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Small Business Employee Benefits and HR Blog

The Online Alternative to Group Health Insurance - Lower Prices

Zane Benefits, Inc. provides an online alternative to group health benefits that saves employers up to 50% annually. With Zane Benefits’ online platform, employers make available a tax-free monthly allowance that employees use to purchase their own individual policy directly from a carrier or independent licensed health insurance agent. online health benefits resized 600

As group health insurance costs continue to rise, employers are looking for ways to offer health benefits at a lower price. Zane Benefits’ online alternative, often referred to as a defined contribution health plan, allows an employer to name its price. Rather than paying the costs to provide a specific group health plan (a "defined benefit"), employers instead fix their costs by establishing a monthly dollar amount (a “defined contribution”) that employees choose how to spend.

Professor Paul Zane Pilzer, author of The New Health Insurance Solution, expects health care reform to accelerate the switch to defined contribution health plans. “What most business people don't realize is that the 2010 federal health care reform has standardized most health benefit plans—all U.S. individual policies now have no lifetime limits on coverage, pay 100% of the cost of preventive care, cover adult children up to age 27, and now guarantee coverage to dependents under age 18 with no extra charges for pre-existing conditions.”

The premium rates for individual plans are regulated differently in most states, and, unlike group plans, private carriers are allowed to reject high-risk employees with pre-existing medical conditions. However, new regulations require states to provide guaranteed coverage for employees with medical conditions that were formerly covered by a terminated group plan. Additionally, a new temporary federal risk pool, PCIP, has been created for the individuals who do not qualify for individual plans in their state. 

Businesses typically buy group health benefits on an annual cycle and spend tremendous amounts of time each year evaluating the features of the various plans offered—time that should be spent on improving products or servicing customers. According to Pilzer, “this annual use of senior management time is eliminated for the thousands of businesses each year that switch to Zane Benefits’ online solution.”

“As health care reform phases in, almost every employer should simply drop its group plan and allow employees to use pre-tax funds to buy their own, lower-priced individual policies. This is especially true in the small employer group market”, says Pilzer, “where several insurance companies have strategically chosen to exit the small group market and increase sales in the individual market.”

Click here to read the full press release. 

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