Does an HRA provide more choices and control?

A health reimbursement accounts (HRAs) flexibility
gives an employer the opportunity to design it with the
features that the business wants. Below are listed
some of the choices that an employer can make.

Linked vs. Stand-Alone or Unlinked
The first decision is whether the HRA is or is not linked
to the employee's health insurance policy. A linked
policy is designed to pay deductibles and/or co-pays
under the policy and the employee is required to
participate in the health insurance. A stand-alone or
unlinked policy is not connected with an insurance
policy in any way.
Tiers, Deductibles, and Co-Pays
You can set all these variables up for an HRA.
1. Tiers with different limits for single employee, family, etc.
2. A deductible to meet before reimbursement begins
3. Required co-pays

Carry-Over Option
HRA regulations permit, but do not require unused funds to be carried over to
the next coverage period. Employers decide whether carry-over is allowed and
whether to put restrictions on the carry-over.
Maximum Reimbursement
You can set the maximum reimbursement an employee may receive during a
coverage period. It's possible after a length of time participating in the HRA and
accumulating carry-over funds, an employee may accumulate sufficient funds
to create a cash-flow problem if the employee tries to claim reimbursement for
the entire amount. Setting a maximum reimbursement, allows for the funds to
be reimbursed over time.

Spend-Down Option
While you do not have control over COBRA regulations, you do have the option
of offering, as an alternative, Spend-Down Option where employees losing
eligibility under the HRA are given a period of time where they can be
reimbursed for eligible expenses incurred after the eligibility loss from
accumulated funds. (This does not replace COBRA, but gives the employee
the right to choose between COBRA or Spend-Down.)

Employers have the choice of deciding what events trigger eligibility, how
much of the accumulated HRA funds are converted into Spend-Down funds, or
how long the employee has to draw out the funds.
PA Health Reimbursement Account (HRA)
What is the difference between HRAs and FSAs?

An HRA is funded solely by the employer. No employee contributions are

There is not a use-it-or-lose rule with HRAs. In an HRA, the employer has the
option of letting the employee carry-over all or a portion of the unused funds. In
an FSA, the employee needs to be careful in estimating expenses because if
the employee does not use all the money, the remainder will be forfeited at the
end of the plan year.

In an HRA, the employee can only be reimbursed for the amount the employer
has contributed to date less any prior reimbursements. The employer has the
option of contributing monthly, quarterly, or annually. In an FSA, the entire
election amount is available for reimbursement on the first day of the plan

While most employers will choose a 12-month insurance coverage period, it's
allowed to choose a shorter coverage period.

HRA regulations do not require the expense to be incurred during the plan
year; but the employee must have been a participant in the HRA when the
expense was incurred. The business has the choice of allowing this option or
Why should an employer offer an HRA in addition to an FSA?

Employees cannot contribute to an HRA, but typically expect to have more
expenses than can be reimbursed from an HRA. Employees can set aside tax-
free funds to pay for additional medical expenses if a business offers both an
HRA and FSA.

Any time an employee saves on payroll taxes, the employer has corresponding
savings. An HRA and FSA combination is a win win for a business!
How will an HRA benefit my business?

An HRA is an excellent option to fight the battle of the health insurance rate
increases. HRAs offer the following for businesses:
1. Flexibility to design plans to enhance your employees' benefits
2. Reduce your monthly insurance premium expenses to a manageable level
3. Insurance carrier independence that is very important
4. Operate a more affordable health care expense budget
Why would an employer choose to offer an HRA?

Employers today are faced with tough health care decisions about whether to
increase the cost to their employees or decrease the amount of coverage.
Since neither option is desirable, an HRA can be an excellent alternative for
many businesses. The employer can purchase high deductible health
insurance coverage that provides quality coverage at an affordable rate and
then subsidize the employee's out-of-pocket expenses through HRA funding.
The employer provides health insurance coverage to the employees at a rate
that most or all can afford with added choices and control for the employee.
**The information, pictures, and other content in this website about particular
insurance services is only provided for informational purposes. Any decisions
regarding your insurance needs should be discussed with a licensed insurance
The Health Reimbursement Account (HRA) is designed
for companies employing two or more people, excluding
sole proprietorships and owners of subchapter-S
corporations. Employer funds are used to reimburse
employees for qualified medical expenses in
accordance with an employer / employee arrangement.
Internal Revenue Service requirements for qualified
medical expenses will also apply. Employer payments
are a tax deductible business expense and
reimbursements to employees are tax free.
Only employer funds are involved in a Health
Reimbursement Account so the employer determines
the amount to reimburse each year, the amount that
can be carried over each year, when to make
reimbursements, whether the employee or the
employer pays first, what happens when an employee
leaves the company and what is the maximum an
employee can accumulate. The employer may have
other options available, too.
Every year an employer puts money aside in an HRA to
help an employee pay for eligible medical expenses.
The employee pays no taxes on the money and
manages the account. If the employee uses all of the
money in their account, they pay the rest of the
deductible out of their pocket. If an employee has
unused money in their account at the end of the plan
year, some HRA plans allow the balance to be applied
to the following year. An employee will typically forfeit
the money in their HRA account if they leave the
company since all funds are owned by the employer.
Click on the link below to fill out a secure quote request form for a health
reimbursement account that benefits large employers, small business
owners, and their employees. Or you can speak with our Pennsylvania Group
Health Insurance specialists toll free at 800-662-3982 to discuss the policy
features in more detail.
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We are a Yardley, PA insurance agency offering affordable Pennsylvania HRA health
reimbursement account to mid-sized, large, and small business in the following towns,
cities and counties in Pennsylvania: Philadelphia, Bridgewater, Croydon, Bensalem,
Nottingham, Edgely, Newportville, West Bristol, Strafford, Devon, Berwyn, Port
Kennedy, Newtown Square, Gradyville, Cheyney, Concordville, Narberth, Milltown,
Westtown, Trainer, Marcus Hook, West Chester, Lancaster, York, Reading,
Bethlehem, Pottstown, Coatesville, Kulpsville, Warminster, Montgomeryville, Levittown,
Valley Forge, Malvern, Green Tree, Paoli, Devault, Chatwood, Goshenville, Sugartown,
Glenloch, Chester Springs, Audubon, Eagleville, Evansburg, Worcester, Blue Bell,
Center Square, Fort Washington, Doylestown, Chalfort, Quakertown, Perkasie,
Sellersville, Soudertown, Willow Grove, Warrington, Morrisville, Ambler, Lower
Gwynedd, Washington Crossing, New Hope, Richboro, Feasterville, Southampton,
Langhorne, Holland, Newtown, Emmanus, Hellertown, Whitehall, Cetronia, East Texas,
Lanark, Dorneyville, Wagnersville, Catasauqua, Walbert, Farmersville, Stiles,
Friedensville, Mechanicsville, Hanover, North Catasauqua, Stroudsburg, King of
Prussia, Springfield, Woodlyn, Chester, Norwood, Ridley Park, Prospect Park,
Folcroft, Darby, Swarthmore, Drexel Hill, Rutledge, Yeadon, Upper Darby, Secane,
Milmont Park, Garden City, Wallingford, Morton, Aldan, Primos, Pilgrim Gardens,
Colwyn, Lester, Essington, Eddystone, Landsdowne, Fernwood, Milbourne, Havertown,
Broomall, Penn Wynne, Merion Station, Wynnewood, Haverford, Penn Valley, Bala-
Cynwyd, Ardmore, Rosemont, Overbrook, Belmont Hills, Villanova, Rebel Hill, Gulph
Mills, Gladwyne, Conshohocken, Kings Manor, Swedeland, Swedesburg, Bridgeport,
Norristown, Lafayette Hill, Plymouth Meeting, Erdenheim, Oreland, Flourtown, Ardsley,
North Hills, West Conshohocken, La Mott, Cheltenham, Melrose Park, Elkins Park,
Glenside, Wyncote, Roslyn, Abington, Huntingdon Valley, Rydal, Meadowbrook,
Jenkintown, Hollywood, Rockledge, Somerton, Bustleton, Torresdale, Holmesburg,
Tacony, Kensington, Feltonville, Frankford, Olney, Andalusia, Cornwells Heights,
Bucks County, Philadelphia County, Delaware County, and Montgomery County, PA.
We can also offer HRA services to small business throughout New Jersey, including in
Ewing, White Horse, Mercerville, Hamilton Square, Slackwood, Lawrenceville,
Ewingville, Bakersville, Bordentown, Princeton, Camden, Trenton, Hunterdon County,
Mercer County, and Burlington County, NJ.