The Benefits of Health Reimbursement Arrangements (HRAs)

Health Reimbursement Arrangements or HRA’s allow employers to fund accounts for employees to assist in paying for medical expenses not covered by insurance. In contrast to HSA and FSA accounts, only employers may contribute to these accounts for employees.

HRA accounts provide numerous benefits for the employers. HRA accounts paired with a high-deductible insurance plan can reduce the expenses spent on healthcare for your employees. By selecting what benefits the HRA account can be used for, employers are able to target better benefits for employees. For employers, any unused funds contributed to HRA accounts can cycle back to the company at the end of the year, or roll over to the employee to a following year. Offering an HRA account also provides more value to the employees by providing any additional funds for healthcare expenses

For employees, with a high-deductible health plan and HRA, the employee does not need to worry about costly premiums and has the flexibility to use these extra funds for their healthcare expenses. Employees can select where and when these funds will be used, so they can shop for the best prices for healthcare expenses.

There are four HRA plan design options that exist for employers to provide their employees:

Bridge Plan: coincides with a high-deductible insurance plan and can be used only for deductible items covered by insurance.

Comprehensive Plan: can be used for all medical expenses not covered by insurance. This could be paired with a high-deductible insurance plan or stand-alone.

Limited Plan: covers a group of expenses (such as vision or dental) or could only pay for a single expense such as prescriptions.

Insurance Only Plan: allows employees to pay for insurance coverage provided by their employee, individual insurance plans or long-term care insurance plans.

TPA Stream is building tools to make managing health data easier for administrators, brokers and employers. Our first offering is focused on attacking pre-tax health accounts, such as HRAs. Our proprietary cloud-based platform collects claims data and EOBs automatically on behalf of employees and then electronically sends the data to the administrator’s benefits administration software for reimbursement and substantiation with little or no human intervention! As a result, administrative costs are significantly reduced and employees avoid the hassle of submitting claims.

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