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May 1 9.30am rick lindquist
May 1 9.30am rick lindquist
May 1 9.30am rick lindquist
May 1 9.30am rick lindquist
May 1 9.30am rick lindquist
May 1 9.30am rick lindquist
May 1 9.30am rick lindquist
May 1 9.30am rick lindquist
May 1 9.30am rick lindquist
May 1 9.30am rick lindquist
May 1 9.30am rick lindquist
May 1 9.30am rick lindquist
May 1 9.30am rick lindquist
May 1 9.30am rick lindquist
May 1 9.30am rick lindquist
May 1 9.30am rick lindquist
May 1 9.30am rick lindquist
May 1 9.30am rick lindquist
May 1 9.30am rick lindquist
May 1 9.30am rick lindquist
May 1 9.30am rick lindquist
May 1 9.30am rick lindquist
May 1 9.30am rick lindquist
May 1 9.30am rick lindquist
May 1 9.30am rick lindquist
May 1 9.30am rick lindquist
May 1 9.30am rick lindquist
May 1 9.30am rick lindquist
May 1 9.30am rick lindquist
May 1 9.30am rick lindquist
May 1 9.30am rick lindquist
May 1 9.30am rick lindquist
May 1 9.30am rick lindquist
May 1 9.30am rick lindquist
May 1 9.30am rick lindquist
May 1 9.30am rick lindquist
May 1 9.30am rick lindquist
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May 1 9.30am rick lindquist

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  • 1. Defined Contribution andIndividual Health Insurance:The Next Benefits TrendRick Lindquist, President
  • 2. Zane Benefits is the online alternative to group health insuranceThe 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. Formore information about ZaneHRA, check out our Software.Employersuse ZaneHRA to open and manage their own stand-alone HRA or defined contribution health plan completelyonline, electronically enroll participants and print welcome kits, and monitor expenses and reimbursements in real-time.Employeesobtain their own individual health policies from a designated health insurance broker (see below), submitpremium and medical expenses online, via fax, or mail, and receive same-day reimbursement via check, payroll addition, ordirect deposit. Zane Benefits does not sell health insurance.Insurance Professionalspartner with Zane Benefits and use ZaneHRA to provide clients with a cost-saving healthbenefits option. Insurance brokers earn compensation on ZaneHRA referrals and retain 100% of the health insurancecompensation from carriers. ZaneHRA is distributed by leading health insurance carriers, agencies, brokers, and accountants.DISCLAIMERThe information provided herein by Zane Benefits is general in nature and should not be relied on for commercialdecisions without conducting independent review and analysis and discussing alternatives with legal, accounting,and insurance advisors. Furthermore, health insurance regulations differ in each state; information provided doesnot apply to any specific U.S. state except where noted. See a licensed agent for detailed information on yourstate. www.ZaneBenefits.comFor additional resources onHealth Care Reform, visitwww.zanebenefits.com/blog
  • 3. Agenda1. The Core Problem with Group Health Insurance2. The Solution - "PURE Defined Contribution Healthcare“3. What is PURE Defined Contribution?4. What is the Health Insurance Marketplace?5. Pros and Cons for Employers and Employees6. Opportunities for Health Insurance ProfessionalsDOWNLOAD RECORDING & SLIDES AT: HRA.CC/bs-2013
  • 4. The Core Problem with Group Health Insurance
  • 5. Group Health Insurance Costs Too Much!To understand solution,we must answer the question:Why do employers offerhealth insurance?
  • 6. Whats the Solution?Why does employer offer health insurance?...Recruiting and Retention:1. It is tax deductible to the business2. Employees get the benefit 100% tax-free3. It is guaranteed-issue for sick employees(i.e. Moral Obligation)So.... the solution must provide 1, 2 & 3and reduce or fix the employers cost
  • 7. The Solution - PURE Defined Contribution Healthcare
  • 8. The Solution is "PURE Defined Contribution"Employer should:1. Cancel the group health insurance plan2. Define a budget and create a definedcontribution plan3. Select an insurance professional to helpemployees "navigate" the Health InsuranceMarketplace (optional)4. Reimburse employees for out-of-pocketmedical/premium expenses
  • 9. What is PURE Defined Contribution?
  • 10. "PURE Defined Contribution" is a Stand-Alone HRA• Stand-alone HRA is "purest" formof Defined Contribution.• HRA stands for “healthreimbursement arrangement.”• Its an “arrangement” for tax-freemedical expense reimbursement.• HRAs function like businessexpense accounts.HRAs are NOT health insurance
  • 11. HRA Compliance Requirements1. HIPAA: Employee medical privacy law2. ERISA: Federal law3. IRS: Section 1054. PPACA: Health reformAn HRA is an employer-sponsored, self-fundedhealth plan governed by:Need Compliant HRA Administration Software
  • 12. HRA Software Overview - Simple1. Determines contributions2. Sets eligibility3. Picks start dateThe Employees....4. Enrolls employees9. Reimburses employees for "expenses"The Employer...6. Purchase individual policies7. Submit "expenses" for reimbursement5. Sends welcome kitsLike AutoInsuranceHRA Claims Processing...8. Adjudicates employees "expenses"Like BusinessExpenseReimbursements
  • 13. Defined Contribution + Health Insurance MarketplaceLink to HealthInsuranceMarketplace
  • 14. How Defined Contribution Addresses ProblemWhy does employer offer health insurance?...Recruiting and Retention:1. It is tax deductible to the business2. Employees get the benefit 100% tax-free3. It is guaranteed-issue for sick employees(i.e. Moral Obligation)Defined Contribution addresses #1 and #2+Health Insurance Marketplace addresses #3
  • 15. What is the Health Insurance Marketplace?
  • 16. What is the Individual Health Insurance Marketplace?Earlier this year, the government re-branded health insurance exchanges as Health InsuranceMarketplaces.The Individual Health Insurance Marketplace is the ACAs health insurance exchange("AHBE") for individuals, which provides:1. Individual Plan Standardization (standardizes individual health insurance productswithin specific metal tiers)2. "Unbiased" Individual Plan Comparison (allows individuals to compare all plans in one"unbiased" place)3. Tax Credit Administration (determines tax credit eligibility/amount and facilitatesadvanced payment)"Helping individuals compare standard individual health insurance options"
  • 17. Understanding How the Health Insurance Marketplace WorksStep 1: Individual goes to his or her states Individual Health Insurance Marketplace website(e.g. www.coveredca.com).Step 2: Individual completes 1 of 2 applications:1. Application for Insurance with Tax Credit (e.g. sample).2. Application for Insurance without Tax Credit (e.g. sample).Step 3: Individual health insurance marketplace displays all available plan options withinmetallic tiers and displayed cost will factor in tax credit.Step 4: Individual selects plan.Step 5: Individual health insurance marketplace bills individual for his or her portion of premium(i.e. the total premium minus tax credit) and forwards payment to the carrier.
  • 18. Advantages of the Individual Health Insurance MarketplaceThe Individual Health Insurance Marketplace will have thefollowing 4 key advantages:1. Choice2. Portability3. One Stop Shop / Convenience4. Tax Credits
  • 19. #1 ChoiceIndividuals will be able to choose the health insurance plan that best fits their families needsbased on standard metallic levels:Within each metallic level, individuals will be able to choose different combinations of:• co-pays• deductibles• co-insurance• networks
  • 20. #2 PortabilityIndividual health insurance is not tied to employment, meaning they will be able to take theirhealth insurance with them when they switch jobs.This is a major advantage over traditional employer-sponsored health insurance.Portable Memory Analogy
  • 21. #3 One Stop Shop / ConvenienceOne Website and One Application gets individual access to:• All available plan options• Premium tax creditsBest of all, it will be "unbiased" (unlike sites like ehealthinsurance.com).
  • 22. #4 Tax CreditsSPECIAL INCENTIVE:Massive tax credits* will be available forhouseholds earning up to 400% of the FPL(majority of Americans).Individuals can only access the premium taxcredits through the INDIVIDUAL health insurancemarketplace.(*Requires Employer to Drop Coverage)
  • 23. Household Income & Size are Key Variables for IndividualsTax credit calculator coming soon athttp://navigator.zanebenefits.comHousehold Size 100% of FPL 400% of FPL Premium Cap Range1 $11,490 $45,960 $0 - $363.85 / mo2 $15,510 $62,040 $0 - $491.15 / mo3 $19,530 $78,120 $0 - $618.45 / mo4 $23,550 $94,200 $0 - $745.75 / mo5 $27,570 $110,280 $0 - $873.05 / mo6 $31,590 $126,360 $0 - $1,000.35 / mo7 $35,610 $142,440 $0 - $1,127.65 / mo8 $39,630 $158,520 $0 - $1,254.95 / mo2013 FPL GuidelinesAverage Group SinglePremium in 2011 was:$435.17Average Employee +1Premium in 2011 was:$860.75Average Group Family of 4Premium in 2011 was:$1251.83
  • 24. Individual Health Insurance Costs in 2014Actual individual healthinsurance premiums are TBD.BUT, you can estimate yourcosts using a tax creditcalculator.For example, see CoverCalifornia Cost Estimator
  • 25. Accessing the Individual Health Insurance MarketplaceYou can only access coverage during designated Enrollment Periods• Initial Enrollment Period, October 1st, 2013 - March 31st, 2014• Annual Enrollment Periods, October 15th - December 7th• Special Enrollment Periods, similar to cafeteria plan rulesWhy Enrollment Periods?Annual enrollment periods ensure that individuals and families don’twait until they get sick to enroll in coverage.
  • 26. Pros and Cons for Employers and Employees
  • 27. Pros and Cons for EmployersPROS:1. Recruiting and Retention - tax-free healthbenefits remains intact via HRA2. Flexibility - full control over HRAdesign/cost of benefits3. Savings - individual health plans (with taxcredits) < group health insurance4. Time - employer is out of health insurancebusinessCONS:1. Change - its hard2. Employee perception - itmight be negative
  • 28. Pros and Cons for EmployeesPROS:1. Choice - any plan, any carrier, anydeductible, any coverage options2. Portability - secure coverage regardless ofemployment status3. Tax Credit Eligibility - eligible for tax credit4. Savings - individual health plans (with taxcredits) < group health insuranceCONS:1. Change - its hard2. New Responsibility -increased initial timeinvestment
  • 29. Opportunities for Health Insurance Professionals
  • 30. The Benefits Shift - B2B to B2CHealthcare is shifting from a business-to-business (B2B) to abusiness-to-consumer (B2C) marketplace.PURE Defined Contribution expedites this shift.Are you prepared to help employeeschoose an individual health plan?If not, you may miss the opportunity...
  • 31. How Brokers Benefit from Defined Contribution1. Purchase individual policies• Relationship with employer and employeeso Two Sales - 1) Employer and 2) Employee• Employer = lead generatoro Average annual turnover = 50% for smallbusinesses• New role - help employees choose vs sello Like investment advisor helps employeechoose best 401(k) investmentsHUGEOpportunity
  • 32. Whats in it for the Broker?1. Recurring compensation on defined contribution administration fees(need partner)2. One-time and/or recurring compensation on individual policy sales3. Up/Cross-selling opportunity for voluntary/auto/life/etc4. Loyal employer client that turns over 50% of employees (on average)annually5. Ability to charge employers one-time and/or recurring consulting fees(flat fee per employer or pepm) for "Employee Services"
  • 33. How Do I Seize The Opportunity?In order to seize the opportunity, brokers need to:1) Create Efficient Individual Sales Process• Expertise of Individual Marketplace• Quote Engine2) Find Defined Contribution Partner:• Sales / On-boarding / On-going Support• Branding / Welcome Packet Customization• Insurance / Quote Engine Integration
  • 34. Summary / Next Steps
  • 35. Summary/Next StepsSummary• The core problem is that group health insurance costs too much.• The ideal solution must provide tax preference, guaranteed issue and costsavings.• PURE Defined Contribution provides tax preference. Individual HealthInsurance Marketplace provides guaranteed issue and savings.• Healthcare is shifting from a business-to-business (B2B) to a business-to-consumer (B2C) marketplace.Next Steps1. Create Efficient Individual Sales Process.2. Find Defined Contribution Partner.DOWNLOAD RECORDING & SLIDES AT: HRA.CC/bs-2013
  • 36. Zane Benefits is the online alternative to group health insuranceThe 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. Formore information about ZaneHRA, check out our Software.Employersuse ZaneHRA to open and manage their own stand-alone HRA or defined contribution health plan completelyonline, electronically enroll participants and print welcome kits, and monitor expenses and reimbursements in real-time.Employeesobtain their own individual health policies from a designated health insurance broker (see below), submitpremium and medical expenses online, via fax, or mail, and receive same-day reimbursement via check, payroll addition, ordirect deposit. Zane Benefits does not sell health insurance.Insurance Professionalspartner with Zane Benefits and use ZaneHRA to provide clients with a cost-saving healthbenefits option. Insurance brokers earn compensation on ZaneHRA referrals and retain 100% of the health insurancecompensation from carriers. ZaneHRA is distributed by leading health insurance carriers, agencies, brokers, and accountants.DISCLAIMERThe information provided herein by Zane Benefits is general in nature and should not be relied on forcommercial decisions without conducting independent review and analysis and discussing alternatives withlegal, accounting, and insurance advisors. Furthermore, health insurance regulations differ in each state;information provided does not apply to any specific U.S. state except where noted. See a licensed agent fordetailed information on your state. www.ZaneBenefits.comFor additional resources onHealth Care Reform, visitwww.zanebenefits.com/blog

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