Park City, Utah (PRWEB) December 10, 2013
Today, Zane Benefits, the number one online small business health benefits solution, published new information on defined contribution accounting questions.
According to Zane Benefits’ website, the top five accounting topics on pure defined contribution health benefits include how to track liability, minimize exposure, and administer the health benefits.
With this type of health benefits, companies give employees a set monthly amount (a "defined contribution") to spend on their own health insurance policy. Employees can purchase a policy in a state health insurance exchange, or through the private market via a broker, online, etc.
Then, using a limited purpose Section 105 medical reimbursement plan (such as a Healthcare Reimbursement Plan or HRP), the company reimburses employees for their qualified expenses.
Defined contribution health benefits is a notional arrangement; an agreement to reimburse employees for their qualified expenses under guidelines in the Plan Document. As such, no funds are expensed until reimbursements are paid..
For financial reporting purposes companies generally accrue a liability on their balance sheets for the portion of unused contributions they believe will ultimately be used.
Companies should look for a defined contribution software provider that offers reporting and real-time monitoring of liabilities, reimbursements, and utilization.
IRC Section 105 allows employers to reimburse health insurance premiums.
It is virtually impossible for a company to stay in compliance without proper benefits administration software.
Click here to read the full article.
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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.