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SOURCE: Zane Benefits
Businesses can Self-Administer a Health Reimbursement Plan with Complaint Administration Software
Park City, Utah (PRWEB) January 30, 2013
Today, Zane Benefits, Inc. published new information on Section 105 health reimbursement plans. Zane Benefits, which provides comprehensive and flexible alternatives to traditional employer sponsored health benefits, is the leader in defined contribution and health reimbursement accounts.
According to Zane Benefits’ website, Section 105 of the IRS code allows small business owners to setup Health Reimbursement Plans (HRPs) to pay for healthcare expenses tax-free. With a Section 105 health reimbursement plan, an employer can reimburse an employee for healthcare and insurance expenses. These can be expenses incurred by the employee or his or her dependents, but they must be allowed under the plan document, which is created by the employer and outlines the expenses eligible for reimbursement.
Advantages of Section 105 Health Reimbursement Plans
According to Zane Benefits’ website, Section 105 health reimbursement plans offer several advantages to both the employer and the employees. The employees are given greater control over the health plan they choose, and the money used to reimburse them is not considered taxable income. Hence, employees can save 20-40% on health insurance when compared to paying with post-tax dollars, depending on how much he or she pays in taxes. In the same vein, employers deduct reimbursements as a business expense and exclude them from wages subject to FUTA (0.8%) and the employer portion of FICA (7.65%). Employers have enormous flexibility and control with 105 health reimbursement with regard to establishing maximum reimbursement amounts and setting eligibility requirements via the plan document.
How to Set Up a Section 105 Health Reimbursement Plan
According to Zane Benefits’ website, Section 105 health reimbursement plans are actually quite simple in practice:
1. The employer must establish a formal written Section 105 health reimbursement plan (See plan document requirements).
2. The employer determines the amounts available to each employee for reimbursements during a period of coverage (generally a year).
3. As eligible expenses are submitted, the employer reimburses the employees (100% tax-free) up to the available amounts.
4. Unused funds at the end of the year are typically carried over to the next year, but the employer can set those stipulations.
About Zane Benefits
Zane Benefits was founded in 2006 to provide a revolutionized SaaS (Software-as-a-Service) administration platform ("ZaneHRA") for Health Reimbursement Arrangement (HRAs) and defined contribution healthcare. The flagship software provides a 100% paperless administration experience to employers and insurance professionals that want to offer better health benefits without a traditional group health insurance plan at lower costs. For more information about ZaneHRA, visit http://www.zanebenefits.com.
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