Health Reimbursement Arrangements (HRAs)
A Health Reimbursement Arrangement (HRA) is a federally approved, tax-favored program funded solely by employer to reimburse employees for medical expenses. Any size company can implement an HRA and save. The amount of savings depends on total company payroll and how much employees contribute towards their benefits. An employer's savings may be maximized with a high deductible plan. HRAs can be independent of a major medical plan.
HRAs enable employers
- Significantly reduce health insurance premiums
- Create tax deductions
- Improve cash flow
- Meet employee coverage needs
- Achieve company benefit goals
Flexibility of the employer
- Choose the maximum annual reimbursement amount for each employee.
- Decide who pays deductible expenses first - the employee or the employer through HRA reimbursements.
- An employer is not restricted to a particular type of plan if combined with a major medical plan.
- Return unused amounts at year end or elect to roll them over and make them available to employees in the following year.
- The employer can retain unused amounts should an employee leave the company.
- If the employee is retiring, the remaining balance can be used to pay for retiree's medical expenses.
- Choice to require an employee to participate in health insurance in order to receive the HRA.
- Choice to continue to reimburse a former employee for medical expenses after termination if the employer sets up the HRA to do so.
This is designed to provide information regarding Health Reimbursement Arrangements (HRAs) and how they can be used with high deductible plans. It is provided with the understanding that Assurant Health and its subsidiaries do not establish or administer HRAs and are not engaged in rendering tax or legal advice. Assurant Health disclaims any and all liability for creation or administration of HRAs. If tax or legal advice is required, seek the services of a professional advisor