Zane Benefits Publishes New Information on Defined Contribution for Small Businesses

Share Article

New Solution Allows Small Businesses to Control the Cost of Employee Benefits

Today, Zane Benefits, Inc. published new information on defined contribution for small businesses. Zane Benefits, which provides comprehensive and flexible alternatives to traditional employer sponsored health benefits, is the leader in defined contribution and health reimbursement arrangements.

According to Zane Benefits’ website, a defined contribution health plan works best for companies that want to offer health benefits, but cannot offer group health insurance due to high cost or participation requirements. Zane Benefits provides information about the cost of a defined contribution plan for a small business.

Defined Contribution Plan - A Simple Overview

According to Zane Benefits’ website, rather than paying the costs to provide a specific group health plan benefit (a "defined benefit"), employers can control their monthly costs by establishing a defined contribution health plan (through a Health Reimbursement Account or HRA).

Defined contribution health plans are an affordable alternative to employer-sponsored group health insurance plans. Defined contribution health plans by themselves are not health insurance plans.

The general concept of a defined contribution health plan is that a company gives each employee a fixed dollar amount (a "defined contribution") that the employees choose how to spend. Typically, employees are allowed to use their defined contribution to reimburse themselves for individual health insurance costs or other medical expenses such as doctor visits and prescription drugs.

Defined Contribution Plan - How Much Does it Cost?

According to Zane Benefits’ website, the cost of a defined contribution plan is 100% up to the employer. In other words, if a company wants to contribute any amount to employees' health care costs, they can afford a defined contribution plan.

To calculate the cost of a defined contribution plan, an employer would follow three simple steps:

1. Monthly or Annual Budget: Set an overall budget you can contribute to employee health benefits.

2. Allowance Amounts: Within the overall budget, set employees' allowance amounts (allocated monthly or annually).

3. HRA Administration Fees: Factor in HRA Software or Administration fees. Fees will vary by administrator, but are usually charged as a one-time set up fee and per employee per month "PEPM" fee. As needed, adjust employee allowance amounts to stay within your overall budget.

With defined contribution plans there are no minimum or maximum contribution amounts so the employer truly does define and control all costs of a defined contribution plan.

Click here to read full article.


About Zane Benefits
Zane Benefits was founded in 2006 to provide a revolutionized SaaS (Software-as-a-Service) administration platform ("ZaneHRA") for Health Reimbursement Arrangements (HRAs) and defined contribution health care. The flagship software provides a 100% paperless administration experience to employers and insurance professionals that want to offer better health benefits without a traditional group health insurance plan at lower costs. For more information about ZaneHRA, visit

Share article on social media or email:

View article via:

Pdf Print

Contact Author

Christina Merhar
Zane Benefits
800-391-9209 6725
Email >
Follow us on
Visit website