HEALTH REIMBURSEMENT ARRANGEMENTS

It’s a fact – medical expenses continue to rise year and year.  Employers are forced to raise plan deductibles and co-pays to help hold down premium costs.  In an effort to help keep down the growing cost of insurance premiums many employers are seriously looking at HRAs.

The HRA is an Internal Revenue Service (IRS) regulated employer funded medical expense reimbursement plan established under Section 105 of the Internal Revenue Code.  An HRA can be coupled with a high deductible health plan or it can be offered as a stand-alone benefit.  It is very similar to the Flexible Spending Account (FSA) except for one very important point:  Any unused amounts at the end of the plan year for an HRA account are carried over for use in future years.

The HRA can be designed in any fashion and the choices seem endless, but there are three important factors an employer must include in their plan documents: 1) The Plan can only be funded by the employer; 2) Only income tax deductible medical expenses may be reimbursed from HRA funds; and 3) there can be no withdrawals for any other purpose than qualified medical reimbursable expenses.

EBS/Atlanta can administer the HRA Plan with an FSA Plan or as a stand-alone benefit.  The SmartFlex Debit Card can be used on each account.  Contact EBS/Atlanta today for additional information on Health Reimbursement Arrangements.