An HRA administration service or HRA administrator is important if you're thinking of 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. Since they come with lots of rules and regulations, here's what to look for when it comes to HRA administration service.
With the right HRA administration platform, reimbursing employees for health insurance is simple, quick, and effective.
But first, let's talk through the basics.
HRA administrator 101
How does HRA administration work?
The mechanics of an HRA are surprisingly simple, but an HRA administrator or HRA administration service will do the heavy lifting for you.
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.
An HRA administrator provides a tech-enabled platform to process these reimbursements and verify that your employees are enrolled in individual health insurance.
What are the main types of HRAs?
Before we jump into HRA administrator information, let's go over what types of HRAs an HRA administration tool would help you with and what to look for in health reimbursement arrangement administrators.
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.
For almost everything you could possibly want to know about these HRAs, check out our in-depth guides for the QSEHRA and the ICHRA.
HRA administration: what to look for
A good HRA administration tool will do all the leg work for you and help you navigate the process from start to finish.
Take Command's HRA administration platform provides employers with the following:
- 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)
Can I administer my own HRA?
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.
Ready to get started?
We are the only HRA administration service and 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!
In the meantime, give our new HRA Guide a read. It's chocked full of good stuff!
