Health Reimbursement Arrangement

The Employer makes a monthly Contribution into the Health Reimbursement Arrangement (HRA) for Each Employee: for example, $50 monthly contribution, or $600 annually with a $1,000 deductible plan.
HRA Funds can be used for IRS approved expenses as long as funds available in HRA were incurred by employee/dependent during period of HRA eligibility; Funds cannot be reimbursed by any other source, example: other insurance plan.
HRA Funds “roll-over” from year to year.
If employee terminates, HRA funds are no longer available. Funds are refunded to the Employer at the end of the year for any employee who terminates employment and does not choose continuation of the HRA, in accordance with COBRA provisions.
Employee has the right to continue paying monthly HRA contribution, including administration fee to BenefitHelp Solutions, in order to access funds in accordance with COBRA provisions.

Lower premiums for high deductible medical plan.
Any funds reimbursed from HRA are exempt from employer’s payroll taxes and Social Security taxes.
Encourages employees to use medical plan and HRA funds conservatively to ensure future available benefits and may dampen future medical trend and claims experience.
Employees become more aware of the real cost of medical care, which may also dampen future medical trend and claims experience.
The high deductible medical plan provides a financial incentive to encourage employees to adopt healthy lifestyles.

Lower premium high deductible medical plan provides lower monthly premium contributions for employees and family members.
Employees who typically do not use any medical benefits, and may not value benefit plans, will have access to HRA funds to pay for allowable “IRC 213” expenses (same as FSA allowable expenses). Examples of allowable expenses may include: Alternative treatment (chiropractic, naturopathic), Lasik eye surgery, fertility drugs, hearing aids and batteries, weight loss program to treat obesity, and other benefits.
Unspent funds in the HRA will rollover each year and accumulate while employee continues to work for the Employer. Funds will help offset any future catastrophic illness or injury, subject to any maximum as determined by the Employer and noted in the Summary Plan Description (SPD).

Communication Materials & Open Enrollment Meetings
Model Plan Document & Model Summary Plan Description
Collect HRA Contributions from the Employer & reconcile monthly with paid claims
Pay eligible claims to employees within one week of receiving funds from employer. Claims are paid by check or direct deposit into checking or savings account.
Customer Service available Monday through Friday from 8:00 am to 5:30 pm
Provide Monthly or Quarterly Reports, as requested
Annual Reconciliation
Annual Non-Discrimination Testing, as required
Coordination with COBRA administration services, including providing Certificates of Creditable Coverage, if purchased from BenefitHelp Solutions

The Employer determines amount and frequency (monthly or annual) of the contribution to the HRA.
The Employer determines maximum amount of funds in the HRA.
HRA funds could be used to pay health insurance premiums described in Code 213(d)1D, but it is critical that all contributions to HRA are made with employer funds. Can also be used to purchase qualified long-term care plans, but cannot reimburse long-term care expenses.
The Employer could choose to allow employees to keep HRA funds after termination, but this will increase the administrative cost of the plan and create additional financial liabilities.
The Employer could offer HRA, in addition to FSA program, which includes employee contributions, in addition to HRA. Claims will be paid from FSA funds prior to pulling from the HRA account.

Self-employed individuals, partners, 2% owners of an S-Corporation are not eligible.
Recommended that HRA reimbursements be paid directly from general assets of employer in order to ensure that it is considered an unfounded liability per ERISA.
BenefitHelp Solutions will reimburse claims to employees on a weekly basis after funds are received from the Employer. HRA maximum amount is not available to the employee for claims reimbursement until funds are available in the HRA, unlike FSA Health Accounts.