Health Reimbursement Arrangements

Health Reimbursement Arrangements (HRAs) are a popular method of helping employers control health insurance costs while providing choice to employees. Typically, an HRA is used in conjunction with a less expensive higher deductible or co-pay health plan. With an HRA, employers can set aside money for each employee to pay for health care expenses.

Features of an HRA:

  • HRA funds used by employees are tax deductible to the employer
  • HRA funds are tax- free to the employee
  • Gives employees choices
  • Creates awareness of the cost of health care
  • Implementation of an HRA with a higher deductible health plan will reduce costs

 Advantages of a Choice Strategies HRA:

  • Flexibility: Employers design the HRA that works best for their employees while meeting their cost savings goals
  • There is no pre-funding requirement – an HRA is a pay-as-you-go plan
  • Unused funds can roll over at the employer’s discretion
  • Utilization rates can be controlled through a custom plan design
  • Provides the employer with a long term health care plan strategy
  • New employer trainings
  • Employee trainings
  • Employers receive their own Client Service Representatives to help them with their plan
  • Employees can contact Member Service Representatives with questions
  • Employees can create their own online account to view balance and account information
  • Employers receive electronic access to Plan Documents, Invoices and other administrative plan information

Employers can choose for the HRA to reimburse any of the following eligible expenses:

  • Code 213(d) medical expenses
  • Medical deductible expenses
  • Co-pays
  • Co-insurance
  • Prescription expenses
  • All IRS expenses
  • Over-the-counter expenses (OTC medicines require a prescription)
  • Dental expenses
  • Orthodontia expenses
  • Vision expenses
  • Any combination of the above

For more information on HRAs, visit the FAQ pages of our website.

Please click here for a one page handout describing the Health Reimbursement Arrangement.