Health Reimbursement Arrangements reduce premium costs without reducing employee benefits.
A Health Reimbursement Arrangement (HRA) is an account based employee benefits plan funded 100% by employers. HRAs can be custom designed to reimburse medical expenses for employees using employer dollars on a pre-tax basis. Although an HRA can be implemented with any kind of health plan, employers usually pair it with a less expensive high-deductible health plan (HDHP), and turn around to use the savings in premiums for employees’ eligible medical expenses reimbursing them pre-tax. An HRA benefits employees by putting them in control of their health care dollars and paying lower health insurance premiums.
An HRA is both owned and funded by the employer and does not allow for employee contributions like the Flexible Spending Account (FSA) and Health Savings Account (HSA). The employer chooses:
- How much they are going to contribute to the HRA.
- What expenses are going to be eligible for reimbursement (within IRS guidelines).
- Whether they are going to allow unused balances to roll over to the following plan year and if so what percentage of the remaining balances will roll-over.
- If they will continue to allow participants that leave the firm on a voluntary basis to continue use of their HRA benefit.
THE BENEFITS OF OUR HRA:
- Unique Plan Design: We realize each employer’s HRA plan is going to be set up differently because of their participants needs. We are happy to work with employers and design a plan that is a mutually agreeable solution for everyone.
- Customer Support: Customer service representatives are available via phone or e-mail Monday – Friday 8:30 am – 5:30 pm EST.
- Technology: Admin America offers a mobile application and online portal that allow you to check your balance and view your account activity 24/7. Your online portal also has an “expense tracker” where you can store your receipts in one convenient place.
- One Debit Card for all FSA/HRA/HSA Plans: Admin America uses the same Debit Card for all of our FSA/HRA/HSA products. Participants who use more than one of the pre-tax accounts will have the ability to load all of their elections onto one Debit Card.
How does an HRA Work?
HRAs are fully owned and funded by the employer. Because the money contributed by your employer doesn’t count as income, there are no tax implications. It’s kind of like getting a raise. You can use the money in the HRA throughout the year for qualified medical expenses. Depending on your plan design, any leftover dollars may roll over from year-to-year (as long as you continue to be a member of the plan) or they may be forfeited. Check with your plan administrator or HR department for more information about your plan design.
Do I have to have health insurance to have an HRA?
HRAs are usually provided by employers to complement a higher-deductible health plan (HDHP), but can be paired with any type of health plan or offered alone.
What is an eligible health care expense?
Eligible expenses under an HRA plan are determined by your employer. Contact your human resources department or refer to the Summary Plan Description (SPD) for information about your HRA plan design and eligible expenses. Generally, the IRS allows the following expenses to be reimbursed from an HRA plan:
- Health insurance deductibles
- Co-insurance and copays
- Other expenses included in IRS Publication 502—Medical and Dental Expenses as eligible or qualified expenses
- Some insurance premiums
Eligible expenses must be incurred by the employee and/or eligible members of the employee’s family, and take place within the benefit plan year.
Who can I receive reimbursement for?
HRAs provide reimbursements for qualified medical expenses incurred by the employee, the employee’s spouse and qualified dependents as defined in the IRS Code Section 152.
Can I participate in an HRA and Health Savings Account (HSA) at the same time?
If your HRA is an unlimited HRA, you are not eligible to participate in a HSA plan. If your HRA is a limited purpose HRA, you can utilize both the HRA and HSA.
Can I have both an HRA and a Flexible Spending Account (FSA) at the same time?
Yes, your employer can offer either or both of these plans.
What if an expense is eligible for reimbursement under both my HRA and FSA?
This depends on your employer’s design for your plan. If you have both an HRA and a Health FSA, review your Summary Plan Description (SPD) to find out which account pays first. Your expense will be reimbursed by the plan that’s set up to pay first, and when the money for that account is depleted, funds from the other account will be used toward future eligible expenses. Expenses reimbursed under your HRA may not be reimbursed under any other plan or program, including your Health FSA – and vice versa. Your HRA and health FSA, while separate accounts, provide reimbursement of qualified medical expenses that are defined by your employer and the IRS. This means you can’t submit a claim for an eligible Health FSA expense and then request reimbursement for the same expense from your HRA. There’s no “double-dipping.”
What supporting documentation must I file with each Health HRA claim?
Each time a medical provider (i.e., doctor, hospital, etc.) submits claims to your health insurance carrier, you will receive an Explanation of Benefits (EOB) detailing what the health plan will pay and what you must pay. Admin America requires a copy of your Explanation of Benefits (EOB) along with a claim for reimbursement request form. Following the guidelines will ensure you receive your reimbursement without unnecessary delays.
If I terminate employment or retire can I be reimbursed for expenses incurred after my termination date?
Your plan participation will end automatically upon termination of employment. Expenses for services you have after your termination date typically are not eligible for reimbursement. Some HRA plans, however, do include a “spend-down” provision that allows HRA participants to submit eligible HRA expenses, incurred during a specific time frame, after termination. This assumes participants continue to meet all other requirements. The spend-down feature is not available for all plans; therefore refer to your Summary Plan Description for specific details related to your plan. You may be entitled to elect COBRA continuation coverage under the HRA and receive reimbursement for eligible HRA expenses incurred after your termination. You must be eligible and make the required COBRA premium payment.
You may click on the links below to access any of the documents. You may need Adobe Reader installed on your computer to open the documents below.
NEW PLAN IMPLEMENTATION: