While they've been around for a while, HRAs have recently gained traction among businesses of all sizes due to regulatory rule changes that make them more accessible and easy to use. The key to successfully administering an HRA lies in implementation, including remaining compliant with all the rules and regulations that govern it. Here's what to keep in mind when considering HRA administrators.
An alternative to traditional group plans, these 401(K) style benefits put the power in the employees' hands and offer more personalization. They are also an effective recruitment and retention strategy. However, it's best to outsource the administration functions of the HRA.
The right HRA administrator makes reimbursing employees for health insurance simple, quick, and effective.
Let’s check out some of the specifics of what HRA administrators do (and why you need one).
What is an HRA?
HRA stands for health reimbursement arrangement. These are tax-advantaged tools that are built on a series of regulations that help to ensure they are being offered fairly and are achieving their intended aim, which is to help employees pay for benefits tax-free.
A health reimbursement arrangement works pretty much exactly how it sounds: the employer reimburses for premiums and medical expenses on a tax-free basis, and the employee chooses a plan that fits their needs. Employees are reimbursed when they submit a claim.
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.
What HRA administrators do
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.
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)
Why you need an HRA administrator
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.
Need more convincing? This post walks you through more of the specific penalties and fees an HRA administrator can help you avoid.
Take Command Health as your HRA administrator
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. Check out our reimbursement platform to see how easy it is to start designing the best HRA for your business. Our team of HRA experts is standing by to help you get started!