Health Reimbursement Arrangements (HRAs)
A Health Reimbursement Arrangement (HRA) allows you, the employer, to contribute tax-free money to an account that your employees can use to reimburse themselves for medical, dental and vision expenses that are either only partially covered or not covered at all by your insurance plans. However, unlike an FSA, unused HRA balances can be carried forward from year to year, depending on your company’s strategy. With an HRA, you may restrict reimbursements to certain expenses, such as prescription drug co-pays, vision, dental, or deductible expenses. You can also control the timing of deposits and access to the benefit funds after termination of employment.
Here at P&A, we have the experience and flexibility to help companies of all shapes and sizes with the creative use of HRAs. We will work with your team to listen to your ideas, identify your goals, and then develop a creative solution.
There are several different kinds of HRAs available:
HRA Gap Plan
The gap design complements high-deductible insurance products by paying only for items eligible under the insurance plan, thereby filling the “gap” between the employees’ out-of-pocket expenses and the insurance coverage.
Coverage under this HRA is limited or restricted to specific expenses such as deductible expenses or prescription drug co-payments.
Unrestricted Rollover HRA
This HRA pays for all medical expenses not covered by insurance, including but not limited to insurance co-payments and deductibles, vision and dental expenses, and/or prescription drug co-payments. Unused account balances are rolled over and can be used in future years.
Unrestricted Refill HRA
A Refill HRA allows the benefit maximum to remain constant and replenished on an annual basis. For example, let’s say you put $500 in your employees’ Unrestricted Refill HRA. Regardless of any remaining account balance at the end of the year, this HRA will refill to the original $500 balance at the beginning of your new plan year.
To learn more about HRAs for your company, request a proposal to discuss your needs.