Health Reimbursement Arrangements
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.
Why Use Health Reimbursement Arrangements (HRA)
- Employer Cost Savings – 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.
- Plan Premium Savings
- 100% Tax Deductible
- Client Case Study: Company Z with 97 employees saved over $840,000 by switching from a $10 co-pay plan to a high deductible plan and reimbursing all of the out of pocket expenses that were incurred by their employees through a Health Reimbursement Arrangement.
- Tax Advantages for Employees – 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.
Health Reimbursement Arrangement (HRA) Participation
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 –
- The first portion of the deductible.
- The last portion of the deductible.
- The entire deductible.
- A percentage of out of pocket expenses.
For other medical plans –
- Certain co-pay amounts
- A portion of co-pay amounts.
How The Harrison Group helps you with your HRA (Health Reimbursement Arrangement)
- Customer Service is our FOCUS – Your employees will need to devote a little bit of time paying for these out of pocket expenses and/or submitting claims for their health reimbursement arrangements. Recent studies show that only 44% of employees fully comprehend their benefits. It is critical to select an HRA administrator who not only answers the phone, but also assists employees when they have questions. We offer considerable resources to provide both onsite and online education for your employees.
- A Partner with Proven Expertise – With over 30 years of experience in the industry, our clients have come to rely on us to partner with them and their health insurance broker to provide the necessary education and benefits plan consultation.
- Concierge Customization – One size does not fit all. We offer customized solutions to meet your specific objectives regardless of your size or demographics.
- Technological Advances – We offer the latest in industry-leading technology to our clients including a web and mobile application for accurate claims submission. We also offer online education for employers and their employees.
If you have questions, please give us a call or contact us online. We will be happy to assist you.