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Health Reimbursement Arrangements

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    • Take control of your healthcare costs and minimize out-of-pocket expenses with a Difference Card HRA.  

    Health Reimbursement Arrangements (HRAs) are employer-funded reimbursement accounts designed to cover eligible healthcare expenses. Unlike Healthcare FSAs, where IRS guidelines determine eligible services, HRAs allow employers to define the reimbursable services.  

    By leveraging an HRA, employers have the flexibility to choose which healthcare services will be covered, providing tailored benefits to their employees. Reduce your financial burden and enjoy greater control over your healthcare expenses by utilizing a Difference Card HRA. 

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    What is an HRA and How does it Work?  

    A Health Reimbursement Arrangement (HRA) is a type of employer-funded benefit plan designed to help employees cover eligible healthcare expenses. It provides a tax-advantaged way for employers to reimburse their employees for qualified medical expenses. 

    How does an HRA work? The employer sets up and funds the HRA, allocating a specific amount of money to each employee’s account. These funds are not considered part of the employee’s taxable income. When employees incur eligible healthcare expenses, they can submit a claim to the HRA for reimbursement. 

    Unlike a Flexible Spending Account (FSA), where employees contribute their own pre-tax dollars, HRAs are solely funded by the employer. This means that employers have greater control over the design and rules of the HRA, including which expenses are eligible for reimbursement. 

    The employer can determine the types of healthcare expenses that are covered by the HRA, such as deductibles, co-pays, prescription medications, and certain medical treatments. Additionally, employers can specify any limitations or exclusions in the plan, ensuring that the HRA aligns with their budget and benefit objectives. 

    Employees can access their HRA funds by submitting documentation of their eligible expenses, such as receipts or Explanation of Benefits (EOBs) from their insurance provider. The employer then reviews the claim and reimburses the employee from the HRA account. 

    It’s important to note that any unused funds in the HRA typically do not roll over to the next plan year. However, some employers may offer a carryover provision or allow a portion of the unused funds to be carried forward for future use. 

    In summary, an HRA is an employer-funded benefit plan that reimburses employees for qualified medical expenses. It provides a tax-advantaged way for employers to support their employees’ healthcare needs while maintaining control over the plan’s design and coverage. By utilizing an HRA, employees can effectively manage their healthcare costs and receive reimbursement for eligible expenses.

    The Different Types of HRAs 

    Employers have access to various types of Health Reimbursement Arrangements (HRAs), including:  

    • Integrated HRA: Works with a group health plan, often alongside a high-deductible health plan (HDHP). 
    • Excepted Benefit HRA: Offers limited benefits for dental, vision, and other expenses, irrespective of other health coverage. 
    • Individual Coverage HRA: Lets employees use HRA funds to buy individual health insurance. 
    • Qualified Small Employer HRA: Designed for small businesses (<50 employees) to reimburse individual health insurance premiums and qualified medical expenses. Each type has its own regulations, allowing customization to meet employees’ needs. 

    Integrated HRAs 

    An Integrated Health Reimbursement Arrangement (HRA) is a type of employer-sponsored benefit plan that works alongside a group health plan, often in conjunction with a high-deductible health plan (HDHP).

    Here’s what you need to know about Integrated HRAs: 

    • Integrated HRAs complement the coverage provided by the group health plan by reimbursing employees for out-of-pocket expenses not covered by the plan. 
    • Employees can use the HRA funds to cover deductibles, copayments, and other qualified medical expenses, which helps them effectively manage healthcare costs and reduce financial burdens. 
    • Employers have flexibility in designing the Integrated HRA plan to meet their specific needs, including determining contribution amounts, reimbursement limits, and eligible expenses covered. 
    • Aligning the HRA with the group health plan allows employers to enhance their overall benefits package and provide additional financial support to employees. 
    • One significant advantage of Integrated HRAs is the potential for tax savings, as employer contributions are generally tax-deductible and employees are not taxed on HRA reimbursements for eligible expenses. 
    • Overall, Integrated HRAs offer employers a valuable tool to enhance employees’ healthcare benefits, reduce out-of-pocket costs, and provide a tax-advantaged solution for managing medical expenses. 

    Non-Integrated HRAs 

    Non-Integrated Health Reimbursement Arrangements (HRAs) are employer-sponsored benefit plans that are not tied to a specific group health plan. These HRAs provide employers with greater flexibility in designing the plan and can be offered independently of any existing health insurance coverage.

    Here’s what you need to know about non-integrated HRAs: 

    • Employers allocate funds to non-integrated HRAs, which employees can then use to cover eligible healthcare expenses, including deductibles, copayments, prescription medications, and other out-of-pocket costs. 
    • Non-integrated HRAs are commonly used by employers who don’t offer a group health plan or wish to provide additional healthcare benefits beyond their existing plan. 
    • Employers have more control over the design, contribution amounts, and eligible expenses covered by non-integrated HRAs. This allows them to customize the plan according to their workforce’s specific needs and align with their budgetary considerations. 
    • Non-integrated HRAs offer flexibility, enabling employers to tailor the plan to their preferences and meet the unique requirements of their employees. 
    • Employer contributions to non-integrated HRAs are typically tax-deductible, providing potential tax advantages. 
    • Overall, non-integrated HRAs offer employers a flexible and customizable option to provide healthcare benefits, empowering them to manage healthcare costs effectively and promote the well-being of their employees. 

    What Can You Get Reimbursed For?  

    In an HRA plan, the reimbursement of various healthcare services is a key component. Plan administrators typically provide reimbursements for a wide range of medical expenses, including:  

    • Doctor’s office visits 
    • Hospital services 
    • Prescription drugs 
    • Over-the-counter products 
    • Health insurance premiums 
    • Coinsurance 
    • Deductible expenses 
    • Dental care 
    • Vision care 

    These reimbursements aim to alleviate the financial burden on employees and help them access essential healthcare services. By offering coverage for a comprehensive list of healthcare services, HRA plans play a vital role in supporting individuals’ well-being and ensuring they can receive the necessary medical treatments and preventive care.

    The Benefits of HRAs for Employees 

    Health Reimbursement Arrangements (HRAs) offer employees several benefits:

    • Financial assistance: HRAs provide reimbursement for medical expenses, reducing the financial burden of healthcare costs. 
    • Customizable coverage: Employees can tailor their healthcare coverage to their specific needs, ensuring personalized and comprehensive care. 
    • Tax advantages: HRA contributions are often tax-deductible for employers and tax-free for employees, maximizing the value of healthcare benefits. 
    • Flexibility and portability: HRAs are portable, allowing employees to take their funds with them when changing jobs, ensuring continuous coverage. 
    • Access to quality care: Employees have the freedom to choose preferred healthcare providers and services, ensuring access to high-quality care. 

    HRAs empower employees with financial assistance, personalized coverage, tax advantages, flexibility, and access to quality care, enhancing their overall healthcare experience and well-being.

    The Benefits of HRAs for Employers 

    Health Reimbursement Arrangements (HRAs) offer several benefits for employers: 

    • Cost control: HRAs allow employers to have more control over healthcare costs by setting contribution limits and choosing eligible expenses, helping to manage budget effectively. 
    • Tax advantages: Contributions made to HRAs are typically tax-deductible for employers, offering potential tax savings. 
    • Customizable plans: Employers can design HRAs to align with their specific needs and employee demographics, providing tailored benefit offerings and increasing employee satisfaction. 
    • Talent attraction and retention: HRAs enhance the overall benefits package, making employers more appealing to potential employees and aiding in employee retention. 
    • Improved employee health and productivity: HRAs support employees in accessing necessary healthcare services, promoting wellness and productivity in the workplace. 

    In summary, HRAs provide employers with cost control, tax advantages, customizable plans, talent attraction, and improved employee health and productivity, making them a valuable tool in managing healthcare benefits.

    A young man wearing a suit and glasses shaking the hands of a woman in a meeting

    HRA funds can be loaded directly onto The Difference Card 

    By loading HRA funds directly onto The Difference Card, employees gain convenient access to their benefits. They can easily swipe the card at the point of service for eligible expenses outlined in the HRA plan documents. Moreover, employers benefit from detailed reporting provided by The Difference Card, which presents HIPAA-compliant aggregate data on HRA utilization. This streamlined process ensures a seamless experience for employees and enables employers to monitor and analyze the effective utilization of their HRA funds. 

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