There are many ways employers can provide healthcare for their employees. Besides traditional group health insurance policies or Health Savings Accounts (HSAs), they could also choose to reimburse employees for qualifying healthcare costs. Here’s what you need to know about Health Reimbursement Arrangements in Reno, Nevada.
What is a Health Reimbursement Arrangement (HRA)?
A Health Reimbursement Arrangement (HRA) is an employer-funded healthcare plan that gives money back to employees for qualifying medical expenses. The employees pay the healthcare costs up front, and they’re reimbursed through the employer’s HRA fund at a later date.
The 3 main types of HRAs
To suit a variety of needs, there are three different types of HRAs that employers may choose:
Qualified Small Employer Health Reimbursement Arrangement (QSEHRA)
Quite the mouthful, but this type of HRA is for businesses with fewer than 50 employees. The money added to the HRA by the employer is tax-deductible, and anything reimbursed to employees is tax-free to cover larger medical costs. Employer contribution limits are set by the IRS.
Individual Coverage Health Reimbursement Agreement (ICHRA)
Rather than participating in a group policy, Individual Coverage Health Reimbursement Arrangement (ICHRA) plans allow employees to use the HRA funds to pay for their own individual health insurance premiums. Employees can choose to find their own health insurance plans or use the Health Insurance Marketplace.
In addition to paying for insurance premiums, ICHRAs can also be used to pay for qualifying medical costs, just like a standard HRA.
Excepted Benefits Health Reimbursement Arrangement (EBHRA)
Employers who offer traditional group health insurance plans for their employees may also choose to provide an Excepted Benefit Health Reimbursement Arrangement (EBHRA).
With an EBHRA, employees can choose to opt out of the regular group health insurance policy provided by the employer to use the HRA funds to get reimbursed for qualifying medical expenses. They cannot, however, use the HRA funds to pay for their own individual long-term health insurance premiums.
Tax benefits for both employer and employee
One of the main reasons employees and employers choose Health Reimbursement Arrangements in Reno is because of the tax benefits. Employers enjoy tax deductions on all the money they contribute to the HRA, and in many cases employees can enjoy tax-free reimbursements.
No matter which way the money is going, HRAs help alleviate some of the taxes, keeping more money available to pay for the ever-climbing cost of healthcare.
More healthcare options for employees
Although it might not be a traditional health insurance plan, HRAs can be used to pay for qualifying medical expenses — and there many expenses qualify, including:
- Prescription medication
- Procedures and exams
- Birth control
- Insulin
- Annual physicals
- Mental health services
- Meals and transportation at a medical facility
- And much more
Depending on the type of HRA the employer chooses, employees may also use the funds to purchase their own individual health insurance plans that could increase their coverage even more.
The list of covered expenses are set by the government and may be adjusted further by the employer. Always remember to check that an expense is covered by your Health Reimbursement Accounts in Reno before paying for any healthcare expense.
How to use HRA funds
Health Reimbursement Arrangements in Reno are easy to use. And there are a few ways employees can access the HRA funds:
- Employer can reimburse the provider directly.
- Employee pays for costs with a card that’s connected to the HRA account.
- Employee pays the provider directly and submits for the reimbursement.
Unlike a Health Savings Account (HSA), only employers can contribute to an HRA. The IRS sets limits on the amount of money employers can contribute to the HRA annually.
Learn more about Health Reimbursement Arrangements in Reno
Do you think Health Reimbursement Arrangements in Reno are right for your business, or are you thinking of signing up for one at work? The best kind of decision is an educated decision!
The health insurance experts at Health Benefits Associates are here to answer all your questions. We’ll help you find the right healthcare plan to suit your unique situation. Contact us today to learn more about your coverage options.
