If you have considered offering your employees a health reimbursement arrangement, you probably know that these tax-advantaged tools allow you to reimburse employees for insurance premiums and/or qualified medical expenses. HRAs have proven to be an effective retention strategy and are a great option for businesses over the expensive, one-size-fits-all group plan. With the right HRA administrator, reimbursing employees for health insurance is simple, quick, and effective. But what is an HRA administrator? Let’s dive right in.
HRAs: an overview
Health reimbursement arrangements 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.
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.
What is an HRA administrator?
A good HRA administrator will do all the heavy lifting for you and help you navigate the process from start to finish. Our administration platform 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. There’s also 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.
Looking for an HRA administrator?
Many considering an HRA wonder how easy it is to set up and what the upkeep looks like in an already crammed schedule. We're here to tell you that using a third-party HRA administrator (like Take Command) will save you time, headaches, and even penalties if you have trouble correctly navigating the compliance requirements and complex rules. An HRA administrator will do the heavy lifting for you. Reach out today and let’s chat!
A wife to one and mother to four, Keely does all of the things. She’s also dabbled in personal finance blogging and social media management, contributed to MetroFamily magazine, and is passionate about good food, treasure hunting and upcycling. With a B.S. in Psychology from the University of Oklahoma and a knack for a witty punchline, it’s no surprise that Keely’s social posts are as clever as they get. In her (very little) free time, you’ll find Keely with her nose in a book or trying out a local restaurant with her family.