Park City, Utah (PRWEB) June 09, 2013
Today, Zane Benefits, Inc. published new information on health reimbursement arrangements for small businesses. Zane Benefits, which provides comprehensive and flexible alternatives to traditional employer sponsored health benefits, is the leader in defined contribution and HRAs.
According to Zane Benefits’ website, stand-alone Health Reimbursement Arrangements (HRAs) provide small businesses a way to offer employees excellent health benefits without the cost or complication of group health insurance.
An HRA is a Section 105, employer-funded, tax advantaged employer health benefit plan that reimburses employees for out of pocket medical expenses and personal health insurance premiums. A stand-alone HRA is not linked with a group health plan, rather the stand-alone HRA is the employee health benefit. A stand-alone HRA is also referred to as a "pure" defined contribution health plan or a stand-alone Health Reimbursement Account.
Zane Benefits provided eight (8) ways stand-alone HRAs help small businesses get out of the health insurance business and focus their valuable resources on growing their business, while still providing a valuable health benefit that helps recruit and retain key employees.
#1: HRAs Provide Employees Plan Choice
According to Zane Benefits’ website, with a stand-alone HRA, the small business provides employees with a fixed HRA allowance. Employees then purchase any personal health insurance policy, and are reimbursed for their policy (up to the amount of their HRA allowance). Employees can choose any health insurance policy that fits their specific health needs including the type of plan (high-deductible, low-deductible, HSA-compatible, etc), what the plan covers (maternity, dental, etc) and carrier.
Compared to an employer-sponsored plan: With an employer-sponsored plan, the employer chooses and administers the insurance plan. Small businesses, however, have little bargaining power in the small-group market. Of businesses with less than 200 workers, 86% that offer an employer-sponsored plan only offer one (1) plan.
#2: HRAs Reduce Red Tape
According to Zane Benefits’ website, offering a stand-alone HRA reduces the time the business spends on health benefits administration and paperwork. Once the HRA plan is set up online, the health benefit becomes a payroll function where the small business uses HRA software to add reimbursements to payroll. For the average small business, HRA administration takes 5 minutes a month. Less administrative time means more time available to run and grow the business.
Compared to an employer-sponsored plan: Small businesses select their employees’ insurance plans and play a larger role in plan management.
#3: HRAs Offer Financial Predictability
According to Zane Benefits’ website, offering a stand-alone HRA aids financial predictability for small businesses. With a stand-alone HRA, the small business decides how much they will contribute to employees' health care expenses. There are no minimum or maximum amounts a business can contribute, so if a business wants to contribute any amount to employees' health care costs, they can afford a stand-alone HRA. This level of cost controls and flexibility leads to financial predictability, allowing the business to grow faster.
Compared to an employer-sponsored plan: While monthly premium rates are predictable, most businesses face an annual premium increase year after year. According to a recent study by Aon Hewitt, the average employer-sponsored health premium was projected to increase 6.3% in 2013. Steady 5-10% annual premium increases add up fast for any business.
#4: HRAs Free Up Cash Flow
According to Zane Benefits’ website, a stand-alone HRA is a notional account and funds do not accumulate in a separate account. Rather, the business reimburses employees only after their employees incur expenses. Because the business does not need to pre-fund the HRA allowances, and only reimburses once employees show proof of eligible expenses, the HRA frees up cash flow for the business. This is valuable for any growing business and makes offering the benefit feasible for many start-ups and small businesses.
Compared to an employer-sponsored plan: Premiums are usually paid monthly or quarterly. The key difference is that with a stand-alone HRA, the business reimburses employees directly on payroll, and only for expenses they've incurred (up to the amount they have available).
#5: HRAs Help Increase Employee Morale
According to Zane Benefits’ website, provided in the right way (and using the right HRA Software provider), offering a stand-alone HRA increases employee morale because the small business is offering employees more choices and better choices than they currently have. Employees are no longer limited to the "one-size-fits-all" insurance choice. The portability of personal insurance policies is a great benefit to employees; when employees leave the business they keep their insurance policy. And, in 2014 all policies will be guaranteed-issue and affordable through the health insurance Marketplaces. There are two key factors when offering the HRA, however. (1) Choose the right HRA Software provider who will help educate employees and offers an easy-to-use online system, and (2) Coordinate with an insurance agent who can help employees select and purchase a personal insurance policy.
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 http://www.zanebenefits.com.