The document analyzes data from over 2,000 employers using a defined contribution health benefits solution, finding that on average employers offer $426 per month allowance, while employees utilize $380 on average. Compared to traditional group health insurance, employers using a defined contribution solution save an average of 57% on health benefits costs. The defined contribution model is being adopted most by small employers with 1-49 employees across a variety of industries nationwide.

1. Employer-Funded
Individual Health Insurance
ANNUAL
REPORT
2016
© 2016 Zane Benefits, Inc.

2. This 2016 Annual Report is intended to provide a detailed, nationwide profile of how
employers and employees are using employer-funded individual health insurance as
an employee benefit today. The findings are based on a sample of 2,200 employers
and 10,500 participants using a Zane Benefits defined contribution health benefit
solution during the 2015 calendar year.
EXECUTIVE SUMMARY
KEY FINDINGS AND CONCLUSIONS
• Nationally, the average employer-funded health benefit
allowance offered by employers is $426 per month, per
employee. This average includes all states and family sizes.
• The average employee utilization amount of the employer-
provided health benefit allowance, among all states and
family sizes, is $380 per month, per employee (an 89%
utilization rate). As such, the actual employer contribution
toward health benefits averages $380 per month.
• Compared with offering traditional group health insurance
coverage, employers using a defined contribution solution
save an average of 57% on comparable, comprehensive
health benefits. This gives small business employers the
ability to afford and, in many cases, improve their employee
benefits offering.
1

3. TRENDS IN DEFINED CONTRIBUTION
USER PROFILE—WHO IS USING EMPLOYER-FUNDED INDIVIDUAL HEALTH
INSURANCE SOLUTIONS?
Defined contribution and individual health insurance solutions are being adopted by
firms nationwide as a preferred alternative to traditional employer health benefits.
This consumer-friendly solution is being explored by employers of all sizes, and
in all regions and industries. However, the Zane Benefits data identifies clear and
interesting trends.
• Employers using a defined contribution solution are predominately small
employers—those with 1-49 employees. The average number of eligible
employees enrolled is nine (9).
• The most prominent industries represented in the study are healthcare (16% of
employers), manufacturing (13%), non-profit organizations (11%), consulting firms
(8%), and construction (8%).
• Employers studied are spread out across the nation with 11% from the East,
21% from the Midwest, 38% from the South, and 30% from the West.
DEFINITIONS
Allowance: The real dollar benefit offered to employees, on a monthly or annual basis.
Amounts may vary by employee class or family size, as determined by the employer,
and represent a fixed, annual maximum liability.* If employees do not utilize their full
allowance during the plan year, unused funds stay with the employer.
Reimbursement: A real dollar amount distributed to the employee for approved and
substantiated healthcare expenses, including health insurance premiums.
Utilization Rate: The portion of an allowance used by employees during a given plan
year, expressed as a percentage of the total allowance. For example, if an employee
receives an allowance of $3,600 per year and her approved premium is $3,120 per year, the
utilization rate for this employee is $3,120 divided by $3,600, for a utilization rate of 87%.
*As required by law, reimbursement of certain preventive service expenses may not be limited by allowances.
2

4. EMPLOYER-FUNDED ALLOWANCES
With defined contribution health benefit plans, allowances are set by the employer,
so there are no minimum or maximum contribution requirements. This not only
allows employers to control costs, but gives them the ability to adjust allowances
according to the needs and expectations of each employee. Nationwide, the
average allowance offered to employees is currently $426 per month. Allowance
averages also vary by family status, region and state.
3
$500
$600
SINGLE
$290
Per Month
$367
Per Month
$463
Per Month
$581
Per Month
SINGLE + CHILDREN MARRIED MARRIED + CHILDREN
$400
$300
$200
$100
Average Employer Allowance by Family Size
$500
$600
MIDWEST
$415
Per Month
$441
Per Month
$383
Per Month
$407
Per Month
NORTHEAST SOUTH WEST
$400
$300
$200
$100
Average Employer Allowance By Region
Defined Contribution Employer Profile
1-49 Employees (average of 9)
Healthcare 16%
Manufacturing 13%
Non-Profit 11%
Consulting 8%
Construction 8%
East 11%
Midwest 21%
South 38%
West 30%
MAJOR INDUSTRY
REPRESENTATIONNATIONAL SAMPLE

5. Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisianna
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
$0
$0
$100
$100
$200
$200
$300
$300
$400
$400
$500
$500
$600
$600
$700
$700
$800
$800
Average Employer Allowance by State
4

6. UTILIZATION AND COST EFFICIENCY
Once established, an employer-provided allowance represents the maximum, annual
expense liability for the firm’s health benefit. However, the actual expense is based on
utilization of the allowances by participants.
For example, if an employee has an allowance of $400 per month and her approved
premium is $300 per month, she is reimbursed $300 per month (a 75% utilization
rate). Conversely, If the same employee has an allowance of $400 per month and
her approved premium is $450 per month, she is reimbursed $400 per month
(100% utilization rate). In the first example, the $100 unused dollars remain with the
company, reducing the overall cost for providing health benefits to this employee. In
the second example, the employee uses her entire allowance, and the remaining $50
is her monthly responsibility.
Nationally, the average approved amount (“reimbursement amount”) among
all states including all family sizes is $380­—an 89% utilization rate.
So, considering this average, an employer with ten employees has an annual
maximum expense of $400 x 10 employees x 12 months = $48,000. Application of
the 89% utilization rate predicts an actual annual expenditure of $380 x 10 employees
x 12 months = $45,600.
60% - 70% 70% - 80% 80% - 90% 90% - 100%
Allowance Utilization Rates by State
5
Employer Allowance Utilization Rate Comparison Among States

7. 6
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisianna
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
0%
0%
20%
20%
40%
40%
60%
60%
80%
80%
100%
100%
Employer Allowance Utilization Rate by State
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
70.1%
68.5%
86.8%
86.4%
79.6%
88.4%
91.1%
95.2%
96.2%
90.7%
99.2%
99.5%
99.4%
97.4%
82.7%
81.9%
88.5%
95.5%
95.3%
95.0%
98.3%
92.4%
92.6%
63.8%
75.4%

8. INDUSTRY
EMPLOYER
ALLOWANCE
REIMBURSEMENT
AMOUNT
UTILIZATION
Agriculture $471 $377 79.64%
Banking/Finance $539 $381 70.64%
Biotechnology $719 $295 41.01%
Business Services $556 $352 63.40%
Chemicals $224 $224 100.00%
Communications/Telecommunications $325 $325 100.00%
Construction $393 $393 100.00%
Consulting $549 $493 89.84%
CPA $428 $428 100.00%
Dental $347 $257 74.04%
Education $375 $346 92.13%
Energy $419 $419 100.00%
Engineering $602 $521 86.42%
Entertainment/Media $373 $369 99.13%
Environmental $399 $399 100.00%
Food & Beverage $396 $394 99.73%
Government $518 $440 84.88%
Healthcare $391 $350 89.40%
Hospitality $301 $301 100.00%
Insurance $517 $401 77.58%
Legal $483 $278 57.54%
Machinery $452 $370 81.86%
Manufacturing $357 $357 100.00%
Medical Services $824 $520 63.11%
Not For Profit $494 $387 78.27%
Other $440 $395 89.76%
Real Estate $370 $370 100.00%
Recreation $350 $350 100.00%
Retail $399 $356 89.31%
Technology/Software/Electronics $539 $521 96.56%
Transportation $354 $343 97.09%
Utilities $404 $486 100.00%
Utilization amounts also vary by industry. The chart below details average employer
allowance and reimbursement, by industry, in the United States.
7

9. Employers using a defined contribution health
benefits solution are realizing cost savings of
57%, on average, compared to average group
health insurance costs. This cost comparison is
based on the Kaiser/HRET 2015 Employer Benefits
Survey which concluded that employers pay an
average of $521 per month per single employee
and $1,462 per month per family for group
health insurance coverage.
The comparative value of a defined contribution
health benefits solution varies by employer and
by region. The following map provides a visual
comparison of average savings by state. The
data takes into consideration average employer-
funded reimbursement amounts by state as well
as average group health insurance costs by state
(Kaiser/HRET, 2015).
Defined Contribution vs. Group Health Insurance—Cost Savings By State
$2000 - $6000
$6000 - $10,000
$10,000 - $14,000
$14,000 - $18,000
0 - $2,000
DEFINED CONTRIBUTION
GROUP HEALTH INSURANCE
DEFINED CONTRIBUTION VS. GROUP HEALTH INSURANCE
8
Employer Annual Cost Comparison by State

10. Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisianna
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
$0
$0
$2000
$2000
$4000
$4000
$6000
$6000
$8000
$8000
$10,000
$10,000
$12,000
$12,000
$14,000
$14,000
$16,000
$16,000
Defined Contribution vs. Group Health Insurance—Cost Comparison
9
Defined Contribution
Plan average annual
cost for family
coverage
Group Health
Insurance Plan average
annual cost for family
coverage

11. Small business employers all over the nation are adopting and
implementing employer-funded, defined contribution health plans, as
an alternative to traditional group benefits. Defined contribution plans
offer significant value to employers and facilitate employee access to the
quality coverage and perks of the modern individual health insurance
market. Employers are realizing average savings of 57% using such
plans, when compared with the costs of offering traditional group health
insurance. This savings drastically improves the ability to afford and, in
many cases, enhance their employee benefits offering. Ultimately, this
improves the ability of the small business to recruit, retain, and compete
for skilled human resources.
METHODOLOGY
The data in this report was gathered from the current Zane Benefits
customer base, including information from all company sizes, and
only represents participants in defined contribution Health Insurance
Reimbursement Programs. The report analyzed a statistically valid set of
active employer accounts during the 2015 calendar year.
Averages for states and industries consider different sample sizes and
have been weighted accordingly. Approximately 7,900 participant records
contain industry information.
Individual states have been categorized by region according to the
practices followed by Census.gov.
CONCLUSION
10

12. 1.800.391.9209
www.zanebenefits.com
ABOUT ZANE BENEFITS
Zane Benefits levels the playing field for small businesses by delivering
employee benefits that maximize satisfaction, while keeping costs fixed
and predictable. This is accomplished by “consumerizing” each benefit, or
reorienting benefits to better meet the needs of employees—the consumers.
Unlike traditional employer-owned benefits, Zane Benefits solutions are
employer-funded, but employee-owned. This creates several time and cost
savings advantages for the small business, while providing employees with
better value than cash, and access to the unlimited product choices available
in public markets.
Because of the innovative nature of its solutions, software and service, Zane
Benefits has been featured on the front page of The Wall Street Journal, USA
Today, and the New York Times. The company was founded in 2006 on the
Silicon Slopes of Salt Lake City, Utah.
The information provided herein by Zane Benefits is general in nature and should not be relied on for commercial
decisions 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 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