How it works.
- A high-deductible health insurance plan is coupled with an HRA set up by the employer.
- Using the HRA, the employer reimburses a portion of each employee's medical expenses usually by paying for part of the deductible.
- The premium savings realized with the high-deductible plan are often more than enough to completely fund the HRA reimbursements.
- HRAs are available to any employer regardless of the number of employees.
- HRAs do not require pre-funding.
- The employer maintains complete control over the HRA design.
- Expenses reimbursed by the employer are 100% tax deductible for the employer and tax free for the employee.
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