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Zane Benefits Publishes 5-Step Defined Contribution Evaluation
Date:12/12/2012

expenses to make their defined contribution healthcare plan a full health benefit package. Other employers use defined contribution healthcare to supplement existing benefits packages, or to reimburse for dental or vision coverage.

Employees like defined contribution healthcare plans because they are able to choose an individual health insurance plan that suits their needs. Once a qualified premium or expense is incurred, the employee simply submits his or her receipts (using third party HRA software) for reimbursement. Because these expenses are reimbursed tax-free, the employer and employees can save up to 50% combined in taxes.

How to Determine if Defined Contribution Healthcare is Right for a Business
By completing a Defined Contribution Readiness Worksheet, an employer will be better prepared to discuss moving to such a plan with a broker. Here are some key questions that every organization must answer in order to determine if they are ready for a defined contribution healthcare plan:

1. Does the organization have 1 or more employees?

2. Has the organization offered several plan options for employees in the past?

3. In past years, has the employer passed health care coverage expenses on to employees?

4. Is it important for the employer to maintain a consistent contribution amount and allow your employees the option to buy up for the coverage they want?

5. Is the organization looking for a solution that can be more automated to facilitate employee choices?

When "yes" is the answer to these questions, transitioning
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