purchase health insurance and then submit documentation for tax-free reimbursement in accordance with the rules of the specific plan document. This type of medical reimbursement plan is governed by IRS Code Section 105, and is sometimes referred to as a Section 105 Plan.
According to Zane Benefits’ website, to set up a defined contribution health plan, employers should utilize a formalized plan to ensure compliance with the ACA, the IRS, HIPAA, and ERISA. Because of new ACA reforms, most companies will use a limited purpose Section 105 medical reimbursement plan, such as a limited Healthcare Reimbursement Plan, as the foundation of their defined contribution health plan.
And because of the HIPAA and compliance considerations, virtually all companies use a third-party to handle verification of medical expenses and/or reimbursement to employees.
Zane Benefits outlines the four steps small businesses take to set up a Pure Defined Contribution Health Plan.
About Zane Benefits
Zane Benefits was founded in 2006 to provide a revolutionized SaaS (Software-as-a-Service) administration platform ("ZaneHealth") for defined contribution health care. The flagship software provides a 100% paperless administration experience to small businesses and insurance professionals that want to offer better health benefits without a traditional group health insurance plan at lower costs. For more information about Zane Benefits, visit http://www.zanebenefits.com.