HRA Advantage
What is an HRA Advantage Plan?
HRA Advantage is an effective and simple way for an
employer to take control of employee health care benefit costs. A Health
Reimbursement Arrangement (HRA) is a type of medical reimbursement plan that
allows the employer to contribute tax-free dollars to designated employee
accounts. These HRA dollars can be used to pay for any or all of the same
expenses as a Health Savings Account (HSA) and a Flex Advantage Plan. Unlike an
HSA, employer health care dollars can only be used for health care
expenses.
By offering an HRA Advantage Plan, employers will be
able to lower insurance costs when the plan is combined with a higher
deductible health insurance plan. Employers have the ability to fine-tune their
employee benefits plan. The administrative costs of an HRA Advantage Plan are
tax deductible, and these plans also compliment Flex Advantage Plans.
Once an employer establishes an HRA Advantage Plan,
the Plan will pay for eligible expenses incurred by plan participants
(employees and their dependents). The employer has the option to make HRA
Advantage funds available all at once or in equal portions periodically
throughout the plan year. Employers maintain control of any unused HRA
Advantage dollars and can allow participants to carry over all or part of those
unused dollars to the next year (rollover) or have unused balances forfeited at
the end of each year.
HRA Advantage Plans are available to
“Employees” of a plan sponsor, as defined by Section 401(c) of the
Internal Revenue Code. Therefore, sole proprietors, general
partners of a partnership, and more than 2% shareholders in a Sub-Chapter S
Corporation are excluded from participating in an HRA Advantage
Plan. However, spouses, children, parents, etc. of an owner may
be eligible if the business is a partnership or a sole proprietorship, and the
spouse, child or parent is a bona fide employee, but not if the business is a
Sub-Chapter S Corporation.
Benefit Options for HRA
Advantage Plans
Expenses that are not covered by the employer’s
group health insurance plan can be reimbursed through the HRA Advantage plan.
These benefits can also be limited to only reimburse specific categories of
expenses.
- Insurance co-payments and deductibles
- Prescription Drugs
- Over-the-Counter medicines (when a Letter of
Medical Necessity is provided)
- Dental care expenses
- Vision care expenses
- Individual Major Medical Health Insurance
Premiums
HRA Advantage Plan Design Options
- Premium Advantage Plans provides a comprehensive
benefit plan that is an FSA and HRA compatible combination.
- Basic Bridge Plans reimburse only health insurance
plan deductibles and/or coinsurance at a single benefit level. It provides a
“bridge” between the out-of-pocket expenses of a low deductible
insurance policy and the higher out-of-pocket amounts of a premium saving high
deductible policy.
- Extreme Bridge Plans are at their core, similar to
Basic Bridge Plans. The Extreme Bridge Plan can reimburse deductibles,
coinsurance and copayment amounts along with multiple benefit levels for
different classes of expenses and/or different employee groups.
- Hybrid Bridge Plans are used with a High
Deductible Health Plan (HDHP), normally used with a Health Savings Account. The
Hybrid Bridge Plan allows the employer to choose the participant’s
deductible and coinsurance percentages and ensures that health care dollars are
only spent on health care expenses.
HRA Brochure
Premium
Advantage Brochure |
