Health Reimbursement Arrangements (HRAs)

A unique way to fund health costs while controlling increases in cost to the employer.

Encourages the employee to become actively involved in making and managing health care decisions for themselves.

What is an HRA?

• A reimbursement arrangement funded 100% by the employer
• Can reimburse out-of pocket medical expenses and health insurance premiums
• Can permit carryovers of unused monies
• Can permit retirees and terminated employees to spend down their accounts
• Can be offered in conjunction with a high deductible health insurance plan but not required
• Can be offered along side of cafeteria plan flexible spending accounts
• Limited HRAs may be offered along side of a health savings account
• HRA can not be funded through a cafeteria plan but a high deductible health plan can be funded through a cafeteria plan
• May not be used by self-employed individuals, partners, or more than 2% shareholders of an S corporation

Employer Designs the Plan

• Will rollovers be allowed?
• What may the carryover be used for?
• May funds be advanced or may employees only receive reimbursement up to the amount credited to the HRA at the time?
• If in conjunction with a flexible spending account under a cafeteria plan, which account must be used first?

HRA Administration by Health Plan Alternatives Includes:

1. Creation of Plan Document and Summary Plan Description
2. ACH (electronic banking transaction system)
3. Direct Deposit of employee reimbursements
4. Activity reporting
5. Discrimination Testing
6. Employee/Employer access to materials on website

Administration fees are based on the number of participants and the chosen design of the plan. We would be happy to answer any questions you may have.