HEALTH REIMBURSEMENT ACCOUNT (HRA)

An employee who enrolls in the High Deductible Health Plan will have access to a Health Reimbursement Account (HRA).  The HRA is an account set up by your employer to pay for health-related expenses that are not paid by any other source.

How the HRA Plan works:

Your employer will set aside funds in an individual account for you.  These funds can be used to reimburse the eligible health expenses that you or your eligible tax dependents incur during the coverage period.

As you incur these expenses, you will need to submit a Request for Reimbursement to Benefit Help Solutions, along with appropriate documentation.  Alternatively, you could apply for a “Benefits Card” that you can swipe at the provider’s office and the funds will automatically be withdrawn from your individual account.  Benefit Help Solutions may ask you to send in documentation, so you will need to keep your receipts for this purpose and for federal income tax regulations.

The HRA is “Use It or Keep It.”  Any funds that you do not use will be rolled over into the next year so that they may be used in future years.

 What are Eligible Expenses?

Eligible expenses are those that are medically necessary and are described in Section 213 of the Internal Revenue Code.  Note:  Not all expenses described in Section 213 are eligible, so you may have to contact the managing company to get approval.  These expenses include non-prescription drugs and those expenses that are beneficial to ones health.  They do not include those expenses that are  cosmetic in nature.

How an HRA Account Differs from a Flexible Spending Account (FSA):

A Flexible Spending Account allows employees to set aside pre-tax money to pay for medically necessary healthcare expenses.  Eligible expenses include deductibles, coinsurance, co-payments, dental care, vision care, prescriptions and over-counter drugs.

The FSA is “use it or lose it.”  Any funds that you do not use by the end of the year will revert to your employer.  You may have both types of plans.                         

Some Advantages of the HRA Plan vs. Current Basic, Prime or PPO Plans:

1.      Lower premiums allow employer to contribute to accounts where funds can be retained by the individual, if medical expenses are not incurred. 

2.      No primary care physician is required but discounts with physicians in provider networks are still available. 

3.      Statistics show individual account balances generally do increase substantially over time. 

4.      Other alternative medical care can be eligible medical expenses for use of account funds. 

5.      Individuals have an opportunity to be more involved in the purchasing of health services to maximize the balance of their accounts. 

Some Disadvantages of the HRA Plans vs. Current Basic, Prime or PPO Plans:

1.      Deductibles apply to most services so first dollars are taken from account balances or paid out of pocket. 

2.      Individuals must become more involved in the purchasing of health services to maximize the balance of their account.