What you need to know about HRA administrators
If you’re considering offering your employees a Health Reimbursement Arrangement (HRA), an HRA administrator is exactly what you need to get started. HRA administrators are becoming increasingly popular due to their ease of use and employee satisfaction.
Ensuring that HRAs comply with legal and privacy standards is essential for your business and your employees. This isn’t something you want to take lightly – you’ll want expert help from an HRA administrator. Plus, working with an HRA administrator makes your life easier!
So let’s dive a little further into what an HRA is and what you need to know about HRA administrators.
What is an HRA?
An HRA, or a health reimbursement arrangement, is an affordable alternative to traditional employer insurance coverage. It works exactly how it sounds. Rather than confining your employees to one particular health insurance plan through your company, HRAs reimburse employees for health insurance premiums and qualified medical expenses on a pre-tax basis.
This empowers employees by allowing them to choose exactly what health insurance plan works best for them and their families.
HRAs are an effective employee retention strategy because of the independence employees have with their own health coverage. They no longer feel trapped in a certain employer benefit offering and rather can take things into their own hands.
Not only does offering an HRA make your life easier, but it provides your employees with portability, flexibility, and autonomy with their health insurance plans.
Sounding good so far? The next step to implementing an HRA is deciding which HRA type is the best for your company.
There are two main HRAs, and the right one for you depends on the business you’re serving. These two HRAs are
- Qualified Small Employer HRA (QSEHRA)
- Individual coverage HRA (ICHRA)
Qualified Small Employer HRA (QSEHRA): A QSEHRA reimburses employees for qualified medical expenses. This HRA is designed specifically for small businesses with 50 employees or less. The plan pays for benefits tax-free, with an annual contribution limit.
Some other details on QSEHRAs:
- QSEHRAs let small businesses offer a competitive benefits package while also being an affordable option.
- QSEHRAs are optimized to provide the best value for your small business budget.
- You can’t combine QSEHRA with a group plan.
- QSEHRA reimbursements must be the same size for everyone.
Specific HRA administrators – QSEHRA administrators – are available to assist you in offering an HRA plan to your small business employees.
Individual coverage HRA (ICHRA): An ICHRA reimburses employees tax-free for the cost of health insurance premiums and expenses, but they’re designed for any company size and any amount. There are no annual contribution limits, and tons of flexibility allows for different employee reimbursement.
Some other details on ICHRAs:
- ICHRAs are the most adjustable option for businesses.
- You can combine ICHRA with a group plan.
- ICHRAs have no reimbursement limits.
Specific HRA Administrators – ICHRA administrators – are available to help your business offer HRA plans to all of your employees, no matter the scale of your company.
So, choosing between these two HRA types will depend on your business size and specific needs. Whether you’re a small business or a large corporation, HRAs – and HRA administrators – can be a perfect employee health insurance solution.
For more in-depth information about these HRA types, check out the detailed guides on our site for QSEHRAs and ICHRAs.
What do HRA administrators do?
An HRA Administrator is an online platform or software that helps businesses organize all the details of HRA administration. Essentially, they do all the hard work to help you and your business navigate the HRA administration process easily.
HRA administrators like ours will help you with:
- Legal and tax documents
- Year-End reporting
- HIPAA and reporting compliance
Apart from the legal and privacy guidance an HRA administrator offers, our HRA administrators at Take Command go a step further. We value the employee and go above and beyond to ensure satisfaction with HRAs. We’ll onboard your employees and provide them with educational material about their new HRA so they can maximize their new benefits.
We also support your employees from start to finish while they search for the individual health insurance plan that’s right for them. We’re here to answer questions and offer an easy-to-use platform for employees to request reimbursements.