Park City, Utah (PRWEB) November 10, 2013
Today, Zane Benefits, the number one online small business health benefits solution, published new information on why individual health insurance costs less.
According to Zane Benefits’ website, individual health insurance is more affordable than group health insurance. And as of 2014, individual health plans must cover all individuals regardless of health and new subsidies are available for qualifying employees.
Individual health insurance is a type of health policy that an individual purchases for himself and/or his family. Starting in 2014, all individual health plans must cover employees regardless of health. With individual health insurance, the risk is spread over a large group of people -- hundreds of thousands, even millions depending on the plan and carrier.
Group health insurance coverage is a type of health policy that is purchased by an employer and is offered to eligible employees of the company and to eligible dependents of employees. With group health insurance, the employer selects the plan (or plans) to offer to employees. These days, the premium cost is usually split between the employer and employee, and there is a minimum percentage rate the employer must contribute to the premiums. The premium paid by employers for their group policies is typically increased every year based on the previous year’s healthcare costs of the employee group. With group health insurance, the risk is spread over the company.
If employees meet income requirements, then they will be eligible for health insurance premium subsidies to lower the cost of their premium even more.
According to Zane Benefits’ website, for the majority of small groups, individual health insurance is more affordable than group health insurance because of the size of the risk pool. Using individual health insurance as the foundation of employee health benefits is less financially risky for the small business. With a group health insurance plan, if one employee has a baby, a surgery, or is diagnosed with a chronic illness, a large premium rate increase at annual renewal time is likely.
Because of the affordability of individual health insurance compared with group health insurance, most small businesses are using a pure defined contribution approach paired with individual health insurance to offer employees health benefits. With this type of strategy, the business offers employees a health insurance allowance that employees can spend on purchasing individual health insurance. With health reform, all employees are guaranteed coverage and have access to the health insurance subsidies. Employees purchase the plan that best fits their family's health needs. Employers have complete cost predictability and there are no minimum or maximum contribution amounts.
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.