Excerpts From a Wall Street Journal Article about Defined Contribution Health Plans
“Many small businesses have trouble providing health coverage because the costs of paying benefits for a handful of ailing employees drive up the premiums for their entire staffs. Now [Paul Zane Pilzer], relying on a wrinkle in U.S. tax law, thinks he has found a way around the problem. His idea: Employers should stop providing group health insurance and help employees get individual policies instead.“
“Employers set aside a certain sum every month, say $200, that employees can use for health expenses. The employer can write off the expense for tax purposes, just like traditional health benefits, and the money doesn't count as taxable income for the employee.”
“Paul Zane Pilzer, a 53-year-old economist, occasional rabbi and author of books like "God Wants You to Be Rich," isn't just concocting theories. His sales method has drawn interest from insurance giant UnitedHealth Group Inc. “
“UnitedHealth is encouraging hundreds of its independent agents to take an online course offered by Mr. Pilzer's Zane Benefits to learn how to market individual plans at companies with HRAs. Zane Benefits isn't an insurer. It earns about $10 a month per worker administering plans for companies. Workers typically buy insurance with their own money, then submit paperwork to Zane to get reimbursed with HRA money.”
“Mr. Pilzer is among a growing number of people -- politicians, policy makers and others -- scrambling to find alternatives to the U.S. system of employer-provided insurance. Some merely want to fix a system that leaves millions uninsured; others are looking for ways to profit from patching together the system.”
“None of the solutions so far is perfect, but Mr. Pilzer's is gaining traction. Critics say his plan doesn't take account of those people who can't get individual coverage because of previous or existing illnesses. Mr. Pilzer says they can get help from their state or other sources.“
“Helen Griffin, owner of IT Pros in Overland Park, Kan., was fed up with soaring premiums her insurer was demanding. The technology firm this year began offering a $100-a-month HRA allowance, plus an additional $200 a month for workers with a spouse and children. Ms. Griffin says all five of her full-time employees were able to find individual coverage. She and her husband paid a combined $330 a month for their policies, down from $800 a month paid by the company when the business had a group plan.”
“Sam's Club, the warehouse chain of Wal-Mart, has been selling HRA-based plans to small businesses since January 2006 in a tie-up with Extend Health Inc., a company started by Mr. Pilzer. Barnett Well Services LP in Cresson, Texas, joined the Sam's Club program in April 2006. The oil-industry trucking firm says group insurance was too expensive at $420 a month per employee. Instead, each of the 28 workers gets $100 a month of HRA money to put toward insurance premiums or, if they prefer, other medical expenses.”
Read the full article at http://online.wsj.com/article/SB118575682869181838.html
About Zane Benefits, Inc.
Zane Benefits, Inc. is a leading provider of Health Reimbursements Arrangements and Accounts (HRAs) and Defined Contribution Health Benefits
to U.S. employers and their employees. With Zane's HRA, employers open and manage their HRA completely online and manage reimbursements via their existing payroll system.
Zane Benefits does not sell health insurance. Its products and services are distributed in all 50 states by independent licensed agents and other distributors of health insurance who receive direct online and telephone access to help employees choose the best insurance policy.
Economist Paul Zane Pilzer is the founder of Zane Benefits, a former Vice President of Citibank and the founder of five companies. He is a former commentator on CNN and NPR and was an Adjunct Professor at New York University from 1979-2000. He holds a BA from Lehigh University and an MBA from The Wharton School, University of Pennsylvania.
Zane Benefits products and services are distributed in all 50 states by leading employers, consultants, agents, general agencies, payroll providers and PEOS.
Visit www.zaneaffiliates.com or more information on Zane Benefits programs for insurance agents.