Health Reimbursement Arrangements, also referred to as Health Reimbursement Accounts, are IRS sanctioned, tax-advantaged employer owned and maintained benefit plans that reimburse participating employees for out of pocket medical expenses and health insurance premiums. The employer maintains complete control of the plan operating within IRS approved guidelines. Employees do not contribute to these plans.
Employees benefit by receiving first dollar coverage on all qualifying expenses up to plan maximums, established by the employer. These arrangements are normally established in conjunction with an employer's decision to offer a High Deductible Health Plan (HDHP) option for employees who do not expect to utilize the benefits of their health plan, but want protection primarily for unforeseen catastrophic costs. These plans cost employers significantly less money, so employees have lower premiums; however, benefits under the plans are not payable until the higher deductible is met. By comparison, a traditional plan would have a higher cost and higher premium deductions for the employee with benefits under the plan paying out sooner due to the lower annual deductible.
Employers benefit by garnering greater control of their health plan costs with the flexibility to annually adjust funding arrangements, with tax deductibility of reimbursements for qualifying employee healthcare expenses, and most importantly, by experiencing cost savings up to 30% without changing servicing providers or carriers. Alliance Insurance Group fully manages the process via the Alliance HRA Benefits Card making implementation, participation, and administration secure and convenient. Employees have immediate access to "pre-funded" benefits cards for use on qualifying expenses without the need for filing reimbursements, while employers have the peace of mind knowing full support for claims adjudication and direct deposit of necessary reimbursements is handled completely by Alliance Insurance Group.
As an alternative to trimming back or discontinuing benefits, or asking your employees to assume more of the cost responsibility, find out how an HRA can work for you. Please contact one of our Employee Benefit Consultants. We’d be happy to provide an illustration. Just call.