Health Reimbursement Acct

Check out the HRA advantages for your and your employees!

HRA's enable you to use tax deductible dollars to reimburse your employees for qualified medical expenses.  HRA funding can come from the premium savings realized in moving from an expensive, benefit rich, low deductible health insurance plan to a low cost high deductible plan.  Your HRA contributions create a more attractive benefit package for employees who may object to a high deductible plan.

HRA Advantages for Employers

  • You do not need to pre fund the account
  • You retain ownership of the funds if the employee terminates
  • HRA's are available to any size group
  • HRA's can be introduced gradually through dual choice options

You Determine:

  • The amount you will contribute to the HRA
  • Who will pay health care expenses first - you through your HRA contribution or employees
  • The amount that can be rolled over to the next year
  • What happens to unused funds when an employee leaves
  • The time table for making your contributions
  • Whether to place a cap on the amount which can be accumulated over time
  • The number of HRA plans to be offered - you can have different plan designs for different classes of employees

HRA Advantages for Employees

  • An HRA is totally employer funded and can provide first dollar benefits depending on HRA plan design
  • Funds remaining at the end of the year can be carried over year to year
  • Employees can be reimbursed for a wide range of medical expenses - including dental, vision, and even employee portions of medical premiums paid with after tax dollars.
  • Remaining funds at time of termination can be used to purchase COBRA coverage.

Cost Savings Example

ABC Company has 40 employees total     (20 singles, 20 families)

Current Health Plan and No HRA

  • Health Plan with a $500 deductible
  • 90/70 Coinsurance
  • Annual out of pocket expense is $1,500

High deductible with HRA plan

  • Health plan with a $2,000 deductible
  • 100% coinsurance after deductible
  • Annual out of pocket expense is $2,000
  • $1,000 funding to HRA for Single Coverage
  • $2,000 funding to HRA for Family Coverage
  Current Plan PPO $2,000 Deductible (if 50% of the HRA is spent
Annual Premium $240,699.60 $163,968.80
Assumes 50% of HRA allocation is spent $0 $30,000.00
Total Annual Cost $240,699.60 $193,968.80
Annual Savings N/A $46,730.80

 

 

 

 

 

 

In some cases we can establish an HRA using your current insurance carrier.  Call or e-mail us for additional information.

1-800-435-6299          fsmith@biu-inc.com