Health Reimbursement Accounts

How HRAs work:

Once the HRA-compatible high-deductible health plan is established, the employer would cover all or part of the deductible by establishing and contributing to a tax-advantaged HRA for its employees. Once the deductible is met, a percentage of the network services are covered by the health plan if the insured seeks care within the designated network of doctors and hospitals. Some eligible medical expenses that are reimbursable to the employee include: doctor office visits, prescription drugs, routine physical exams, vision expenses, and dental expenses.

Employees are reimbursed with tax-free dollars from their HRA after they submit an eligible request for reimbursement, along with an Explanation of Benefits (EOB) offered by the health care provider. We will reimburse employees directly with checks being issued twice a month. Employees have a grace period after the plan year ends (determined by the employer) to submit claims for expenses incurred during this plan year.

Here is a quick summary of the pan details of an HRA:

		HRAs do not need to be pre-funded and are available to all business sizes.
		Only the employer can contribute to the HRA.
		Employees have access to the account and may be allowed to rollover any unspent funds for service in upcoming years.
		Employees receive reimbursements tax-free without hassle.
		HRAs offer complete flexibility with employee retirement or termination.

HRA Advantages:

Employers

		No need to pre-fund the account; funds are allocated.
		Retain ownership of the funds if an employee terminates (COBRA may be required).
		HRAs are available to any size group.
		HRAs can be introduced gradually through dual-choice options.
		Subsidize 100% of the reimbursement costs.
		Bundle FlexHRA with your current health plan.
		Retain funds at the end of the plan year.

Employees

		An HRA is employer-funded and can provide first-dollar benefits.
		Funds remaining at the end of the year can be carried over year-to-year.
		Utilize a streamlined reimbursement process.
		Receive reimbursement for various medical expenses.
		Remaining funds at time of termination can be used to purchase COBRA coverage.