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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. |
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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. |
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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. |
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PA Health Reimbursement Account (HRA)
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What is the difference between HRAs and FSAs?
An HRA is funded solely by the employer. No employee contributions are
allowed.
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 year.
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 not |
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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! |
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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
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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. |
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**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 agent. |
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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. |
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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. |
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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. |
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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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Pennsylvania
Business Insurance
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1 Stop Benefits, Inc.
1546 Old Farm Court
Yardley, PA 19067
Bucks County, Pennsylvania
Toll Free: (800) 662-3982
Secure Fax: (888) 662-3920
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Answer a few questions and
we can provide you with an
insurance quote by phone or email. Choose a Pennsylvania business or personal insurance coverage from the menu above. |
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Health
Reimbursement
Account (HRA)
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1 Stop Benefits, Inc.
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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. |
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1 Stop Benefits, Inc.
Senior Settlements Division
17 Buttonwood East
Rumson, NJ 07760
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