A Healthcare Reimbursement Arrangement, typically referred to as an HRA, can be utilized by employers to reduce their overall healthcare costs without placing additional financial burden on their employees. An HRA allows the employer to pay for eligible expenses with pre-tax dollars. The employer decides what expenses are eligible, within the IRS guidelines, leaving a lot of flexibility in plan design.
Typically an HRA is coupled with a High Deductible Health Plan and the HRA pays for either the entire deductible or a portion of the deductible. With this type of a plan the premium savings often outweigh the potential claims that the employer would have to pay if every employee used their entire deductible. The average HRA participant only utilizes 40% of the deductible so the employer savings are actually much higher.
Flex Facts can work with your broker to design an HRA coupled with a High Deductible Health Plan that can save you money. Most plan designs provide less exposure for employees while reducing the cost to the employer, a true win-win. We can also couple the HRA with a healthcare FSA on a single debit card at no additional cost increasing the employee and employer savings.