Health Reimbursement Arrangement (HRA)
HRAs come in many flavors. At Kushner & Company, we tailor the appropriate HRA to each employer’s and their employees’ needs. An HRA can increase an employee’s health care coverage and at the same time reduce an employer’s overall health care costs. For all HRAs, only employers may contribute on an annual, monthly, or per-pay period basis. Employees may not directly or indirectly contribute to an HRA.
All HRAs work by allowing an employee, former employee, spouse, and dependents to submit health insurance premiums and certain unreimbursed health-related expenses, such as deductibles, coinsurance costs, or copays as allowed by the employer’s plan design. Any balance remaining at the end of the plan year can either be carried over or not depending upon the plan design chosen by the employer. The plan may require reimbursements are issued from the Healthcare FSA first, if applicable, before HRA funds are used.
All HRAs are subject to strict IRS rules and regulations, including certain nondiscrimination rules as well as which type of owners may or may not participate. Kushner & Company is well-versed in all of these and works with the employer to design the HRA that best meets the employer’s and employees’ needs as well as complying with these requirements.
In a traditional HRA, Kushner & Company assists the employer in designing the plan and determining how it integrates with the employer’s group health plan. Current law and IRS regulations require that a participant in an HRA also be eligible and enrolled in the employer’s group health plan. If so designed, the employee may receive reimbursements not only for herself but also for her spouse and dependents. For example, an employer could design the plan to reimburse only deductibles that are unreimbursed from any other group health plan, including the employee’s plan or spouse’s employer’s plan.