The End of Employer-Provided Health Insurance: Why It's Good for You and Your Company

Chapter 14How to Conduct a Defined Contribution Financial Analysis

The cost of a defined contribution program is entirely in your company's control, and depends on two factors:

1. The total amount of allowances you are giving employees on a monthly (or annual) basis.
2. The total amount of shared responsibility payments you are required to pay on a monthly (or annual) basis if you have more than 50 full-time employees, starting in 2015 or 2016.

Before you switch to defined contribution healthcare, you should ensure it is the best financial decision for your company. (See Figure 14.1.) In this chapter, we will walk through how to conduct a defined contribution financial analysis.

Tip: The implementation of the employer shared responsibility payments has been delayed twice while writing this book—so check out government websites or www.healthinsurancerevolution.org for the latest information before conducting your analysis. Currently, it is delayed until 2015 for employers with 100 or more employees and to 2016 for employers with between 50 and 99 employees.

Save employees and employers a combined 50% on health insurance costs. Allow employees a full choice of health insurance plans. Provide employees with better, more flexible health insurance options.

Figure 14.1 Three Reasons to Switch to Defined Contribution

Name	Age	Zip	Family Size	Household Income