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How to offer custom defined contribution solutions webinar

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How to Offer Custom Defined Contribution Solutions: http://www.zanebenefits.com/

How to Offer Custom Defined Contribution Solutions: http://www.zanebenefits.com/


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  • 1. How To Offer Custom DefinedContribution Solutions
  • 2. The ZaneHRA Software provides a 100% paperless administration experience to employers and insuranceprofessionals that want to offer better health benefits without a traditional group health insurance plan at lower costs.For more information about ZaneHRA, check out our Software.Employers use ZaneHRA to open and manage their own stand-alone HRA or defined contribution health plancompletely online, electronically enroll participants and print welcome kits, and monitor expenses andreimbursements in real-time.Employees obtain their own individual health policies from a designated health insurance broker (see below),submit premium and medical expenses online, via fax, or mail, and receive same-day reimbursement via check,payroll addition, or direct deposit. Zane Benefits does not sell health insurance.Insurance Professionals partner with Zane Benefits and use ZaneHRA to provide clients with a cost-savinghealth benefits option. Insurance brokers earn compensation on ZaneHRA referrals and retain 100% of the healthinsurance compensation from carriers. ZaneHRA is distributed by leading health insurance carriers, agencies,brokers, and accountants. DISCLAIMER The information provided herein by Zane Benefits is general in nature and For additional resources on should not be relied on for commercial decisions without conducting Health Care Reform, visit independent review and analysis and discussing alternatives with legal, accounting, and insurance advisors. Furthermore, health insurance www.zanebenefits.com/blog regulations differ in each state; information provided does not apply to any specific U.S. state except where noted. See a licensed agent for detailed information on your state. www.ZaneBenefits.com
  • 3. Zane Benefits is the national leader in HRAs and Defined Contribution Healthcare.Agenda1. What is Pure Defined Contribution?2. How to Offer a Custom Defined Contribution Plan3. 2014 Reform and the Future of U.S. Health Insurance4. Defined Contribution and Health Insurance Exchanges5. Summary
  • 4. Become a Fan on Facebook Follow us on Twitter Join our Defined Contribution Group Watch our videos on YouTubeWho is Zane Benefits? ● Founded in 2006 ● Clients in all 50 States ● Distributed nationally by top Insurance Companies, Brokers and Payroll Cos since 2009 Even if Berneche carries out his plan to nearly double the UnitedHealth is encouraging 100s size of his company, he still of its independent agents to take expects to save at least an online course offered by Zane $360,000 this year with the Benefits to learn how to market new [Zane Benefits] program individual plans at companies Zane Benefits works with Zane Benefits Founder Paul Zane Pilzer companies to help them give writes that employer sponsored group employees a tax-free health insurance will be “mostly allowance to purchase eliminated” in the next 20 years. individual policies Zane Benefits Paul Zane Forbes.com on "Getting Better Health Pilzer speaks on HRAs, Insurance" featuring Zane Benefits Individual Health Policies, Founder Paul Zane Pilzer and Defined Contribution Health Benefits
  • 5. What is Pure Defined Contribution?
  • 6. What is Pure Defined Contribution?● HRA is "purest" form of Defined Contribution.● HRA stands for “health reimbursement arrangement”.● Its an “arrangement” for tax- free medical expense reimbursement.● HRAs function like business HRAs are NOT health insurance expense accounts.
  • 7. Health Reimbursement Arrangement Overview - SimpleThe Employer... Like Auto The Employees.... Insurance1. Determines contributions 6. Purchase individual policies2. Sets eligibility 7. Submit "expenses" for reimbursement3. Picks start date Third Party Claims Processor4. Enrolls employees 8. Adjudicates employees "expenses"5. Sends welcome kits Like Business Expense Reimbursements9. Reimburses employees for"expenses"
  • 8. Sample HRA Ledger
  • 9. HRA Compliance RequirementsAn HRA is an employer-sponsored,self-funded health plan governedby: 1. HIPAA - employee medical privacy law 2. ERISA - federal law 3. IRS - Section 105 4. PPACA - health reform Need Compliant HRA Administration Software
  • 10. How to Offer a Custom Defined Contribution Plan
  • 11. Plan Design Feature #1 - Employee Eligibility Based on JobClassifications Businesses can set HRA eligibility and allowance amounts based on bona- fide business differences such as: ● Job category ● Geographic location ● Part-time or full-time ● Date of hire, etc.
  • 12. Plan Design Feature #2 - Capping Annual Rollover of UnusedFunds Businesses have full control over what happens to employees unused HRA funds at the end of the plan year.
  • 13. Plan Design Feature #3 - Deductibles Businesses can design their HRA to require that employees pay out- of-pocket for medical expenses (up to the deductible amount) before having access to their HRA allowance.
  • 14. Plan Design Feature #4 - Coinsurance Coinsurance can be applied to the whole HRA plan, or to specific categories of expenses.
  • 15. Plan Design Feature #5 - Expense Specific Exclusions Businesses can design their HRA to have specific exclusions or requirements based on the type of health care expense.
  • 16. Plan Design Feature #6 - Expense Specific Annual Limits Businesses can design their HRA to limit the amount reimbursed for certain categories of health care expenses
  • 17. Plan Design Feature #7 - Expense Specific CoinsuranceOverrides Businesses can choose to override the coinsurance for a specific category of expense.
  • 18. Plan Design Feature #8 - Expense Specific DeductibleOverrides Businesses can choose to override the deductible for certain categories of expensed
  • 19. Plan Design Feature #9 - Expense Specific First DollarCoverage Businesses can design their HRA to provide first dollar coverage before an HRA deductible sets in
  • 20. Plan Design Feature #10 - EOB-only Override Restrictions A business can design their HRA to reimburse for medical expenses only covered under an employees health insurance plan
  • 21. Summary - How to Design a Custom Defined ContributionSolution Businesses Determine How to Structure and Offer an HRA to Employees With an HRA, the businesses: ● Determine employee eligibility ● Set employee allowances ● Enable cost-sharing rules ● Decide on rollover cap ● Apply expense restrictions ● Launch the plan ● Enroll employees
  • 22. 2014 Reform and the Future of U.S. HealthInsurance
  • 23. Individual Health Insurance Tax Subsidies ● Who is eligible for premium tax subsidies? ○ Households with income between 100% and 400% of Federal Poverty Line (FPL) ● Where are the premiums tax subsidies available? ○ ONLY available on individual health insurance market ○ ONLY available on exchanges If businesses DO NOT offer qualified, affordable group health coverage their employees may qualify for federal subsidies FAMILY OF 4 Examples: Gov’t Premium Income Actual Family Cost Total Premium Subsidy $20,000 $0 (Medicaid) Medicaid Medicaid $40,000 $1,982 (5%) $12,130 $10,148 $80,000 $7,600 (9.5%) $12,130 $4,530
  • 24. Key Tax Issues and Potential Penalties for EmployersThe Key Employer Tax Issues Include: ● Employer Mandate ○ Business may be required to provide "qualified, affordable" coverage to employees ○ Based on Full Time Equivalent Employees ● Employer Tax Penalty for Not Offering "Qualified" Group Health ○ Not applicable for employers with less than 50 FTEs ○ $2,000 penalty per FTE (minus 30 FTE credit)**** ● Employer Tax Penalty for Offering "Qualified" That is Not "Affordable" ○ Not applicable for employers with less than 50 FTEs ○ $3000 per employee receiving subsidy ● Businesses Subject to the Mandate will need to determine if: ○ Cost of group health insurance > cost of HRA + penalties ● Federal Subsidies are ONLY AVAILABLE for Individual Health Insurance
  • 25. Defined Contribution and Health Insurance Exchanges
  • 26. HRAs and the Employer MandateHealth Insurance Exchanges Effective January 1st, 2014 ○ ACA requires every state to create health insurance exchanges for businesses, employees and individual. ○ If a state fails to set up the exchanges in time, the federal government will step in. ○ Small businesses can only access the small business healthcare tax credits through the public SHOP exchangeHRAs Do Not Qualify as "eligible employer-sponsored plan" ... ● An HRA will not exempt an applicable business from penalties ○ Cost of group health insurance > cost of HRA + penalties ● Federal Subsidies are ONLY AVAILABLE for Individual Health Insurance
  • 27. Tax-Free Reimbursement of Exchange PoliciesHRAs may reimburse non-subsidized portion of individual premium ● Special Rule for Section 125 Plans: Exchanged-based policies not eligible ● Benefits of HRAs for Employees ○ May be receiving federal subsidies for health insurance purchase ○ HRA reimbursement could result in no out of pocket insurance costs ● Benefits of HRAs for Employers ○ Recruiting and retention ○ Tax-deductions ○ No group health administration
  • 28. HRAs and Health ReformsThe following ACA (federal health reform) pieces apply to HRAs in certain cases: ● Dependent Coverage for Adult Children up to Age 26 ● Coverage of Preventative Care Without Cost-Sharing ● Annual and Lifetime Limit Rules ● Over-the-Counter Medicines and Drugs Require Prescription ● Form 720: Fees to Fund Research on Patient-Centered Outcomes ● Summary of Benefits and Coverage (SBC) ● 60-day Material Modifications ● Form W-2 Reporting of Employer-Sponsored Health Coverage ● Internal and External Claims and Appeals Processes for Health Claims
  • 29. Summary
  • 30. Webinar Summary - Q&A 1. An HRA is "purest" form of Defined Contribution Plan. 2. Plan design options allow businesses to fully customize the Defined Contribution Plan. 3. Health reform favors the individual (exchanged- based) health insurance market. 4. Under existing regulations, HRAs may reimburse non-subsidized portion of exchange policies
  • 31. The ZaneHRA Software provides a 100% paperless administration experience to employers and insuranceprofessionals that want to offer better health benefits without a traditional group health insurance plan at lower costs.For more information about ZaneHRA, check out our Software.Employers use ZaneHRA to open and manage their own stand-alone HRA or defined contribution health plancompletely online, electronically enroll participants and print welcome kits, and monitor expenses andreimbursements in real-time.Employees obtain their own individual health policies from a designated health insurance broker (see below),submit premium and medical expenses online, via fax, or mail, and receive same-day reimbursement via check,payroll addition, or direct deposit. Zane Benefits does not sell health insurance.Insurance Professionals partner with Zane Benefits and use ZaneHRA to provide clients with a cost-savinghealth benefits option. Insurance brokers earn compensation on ZaneHRA referrals and retain 100% of the healthinsurance compensation from carriers. ZaneHRA is distributed by leading health insurance carriers, agencies,brokers, and accountants. DISCLAIMER The information provided herein by Zane Benefits is general in nature and For additional resources on should not be relied on for commercial decisions without conducting Health Care Reform, visit independent review and analysis and discussing alternatives with legal, accounting, and insurance advisors. Furthermore, health insurance www.zanebenefits.com/blog regulations differ in each state; information provided does not apply to any specific U.S. state except where noted. See a licensed agent for detailed information on your state. www.ZaneBenefits.com