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Is a Defined Contribution Health Plan the Answer for You?

According to Zane Benefits, who have helped companies of all shapes and sizes to improve employee wellness over the years, defined contribution health plans are an affordable alternative to employer-sponsored group health insurance plans. Corporate wellness programmes often come with complications, such as cost, minimum contribution, and participation requirements, but defined contribution health plans can help companies to overcome these hurdles. Zane Benefits reported on case studies from their current clients, in order to show how defined contribution works for real companies and nonprofits.

Kids Dental, in Texas, wanted to offer a competitive health benefits plan that was affordable for both the company and 15+ employees, but when they spent three years researching employer healthcare plans, they were unable to find a solution that was affordable and offered good coverage without a high deductible. However, now Kids Dental provides a defined contribution health plan to employees, in which workers are granted tax-deductible allowances for private health insurance and other medical costs. As a result of their Health Reimbursement Arrangements (HRAs), employees of Kids Dental have the flexibility to create a health care solution that best fits their needs.

The Feet, Inc. is a delivery and logistics company based in Colorado, and the company’s health benefits play a large part in recruiting and retaining top employees. However, The Feet’s group health plan exceeded internal budgets, and so the company needed a new health benefits solution; offering the same level of health care for its 30+ employees but at a much lower price. Like Kids Dental, The Feet found their solution in a Defined Contribution Zane HRA, and has used tax-deductible funds to grant monthly allowances to their staff since September 2009.

Recruitment and retention within the organisation is important to the SPOON Foundation. The non-profit organisation for child nutrition, located in Portland, Oregon, needed health benefits to promote this selling point, offering competitive and flexible benefits for SPOON’s valued employees which were affordable for the non-profit organisation. Since March 2012, SPOON has implemented a Defined Contribution ZaneHRA plan, and so employees can now choose their own individual health plans and are reimbursed tax-free for insurance premiums and other eligible medical expenses. As an added bonus to the HRA wellness programme, SPOON can increase benefits options as the organisation grows, but won’t have to involve a group insurance provider.

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