Health Reimbursement Accounts (HRAs) are employer health benefit plans with many monetary perks:
- IRS Sanctioned
What does all that jargon mean? This account comes with every advantage possible to help your employees use their money wisely. You may also have heard these accounts referred to as Health Reimbursement Arrangements.
Health Reimbursement Accounts yield tax advantages that offset health care costs for both employees and their employers. These plans will reimburse employees for out-of-pocket medical expenses and health insurance premiums.
What types of medical care is covered under an HRA?
The specific medical expenses that are covered will vary based on the actual policy we choose together for your business. Typically coverage includes: individual or family health insurance premiums, doctor visits, prescriptions, hospital expenses, and some mental health care.
How do the payments work with this type of plan?
As an employer, you would provide a monthly (or sometimes annual) HRA allowance to your employees for medical expenses. The employee would still pay for health insurance and/or out-of-pocket medical expenses, then submit those medical expenses to you for tax-free reimbursements up to the balance of the HRA allowance.
How does my company benefit from providing health reimbursement accounts to our employees?
Health Reimbursement Accounts allow you as a business owner to save on the rising cost of providing health insurance to your employees. Rather than providing expensive one-size-fits all health benefits, you can offer tax-free funds that allow your employees to make their own health care choices. Think of it as a business expense account for health care.