Park City, Utah (PRWEB) August 06, 2013
Today, Zane Benefits, the online alternative to group health insurance, published new information on trends of defined contribution health plans.
According to Zane Benefits’ website, many experts agree that defined contribution health plans will replace traditional employer-sponsored group health insurance.
With a defined contribution health plan approach, an employer provides employees a fixed health care allowance. Employees may use their health care allowance to purchase individual or group health coverage that fits the health needs and budget of the employee. There are two main approaches with defined contribution health plans.
The first is a "pure" defined contribution approach, where the employer does not prescribe a specific menu of health insurance plans to choose from. Employees can purchase any eligible policy from an insurance broker, online, through the state marketplaces, etc.
The second approach is a more limited defined contribution approach, where employees can use their allowance to select from employer-defined options on a private health insurance exchange.
To many, the shift in health benefits from defined benefits (group health insurance) to defined contribution health benefits is easily relatable to the shift in the retirement benefits space from defined benefits (pensions) to defined contribution (401(k)s).
After realizing the savings associated with moving away from defined benefit retirement plans, many businesses are also applying this model to their health insurance benefit programs.
Businesses are trending toward defined contribution health benefits because they offer controllable costs while still providing employees access to quality health insurance.
For employers, a major benefit is cost predictability and control. Because the defined contribution approach allows a business to define all health benefits costs accurately, a business can predict and control the costs year to year. There is a time savings factor as well; defined contribution health plans take less than five minutes per month to administer.
For employees, a major benefit is increased choice of health insurance plans, personalization of benefits, and the ability to take control over their health benefit decisions. Health care reform in 2014 opens up even more benefits for employees including guaranteed-issue health insurance premiums on the individual market, and affordable policies because of the individual health insurance tax subsidies.
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-percent 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.