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Health Reimbursement Arrangements  (HRAs)

Click to listen and learn about HRAs 

The HRA or health reimbursement arrangement, which evolved from IRS Code Section 105 is  one of the  latest tax strategies available to  small businesses to control healthcare costs.
The HRA enables the employer to choose a health plan that covers the BIG expenses while the employer provides coverage for some of the smaller costs through the HRA  --only after the employee actually incurs the costs. The end result is a win/win situation for the employer and the employee. There is no change in benefits (or sometimes even INCREASED BENEFITS) for the employee and DRAMATIC SAVINGS ( up to 50%) for both the employer and employee. The employer enjoys a 100% tax deduction each time an eligible expense is reimbursed to an employee and the employee gets his healthcare expense "covered". 

Additionally, plans can be designed so there is  little time required to administer the HRA  due to only an occasional need to reimburse an employee through the use of well price plans with carriers that will cover office visits and prescriptions and ER visits with co-pays but provide SUBSTANTIAL COST SAVINGS by allowing you to elect to pay more out of pocket in the event of a hospital stay. The HRA would come into play to reimburse the employee for the deductible or coinsurance amount he would be responsible for only  in the rare event of a hospital stay or  surgery.

 The HRA provides NUMEROUS ADVANTAGES to the small business owner and his employees. The HRA offers the following benefits :

  •  Fully Flexible and Customizable to the employers wishes
  • Enables the small business to dramatically save on group health insurance costs without sacrificing benefits employees want simply by choosing a higher deductible/co-pay plan and reimbursing the employee through the custom company HRA for part of or all of the cost difference in benefits.
  • The HRA is fully funded by the employer with the substantial health insurance savings the company will realize and reimbursements to the employee are not taxable to the employee.
  • A separate HRA account can be established or reimbursements can come out of another fund.
  • The employer receives a 100% tax deduction of all HRA reimbursements paid to employees for actual medical expenses the employee incurs
  • The employer has full control over the HRA design for his company. The only restriction is that all employees be treated the same
  • The employer may or may not choose to provide HRA reimbursements to COBRA or FMLA employees
  • The HRA  can be used with a group health plan or on a stand alone basis to reimburse employees for individual health insurance premiums

Ask about a customized HRA plan document for your company for as little as $350 and stop throwing money out the window needlessly on exorbitant health insurance costs for unused benefits!