Have you thought about offering your employees a health reimbursement arrangement, or HRA? These tax-advantaged tools allow you to reimburse employees for insurance premiums and/or qualified medical expenses. They are proven to be an effective retention strategy and are a great option over the expensive, one-size-fits-all group plan. Here's what to look for when it comes to HRA administration.
With the right HRA administration platform, reimbursing employees for health insurance is simple, quick, and effective.
But first, let's talk through the basics.
How do HRAs work?
The mechanics of an HRA are surprisingly simple. At a high-level, employees pay for their own health expenses and you reimburse them. The key to note is that these payments are reimbursements. Employees will pay the insurance company or doctor’s office directly and then submit a claim to get reimbursed for their expenses tax-free.
What are the main types of HRAs?
QSEHRA: The qualified small employer HRA is designed specifically for small businesses (i.e., companies less than 50 employees) who do not offer a group plan. The QSEHRA has annual contribution limits which change from year to year.
ICHRA: The individual coverage HRA is similar to its predecessor but has fewer limitations- it is available to companies of any size, has no contribution limits, and has greater design flexibility with its eleven classes, which allow for differing reimbursements to employees.
We are often asked whether an employer can administer their own HRA. Our best advice? Don't even think about it. For one, when dealing with health insurance and employees' health, privacy is a big deal. Things could get pretty uncomfortable for everyone involved. Then there's the whole issue with the HIPAA Privacy Rule, which is another layer of protection for employees' private health information. It's also time consuming for business owners to keep up with the medical receipts, maintain all the health information in a secure way, and handle the paperwork that comes with it.
A good HRA administration tool will do all the heavy lifting for you and help you navigate the process from start to finish. Ours will help you with:
- Legal documents
- Onboarding employees
- Tax documents and year-end reporting
- HIPAA and privacy compliance
- A customized admin portal to review and approve HRA documents, view monthly reimbursement reports, add/remove employees, manage subscriptions, update payment information, and see overview information about HRAs.
84% of our clients surveyed said they spend less than an hour each month administering their HRA.
We’ll also help employees get the most out of their HRA by:
- Providing helpful educational material to communicate to your employees the benefits of their new HRA and how to get the most out of it
- Supporting employees while they shop for an individual health insurance plan to use with their HRA
- Answering questions along the way
- Providing an easy platform to request reimbursements (like simply snapping a picture and uploading on phone)
Ready to get started?
We are the only HRA administrator that also provides support for individuals shopping for health insurance. We can help your employees shop for off- and on-market plans, compare plans side by side, and see what works best for them, their preferred doctors, and their prescriptions. Reach out and let's get going!