Zane Benefits Publishes New Information on How Small Businesses Struggle With Health Insurance

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Why do small businesses struggle to offer health insurance? Here's a look at why small businesses offer health insurance at a much lower rate.

Today, Zane Benefits, the number one online small business health benefits solution, published new information on how small businesses struggle with health insurance.

According to Zane Benefits’ website, small businesses make up the majority of employers in the US, and yet studies show that small businesses struggle the most with offering health insurance. The majority of the 7.4 million employers in the US are micro and small businesses.

A few interesting statistics about US employers:
82% of all US employers (​6 million employers) have less than 200 employees
62% of all US employers (4.6 million employers) have less than 10 employees

Studies show that the smaller the business, the less likely they are to offer health insurance.

98% of all larger businesses (200+ employees) offer health insurance.
39% of all small and medium businesses (< 200 employees) do not offer health insurance.
50% of all micro employers (< 10 employees) do not offer health insurance.

That means 2.37 million small businesses who don't offer health insurance.

​The primary reason small businesses don't offer health insurance is cost. When small business owners are surveyed about the the primary reason they do not offer health insurance, 61% say it's because of cost.

Premiums are rising so quickly that small business owners are often dealt annual renewal rates they cannot afford. Between 1999 and 2012, group health insurance premium rates to cover a single employee increased from $2,196/year to $5,615/year. These cost increases have been reflected in the declining rates of small businesses offering health insurance, especially among employers with less than 10 employees.

The Solution? Alternatives Such as Defined Contribution

Experts predict that up to 60% of educated employers plan to pursue alternatives to offering health insurance by 2014, including “defined contribution”.

With a "pure" defined contribution approach the small business offers health benefits in the form of a stand-alone Health Reimbursement Arrangement. The small business simply uses the defined contribution health plan to reimburse employees tax-free for their personal insurance policies (and other eligible medical expenses, as the business allows in their plan).

A "pure" defined contribution health plan allows the small business to completely define and control the cost of employee health benefits, while providing employees' access to the same or better health insurance coverage.

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 ("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.

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Christina Merhar
Zane Benefits
800-391-9209 6725
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