What is a Health Reimbursement Arrangement (HRA)?

Get Relief from Rising Health Care Costs

With health care premiums continuing to rise, many employers have been forced to reduce benefits, shift the cost to their employees or drop coverage entirely. PrimePay has an answer that provides employers and employees with tax savings as well as savings on insurance premiums. It's a Health Reimbursement Arrangement (HRA). Typically offered as part of a consumer driven health plan (CDHP), HRAs are quickly becoming the solution to rising health care costs.

Sometimes called defined benefit, personal care accounts, or health care accounts, Health Reimbursement Arrangements allow an employer-funded account to repay unreimbursed medical expenses of employees. Employers don't have to pre-fund the entire HRA account. They can simply reimburse employees as they submit claims. Therefore, the less employees spend on health care expenses, the more the employer saves.

Find Out How to Spend Less on Health Care Costs with an HRA

A Section 105 HRA account may reimburse any or all the same expenses as a Section 125 Flexible Spending Account (FSA). Like an FSA, reimbursements of qualified health care expenses are tax-free for an HRA. A health care reimbursement account gives the employer the flexibility to design their own benefit plan and control what expenses they will reimburse. This plan can be used in conjunction with or instead of a traditionally insured group medical plan.

Structure Your HRA to Include a Variety of Tax-Free Benefits:

• Qualified medical/health care expenses for employees and their families
• Individual health plan premium reimbursement programs
• Insurance deductible replacement programs
• Single expense reimbursement programs for dental and/or vision plans

Unlike a Flexible Spending Account, where the IRS requires the annual election to be available on the first day of the plan year, employers can decide when employees are reimbursed for their HRA expenses. HRA funds can be made available on the 1st day of the plan year or prorated on a monthly or quarterly basis.

With an HRA Account, Employers Determine:

• Who will pay health care expenses first... employees or the employer
• The maximum amount of annual reimbursements (if a maximum amount applies)
• If HRA funds can be rolled over to the next year, and if so, the amount that can be rolled over
• Whether to place a limit on the amount that can be accumulated over time
• If they want to offer their employees a debit card to pay for eligible HRA expenses

Ask PrimePay if a Health Care Account is Right For Your Business