Health Reimbursement Account (HRA)

Affordable Group HRA Health Insurance

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Health Reimbursement Account (HRA)

What is an HRA?

An HRA is an employer funded health reimbursement account (HRA) that can be used to pay for eligible medical expenses. The employer sets aside a specific amount of pre-tax dollars to pay for healthcare expenses.

  • Primary Requirements. The HRA plan must be funded solely by the employer and cannot be funded by salary reduction.
  • Premium Savings. As a general rule a health plan with a higher deductible will have reduced premium costs, which creates real savings for the employer. HRA contributions may then be funded using the savings gained from the lower premium costs.
  • Tax Advantages. All employer contributions to the HRA plan are tax deductible, and tax free to the employee.

How does an HRA work?

Employer establishes the HRA reimbursement rules by deciding which expenses are to be reimbursed. The HRA is typically administered by an insurance company or third party administrator to pay the designated claims. Employer makes an initial deposit then replenishes the HRA as needed.

  • Reduce the deductible. The employer can decide to lower the deductible amount that the employee would need to pay - for instance, a health plan with a $5,000 deductible may have the HRA reimburse deductible expenses that exceed $3,000 - thus lowering the out of pocket expenses for the employee.
  • Specific expenses. Employers may establish what expenses the HRA funds may be used for; from as comprehensive as all health related expenses to as limited as emergency room expenses only.
  • Debit Cards. Your employees are provided with an HRA debit card to pay for eligible expenses. The card works at most health-related locations, including pharmacies, doctor offices, hospitals and medical supply stores.
HRA Example

Are you a good HRA Candidate?

A Health Reimbursement Arrangement is a smart way to offset the rising costs of health insurance while still maintaining a benefit package that will be attractive to your employees. While it can be a solution it's not the best fit for everyone. Consider these items to see if your company would be a good fit for an HRA.

HRA Insurance Carriers in Georgia
  • Humana. In Georgia Humana offers a simple and easy to manage Health Reimbursement Arrangement.
  • United Healthcare. Two great HRA options for employers - first dollar HRA reimbursement for a benefit rich employee package, or a split-dollar HRA plan where the employee first must satisfy a portion of their deductible before the HRA reimburses for eligible expenses.
  • Aetna. With no administration fees Aetna's HRA administration arrangement with Payflex is an optimal way establish an HRA for your company.