A Health Reimbursement Arrangement (HRA) is an Employer Funded plan whereby the employer promises to reimburse certain eligible medical expenses not covered by a major medical plan.
A Health Reimbursement Arrangement can be designed to reimburse a variety of expenses including any out-of-pocket medical expense that meets the Internal Revenue Code Section 213 definition of medical care, such as co-pays, deductibles, and medical expenses that are not covered by your major medical plan. Otherwise unreimbursed dental and vision expenses can also be paid through an HRA.
The main reason to utilize a Health Reimbursement Arrangement is to allow you to select a less costly medical insurance plan while protecting your employees from paying for large out of pocket expense amounts. In addition, all employer contributions to the plan are 100% tax deductible.
HRA funds used to pay for eligible expenses for employees are done so on a pre-tax basis; therefore, the funds are not taxable to the employee. There is no need to claim income tax deductions for any expenses reimbursed under the HRA.
In order for employees to participate in a Health Reimbursement Arrangement, which reimburses medical expenses, employees must be a participant in a group medical insurance plan. Plans which cover other than medical expense amounts can cover all employees.
We administer HRAs with many different plan designs allowing employers the flexibility to meet the unique needs of the company and employees. Some designs allow for the use of our debit card, whereas others require manual claims to be submitted for reimbursement. Where manual reimbursement is required, employees can receive a check or a direct deposit to his or her bank account.
Some of the plan designs that we administer reimburse the following:
For high deductible medical plans –
For other medical plans –
If you have questions, please give us a call or contact us online. We will be happy to assist you.
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Call us: (610) 853-9075