Healthcare Blog

Posts tagged "defined contribution"

Goodbye Employer Provided Health Insurance

health insuranceAn article from Market Watch highlights Rick Lindquist and Paul Zane Pilzer, co-authors of “The End of Employer-Provided Health Insurance.” The book goes over why group health insurance is a thing of the past and why individuals, their families, and their employers are all benefiting from moving away from group health insurance options.

Group health insurance rates continue to rise and that’s where Zane Benefits steps in. Zane Benefits is not a health insurance company, but a company that administers defined-contribution plans. What is that you might be asking? It is a benefit plan that gives employees a set amount of money each month that they can use for reimbursement of their health insurance premiums. This plan allows employees to have choice in selecting their health insurance plan. The employer is removed from the selection and allows the employee to shop for an insurance plan that custom fits them and their family.

In Lindquist and Pilzer’s book they project that by 2017, the majority of small businesses will switch to defined-contribution. This shift is being led by small business owners, but they aren’t the only ones dropping health insurance and looking for other options. Verizon and AT&T leaked documents saying they were considering dropping health insurance plans as well.

With the potential savings benefit of this plan why wouldn’t all companies choose this option. Well simply said, you don’t know what you don’t know. Companies don’t understand how a defined-contribution plan could benefit them, not only savings on the part of the employer and the employee, but also helps employee retention as well. What employee wouldn’t want to choose their own health insurance rather than have somebody choose for them?

Read the full Market Watch article HERE and let me know if this is an option you would look into for your company!

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Posted by Lauren Yeager in All Posts, Health Insurance, Small Business and tagged , , , , ,

What Makes Employees Stay?

EmployeesEmployees come and go from companies, but what helps a company keep an employee and keep them happy? A recent article by the Employee Benefits Research Institute says that the benefits both attract and retain the best workers. In a 2013 survey EBRI discovered that the benefits package is an important factor in a potential employees decision to accept or reject a job. The survey was also able to show that many workers weren’t satisfied with the benefits package being offered.

One of the best advantages of defined contribution health benefits is that an employee has the option to choose their own individual health plan rather than being given a one size fits all group plan. With this option an employer gives back the freedom of choice to the employee. This way they can choose a plan tailored to their healthcare needs for both themselves and their families. Defined contribution plans also allow employers to tailor their contribution to each employee. Unfortunately group plans do not allow this freedom on the employer or employee side.

As a company if you want a high employee retention rate are you looking into other options for your employees that give them more choices than a traditional group plan does?

Read the full article from the Employee Benefits Research Institute HERE

 

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Posted by Lauren Yeager in Health Insurance, Small Business and tagged , , , , ,

Common Misconceptions with Defined Contribution

QuestionThere are common misconceptions with defined contribution plans as to their legality and how to set them up to comply with regulations. One of the common questions comes from understanding that the employer is not directly paying for an employee’s individual health insurance. When a company sets up a defined contribution plan it must be compliant with IRS, ERISA, HIPPA, and ACA guidelines. We typically recommend using an administrator when setting up these plans. So why do you need to set up a formal plan to be in compliance versus giving the employee funds directly?

To maintain compliance employers aren’t involved in the employee’s decision to choose their individual health policy, the employer does not directly pay for the insurance premium, and the employer is not involved in any communication between the individual and the insurance company. When following the above guidelines it allows the employer to contribute to an individual health insurance plan maintaining compliance with federal law.

In a defined contribution plan employers are able to give employees different contributions based on their class or position within the company. This class can be based on job categories, geographic location, part-time or full-time status, etc. A class must treat all employees equally, to avoid discrimination. These classes are defined by the employer in an ERISA plan document before the defined contribution plan is put into place.

We have found Zane Benefits is one of the best at administering defined contribution plans. Zane offers a FAQ sheet on their website HERE. For more common misconceptions and answers visit their website. What are some of your biggest questions when it comes to Defined Contribution?

 

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Posted by Lauren Yeager in All Posts, Did You Know?, Health Insurance, In The News, Small Business and tagged , , , ,

Making Waves as a Small Business

InnovationAs a country built on small business and entrepreneurship, what has allowed these companies to thrive? Many of these companies have seen a problem and created a solution. They see what needs to be fixed and fix it, often creating back lash from the companies who the “problem” originates with. In the healthcare industry we have seen that Group Health Insurance is broken and offer a solution to solve the “pain” that comes with group health plans. Naturally getting backlash from Group Health Insurance brokers saying that what we are doing isn’t legal. Fair enough, we understand their sentiments come from seeing the rug being pulled out from under them. So with any good and fair new option you can either adapt or fizzle out.

In a recent article posted on Zane Benefits website their President and CEO Rick Lindquist writes about a meeting he had with the former general manager of Uber. A company that has completely turned the taxicab industry upside down. The former general manger whose name is not mentioned said, “I bet the insurance brokers are reacting similarly to the taxicab drivers.” The biggest jab any company can come up with to negate a new innovation or option that is trying to disrupt the norm is a question of legality. Although, when you know without a doubt that what you are doing is legal then there is very little that can be done by the industry scrambling to save their profits. So rather than trying to smear the other company they must adapt.

If I were the taxicab industry and saw what was happening to my industry I would develop a similar program to Uber and keep the steady steam of income in my pocket. Then thank Uber for showing me a different way of bettering my business. Fear is a tricky thing though, and the unknown keeps most behind the curve instead of ahead. So whether you’re an industry leader staring down his competitor with a new innovation, or a consumer not sure if you should try a new option, I say take the leap. Possibility is never stagnant! What are you willing to try? What waves are you willing to make to create change for the better?

Read the full article from Zane Benefits HERE

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Posted by Lauren Yeager in All Posts, Small Business and tagged , , , ,