Looking for a new way to control benefit costs? 

An HRA in Brief
A Health Reimbursement Arrangement (HRA) is an employer-funded account that can be used for any substantiated Section 213 medical expense, including deductibles, coinsurance, copays and other cost sharing as defined by the IRS.

An employer presets the amount of contribution and can set it up with non-taxable dollars. This amount can be rolled over from year to year.

The HRA can be used for current employees, retirees, or both.

Unlike an FSA, the HRA can allow mid-year enrollments, and reimbursements can cross calendar or plan years.

HRA funds must be available for COBRA continuation on the same basis as other health plans. It cannot be tied to any salary reduction or deferred compensation program, including pre-tax salary reductions like the FSA.

Employees Can Benefit, Too
Employees can benefit, too, from an HRA:

• Employees gain more control over the allocation of their benefit dollars.
• Like a Flexible Spending Account (FSA), reimbursements are not considered taxable income.
• HRA funds can be rolled over from year to year, whereas FSA funds must be used within the same calendar year or forfeited.
• HRA can be set up so employees may use residual benefit dollars from the HRA upon termination or retirement and apply them toward future medical expenses.

Why Choose MedBen?
MedBen takes customary HRA administrative services and goes one step further.

To help ensure the HRA will generate the savings desired, we offer an extensive HRA Value Assessment. This initial evaluation provides an employer with estimated plan year savings based on various benefit design options. Once complete, the employer is equipped with the information necessary to make the best benefit decision – one that delivers the anticipated return on investment.

To keep HRA administration simple, MedBen provides on-line account tracking. In seconds, you can review current account activities, including balances and the status of claims. And, if an employer is linking the HRA to an FSA account, the on-line service provides account information for both.

With MedBen, you’ll have access to other services, like auto pay, electronic claims processing and a well-trained customer service department. We have the experience and technological know-how to effectively manage your HRA, whether offered on a stand-alone basis or in combination with a medical plan or FSA account.

Three Simple Steps to Implement Your HRA

Evaluate
MedBen offers a comprehensive assessment to help an employer determine what their savings potential may be.  It is also a vehicle to determine what type of benefit changes would be required to make an HRA worth exploring.  Our assessment tool can help you determine if an HRA is right for your company.

Redesign the Plan
Whether you decide to offer an HRA in tandem with a medical plan or all alone, plan design changes are probably warranted.

• In the stand-alone scenario, you may need to shift a benefit from the basic health plan into the HRA, such as a pharmacy benefit.  Or, you may decide to create an HRA for your vision or dental plans.
• If the HRA is tied to your medical plan, you will want to look closely at your current plan design.  You will save money if you shift benefit dollars from the health plan to the HRA through higher deductibles, copays and/or out-of-pocket maximums.
• Depending on how your plan is currently structured, you may want to consider adding an FSA to further shift benefit dollars.  If you do offer an FSA, you will need to decide whether the FSA or HRA will pay first.

MedBen, along with your benefits consultant, can work with you on the best redesign for you individual situation.

Create the HRA
Employers have a great many options when setting up and HRA.  Working through these options can become confusing.  MedBen has developed a planning tool to guide clients through this decision making process. It will help you to determine what plan design changes you want to make, how your HRA will be structured, and how the benefit funds will flow once the HRA is in place.

For more information about HRAs, e-mail our marketing department at marketing@medben.com.