Course 2 (2-3 Credit Hours)
Introduction to Employer Defined Contribution Health Benefits (HRAs)
by Professor Paul Zane Pilzer
Course Description
An introduction to how employers can now give each employee a fixed monthly tax-free allowance (i.e. Defined Contribution) to purchase their own health insurance, and how you can then help each employee obtain their own individual or family policy.
As a licensed Life and Health agent, you need to be able to explain HRAs (Health Reimbursement Arrangements) and Defined Contribution Health Benefits Plans to your employer and individual clients.
Employers utilize Defined Contribution Health Benefit Plans to reimburse employees tax-free for the premiums on their own individual or family health insurance policies. This allows healthy employees to purchase their own individual or family health policies for 1/2 the price of expensive group employer plans, and once in force the policy may not be cancelled nor may the premium be increased based on the individual’s claim history—premiums increase with general medical inflation and age of the insured.
If your client is among the 40 percent of employers who don’t offer group health insurance because it’s too expensive, they can now offer health benefits at the level they can afford, and at a fixed employer cost.
You will learn:
- The differences between a traditional employer sponsored defined benefits program and the new defined contribution program
- How to analyze what is the best situation for their business and their employees.