health reimbursement arrangement

Health Reimbursement Arrangement (HRA)

Your employer puts money into your HRAand you choose how your healthcare dollars are spent. Because the funds contributed by your employer don’t count as income, there are no tax implications. It’s kind of like getting a raise. You can use the money throughout the year for qualified medical expenses. Depending on your plan design, any leftover dollars may roll over from year-to-year (as long as you continue to be a member of the plan), or they may be forfeited. Check with your Human Resources department or Plan Administrator for more information about your plan design.

The employee decides which out-of-pocket qualifying medical expenses they would like to submit for reimbursement. Should the employer continue to offer the program, any unused funding will be rolled over to the next plan year at the end of the plan year. Each new HRA client will have a one-on-one consultation with a knowledgeable B3PA representative to ensure the proposed HRA is as simple, efficient, and valuable to the participants as possible. Various HRA designs and features are available; B3PA will fully utilize the capabilities of its systems to accommodate as many options as possible.

The Qualified Small Employer Health Reimbursement Arrangement (QSEHRA), which allows for the reimbursement of health insurance premiums along with medical expenses, is a B3PA option for employers with fewer than 50 employees B3PA will help its HRA employers navigate through the ever-changing regulations surrounding benefits such as Affordable Care Act, Tax Cuts and Jobs Act, etc. We are dedicated to only operating compliant HRA plan designs.

Why should I consider an HRA?

If you work for an employer that offers an HRA, you might need to realize how much money you could save using it. You can use up to $3,000 per year ($1,500 if you’re under age 65) to pay for qualified medical costs without worrying about deductibles or co-pays.

The 2023 excepted-benefit HRA maximum new contribution amount is $1,950 (up from $1,800 in 2022).

How a Health Reimbursement Arrangement  Works

Your Health Care Flexible Spending Account and Health Reimbursement Account dollars can be used for a variety of out-of-pocket health care expenses that qualify as federal income tax deductions under Section 213(d) of the Internal Revenue Code (“IRC”).

Health Care FSA dollars can be used to reimburse you for medical and dental expenses incurred by you, your spouse or eligible dependents (children, siblings, parents, and other dependents which are defined in your Plan Documents). HRA dollars can be used to pay for eligible medical expenses incurred by employees and their dependents enrolled in the HRA.

IMPORTANT: The IRS defines the eligible medical expenses under a tax-deferred account. Not all costs are eligible under all plans. In addition, an employer may limit which expenses are allowable under their Health Care FSA or HRA plan. Feel free to contact your plan administrator if unsure what your Health Care FSA and/or HRA dollars may be used for. 

Qualifying Expenses

HRA Dollars and the Prepaid Benefits Card can be used to pay for expenses like:

  • Routine healthcare. Including x-rays, lab work, and office visits.
  • Hospital expenses. Including surgery and room and board.
  • Medications, including prescriptions. 
  • Over-the-counter (OTC) medication may also qualify when prescribed by a physician.
  • Dental care, including crowns, fillings, and routine cleanings.
  • Vision care includes glasses, contacts, lens solutions, and regular eye exams.
  • Coinsurance and co-pays cover the portions paid by the employee.

Maximize the Value of Your Health Reimbursement Account 

Health Reimbursement Arrangements (HRAs) can be complex, confusing, and overwhelming. The team at B3PA is dedicated to making it work for both employer and employee. To summarize, Health Reimbursement Arrangement (HRA) is an employer-sponsored plan that can be used to reimburse a portion of employees’ out-of-pocket medical expenses. The employer specifies a designated dollar amount to credit to the account monthly or annually. The employee decides which out-of-pocket qualifying medical expenses they would like to submit for reimbursement. At the end of the plan year, any unused funding will be rolled over to the next plan year – should the employer continue to offer the program.

  • Each new client will have a one-on-one consultation with a knowledgeable B3PA representative to ensure the proposed HRA is as simple, efficient and valuable to the participants as possible.
  • A variety of Health Reimbursement Arrangement designs and features are available; B3PA will fully utilize the capabilities of its systems to accommodate as many options as possible.
  • The Qualified Small Employer Health Reimbursement Arrangement (QSEHRA), which allows for the reimbursement of health insurance premiums and medical expenses, is a B3PA option for employers with less than 50 employees.
  • B3PA will help its employers navigate the ever-changing regulations surrounding benefits such as the Affordable Care Act, Tax Cuts and Jobs Act, etc. We are dedicated to only operating compliant plan designs.

QSEHRA

We offer everything needed to set up your Qualified Small Employer Health Reimbursement (QSEHRAs) and Individual Coverage Health Reimbursement Arrangement (ICHRA).

  • Plan Documents
  • Summary Plan Description (SPD)
  • Board Resolution & Adoption Agreement
  • Notice to Employees Reimbursement Form
  • Enrollment Form
  • The employer sets an amount for employee reimbursement that falls within legal limits.
  • Employees receive monthly amounts eligible for reimbursement.
  • Employees submit an invoice monthly and collect reimbursement (or set up a recurring claim).
  • You choose the amount you can afford, and we do the rest.
  • It allows you to keep an eye on costs
  • Keep a leg up on the competition
  • Offering a QSE-HRA can help attract and retain employees.
  • Out-of-pocket expenses are reduced, and it also allows them to choose the health plan that is right for them.
  • QSE-HRA assists with insurance premiums and, in some cases, other medical expenses.
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