Health Reimbursement Arrangement
HRAs can vary greatly in design, but are developed basically for the same purpose; to reimburse employees tax-free for expenses not covered by the employer’s health plan.
Health Reimbursement Arrangement
Health reimbursement arrangements (HRAs) are tax-advantaged accounts that are funded with employer dollars to pay employee expenses not covered by their health plan. The employer outlines what expenses will be covered in the HRA summary plan document within the limitations outlined by the Internal Revenue Service Publication 969. For example, an HRA could pay all eligible medical expenses, or the HRA could be limited to cover only dental or vision expenses. Although an HRA can have an option to carry forward unused funds to the future or for retirement, an employee cannot take their HRA funds to a new employer. HRAs can vary greatly in design, but are developed basically for the same purpose; to reimburse employees tax-free for expenses not covered by the employer’s health plan.
On average employers save over 20% on their overall healthcare costs while maintaining benefits and containing costs. OCA’s HRA utilization last year was just under 30%. The industry average is just over 40% HRA utilization. We believe this is due to our investment to employee education and compliant administration! Typically, an employer creates a notional (unfunded) arrangement for each participating employee, which OCA then uses to reimburse the employee for substantiated, qualified healthcare expenses. Unlike an HSA, employers will only have to fund for valid claims incurred. The rest of the money never leaves the employers bank account! It’s a win/win!
What We Can Do
Full Service Administration
- Automate Employee Reimbursement (ClaimsExpress)
- Provide Plan Document and SPD
- Conduct 105(h) Non- Discrimination Testing
- PCORI Fee Reporting
- Online/Mobile Access
Integrated Debit Card
- Single-Source Card for HRA/FSA/Commuter/HSA
- Separate cards (if requested) for each benefit
- Pay a set copay for Office Visits/Prescriptions
- Pay a percentage for Prescriptions
- Auto-resolve card transactions
Complex HRA Plan Design
- Non-Embedded/Embedded Deductibles
- Differentiated Co-pays Reimbursement
- Defined Copay Reimbursement
- Doughnut hole Reimbursement
- Percentage Payouts
- Variable Employee/Employer Responsibility
Are your employee’s tired of submitting claims for reimbursement?
OCA’s ClaimsExpress™ automates the employee claim filing experience by linking to your insurance carrier portal! Once the accounts are linked, ClaimsExpress™ will automatically retrieve any new EOBs issued by the insurance company. This can significantly reduce or even eliminate the need to file paperwork to get reimbursed from your HRA benefit.
Frequently Asked Questions
HRAs can vary greatly in design, dollar amount, and services. Employers should be fully aware of all the complexities that the HRA has to offer. Should your questions not be answered here, please contact OCA directly.
Can the HRA allocation be set up on a 4-tier structure?
Can owners or partners participate in an HRA?
What is the tax benefit for me as an employer?
Are high-deductible health plans required in order to offer an HRA?
Is there a tax benefit for my employees?
Do employers have to contribute the same amount to every employee’s HRA?
Still have questions?
Ready to Make a Change?
We’d love the opportunity to showcase how we can help with your commuter benefits program!