Here is a brief video introduction to Defined Contribution Plans:
Defined Contribution Plans
Recruiting and retaining great employees is important to every company from major global corporations to the smallest small businesses. A company’s health benefit plan is a key part of the compensation they offer to their employees.
However, due to the rising costs of group health insurance, companies can no longer afford to offer traditional health insurance to their employees. Fortunately, defined contribution plans can provide an affordable alternative to traditional group health insurance.
The general concept of a defined contribution plan is that a company gives each employee a fixed dollar amount (a “defined contribution”) that the employees choose how to spend. Employees can use their defined contribution to pay for individual health insurance or other medical cost such as doctor visits and prescription drugs.
Rather than paying the costs to provide a specific group health plan benefit (a “defined benefit”), employers can fix their costs on a monthly basis by establishing a defined contribution plan.
