Park City, Utah (PRWEB) July 06, 2013
Today, Zane Benefits, the online alternative to group health insurance, published new information on the definition of defined contribution.
According to Zane Benefits’ website, the term defined contribution is a big buzzword in the health benefits industry. Zane Benefits provides a high-level, executive summary to concisely explain this emerging health benefits strategy.
Defined Benefit vs. Defined Contribution
According to Zane Benefits’ website, it is first important to start with a concept most people are familiar with. In the retirement space, defined contribution is a type of retirement savings plan in which the amount of the employer's annual contribution is specified, such as with a 401(k). Compare this to a pension plan where the employer specifies the benefit (a defined benefit).
In health care, the same logic is followed. A defined contribution health plan is a type of health plan in which the amount of the employer's annual contribution to employees' health care (and individual health insurance policies) is specified. Compare this to a group health plan where the employer specifies the group health insurance plan (again, a defined benefit).
How Defined Contribution Health Plans Work
According to Zane Benefits’ website, defined contribution health plans offer a new alternative to the defined benefit group health insurance plan. Just as employers realized the savings associated with moving away from defined benefit retirement pensions and toward 401(k)s, many businesses are applying this model to their health benefits programs.
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 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 ZaneHRA, visit http://www.zanebenefits.com.