What employees should know about HRA’s
HRA’s offer discounted rates on health insurance for employees. They also provide staff with a variety of benefits, including vision, dental, and life insurance. Health dollars now, more than ever, need to go further, and with an HRA they can. Through a Health Reimbursement Arrangement (HRA), tax-free money from your employer is received to cover medical expenses that may not be covered by insurance. Examples include dental work, vision care, and prescriptions. You cannot personally contribute to an HRA.
An HRA is designed to pay for out-of-pocket medical expenses. It is fully funded by the employer and the usage of funding can be used on a range of eligible expenses.
How HRA’s Work
Money is put into the HRA by the employer and the employee decides how to spend those healthcare dollars. The money does not count as income since it is contributed by the employer so there are no tax implications. The money can be used throughout the year on any qualified medical expense. When the plan design allows, leftover dollars may be allowed to roll over from year to year so long as the employee continues to be a member of that plan, otherwise they may be forfeited.
The Prepaid Benefits Card and HRA’s
B3PA offers a prepaid benefits card with the HRA. This card makes it quick and convenient to access healthcare funds. When the card is used, the cost of the eligible expense is automatically deducted from the HRA. There is no need to worry about claim forms or wait time to receive a check in the mail. Just swipe and go. Easy as that!
Though it is not required to submit the receipts to verify eligible expenses, it is wise to keep them for easy reference and in case the IRS requires them. In addition, checking balances, statements, and alerts is easy online through a secure Web portal.
HRA’s and the Prepaid Benefits Card can be used to pay for expenses like:
Routine health care such as office visits, x-rays, and lab work
Hospital expenses – including room and board and surgery
Medications: prescriptions and over the counter (OTC) drugs, when prescribed by a physician
Dental care such as cleaning, fillings, and crowns
Vision care: eye exams, contacts, and glasses
Copays and coinsurance (portions paid for by the employee)
Eligible OTC items (first aid dressings, supplies, bandages, rubbing alcohol, etc.)
Contact lens solutions/supplies
Thermometers, blood pressure monitors, cholesterol testing, and other diagnostic products
Insulin and diabetic testing supplies
See how B3PA can help you with your HRA Groups by visiting us here.