Zane Benefits Publishes New Information on Defined Contribution and Shop Exchange

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A Comparison of Defined Contribution vs. the SHOP Exchange

Today, Zane Benefits, the number one online small business health benefits solution, published new information on defined contribution and SHOP exchange.

According to Zane Benefits’ website, with health care reform right around the corner, many small businesses and their brokers are strategizing about the best health benefits solution for 2014. Here's a look at two common small business health insurance approaches: pure defined contribution and group health insurance through the new SHOP exchanges.

A "pure" defined contribution health plan allows the employer to contribute any amount to employees' health care costs (including individual insurance), and gives employees access to individual health insurance subsidies through the new health insurance exchanges.

Pure defined contribution health plans allow the business to defined their contribution amount, rather than defining the specific plan of coverage. A pure defined contribution plan is not linked to a group health insurance plan. Rather, the defined contribution health plan is the business's health benefit.

The business provides employees a fixed monthly allowance for health insurance premiums and other eligible medical expenses.

With the help of a broker or agent, employees purchase their own individual health insurance premiums.

Employees submit their expenses to their defined contribution provider, and the business reimburses employees tax-free on payroll, up to the amount available in their allowance.

One hurdle preventing some businesses to switch to a defined contribution health plan was key employees with a pre-existing condition.

In 2014 this hurdle goes away with guaranteed-issue policies starting.

The SHOP exchanges are a public small group exchange that will be offered in each state. The SHOP exchange is similar to the current small group market except that the small business health care tax credits will only be available through the SHOP, and a limited number of states will offer "employee choice" plans.

Small businesses with less than 100 employees or less than 50 employees are eligible, depending on the state. The small business SHOP exchanges will open on October 1, 2013 for shopping and enrollment, with plan coverage starting January 1, 2014.

Starting in 2014, the small business health care tax credits will only be available through the SHOP exchanges.

Some state's SHOP exchanges will offer small businesses an "employee choice", in which small businesses can offer a choice of health plans to their employees through the SHOP exchange.

Click here to read the 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 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

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Christina Merhar
Zane Benefits
800-391-9209 6725
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