Health Reimbursement Arrangement

Set aside pre-tax dollars for eligible employee expenses.

A Health Reimbursement Arrangement (HRA), is an employer-funded, tax-advantaged employer benefit plan. The employer sets aside a specific amount of pre-tax dollars for employees to pay for out-of-pocket healthcare expenses. Under the Affordable Care Act (ACA), employers can offer their active or retired employees a HRA benefit, also known as Health Reimbursement Account. HRA is typically paired with a High Deductible Group Health (HDGH) plan.

BenefitHelp Solutions. Health Reimbursement Accounts for Members.

Why choose an HRA?

Key features

  • The employer makes a contribution into the Health Reimbursement Arrangement (HRA) for each eligible employee: for example, $600 annually with a $1,000 deductible plan.
  • HRA funds can be used for IRS-approved expenses as determined by the employer 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: For example, another insurance plan.
  • HRA funds may roll over from year to year, depending on the employer.
  • If an employee terminates employment, 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. This is in accordance with COBRA provisions.
  • An employee has the right to continue paying monthly HRA contribution, including administration fee to BenefitHelp Solutions, in order to access funds. This is also in accordance with COBRA provisions.

Benefits to the employer

  • 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

Employee benefits

  • 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) as determined by the employer. Examples of allowable expenses may include: alternative treatment (e.g., chiropractic, naturopathic), laser eye surgery, fertility drugs, hearing aids and batteries, weight loss program to treat obesity, and other benefits.
  • Unspent funds in the HRA may roll over each year and accumulate while an 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).

Which HRA services are provided?

  • Communication Materials and Open Enrollment Meetings
  • Model Plan Document and Model Summary Plan Description
  • Process claims to employees within 2-3 business days of receiving a claim. Claims are paid by check or direct deposit into checking or savings account.
  • Customer Service available Monday - Friday from 7:30 a.m. to 5:30 p.m. PST
  • Annual Reconciliation
  • Annual Non-Discrimination Testing, as required
  • Coordination with COBRA administration services, including providing Certificates of Creditable Coverage, if purchased from BenefitHelp Solutions

Plan design options

  • The employer determines amount and frequency (quarterly or annually) of the contribution to the HRA.
  • Contributions to an HRA must be made with employer funds; the employer determines the amount available to employees.
  • Under a retiree-only HRA or Qualified Small Employer HRA (QSEHRA), funds can be used to pay for health insurance premiums and to purchase qualified long-term care plans.
  • 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 a HRAin addition to a FSA program, which includes employee contributions, in addition to HRA. Claims will be paid from FSA funds prior to pulling from the HRA account.

More information

  • Self-employed individuals, partners, and 2 percent owners of an S-Corporation are not eligible to participate in the plan
  • It’s recommended  HRA reimbursements be paid directly from general assets of the employer in order to ensure that it’s considered an unfounded liability per ERISA
  • We will reimburse claims to employees after funds are received from the employer (allow 2-3 business days for processing). HRA maximum amount is not available to the employee for claims reimbursement until funds are available in the HRA, unlike FSA Health accounts.

Contact us

To receive more information about our services, contact your agent or BenefitHelp Solutions marketing representative by email or phone, 503-412-4210 or 888-387-5440. For specific account information, please contact a Customer Service representative at 503-219-3679 or 888-398-8057.

Resources

Didn’t find what you were looking for? Check our Resources page for additional information.

....