Health Reimbursement Arrangement
When an employer augments a benefits package with an HRA, it sends a strong message to employees that their employer cares about their health and well-being, and it helps employers attract and retain staff. Benefits for employers and employees include:
- Control - Employers decide how much to contribute and what medical expenses the funds can be used for. Employees control how best to spend their healthcare dollars.
- Tax savings - Employer contributions are tax-deductible, lowering their payroll taxes. Funds are also tax-free to employees, so they don’t increase their income tax burden.
- Flexibility - Employers choose whether to allow funds to carry over each year. And the money stays with the organization when employees leave.
- Productivity - Healthy and happy employees are more engaged in their work and are better for the employer’s bottom line.
Plan Design Options for an HRA @TextFields.Render(Model.Headline1Type,>
- Contribution Schedule – Funds can be made available up front or on a monthly basis.
- Reimbursable Expenses – The HRA can either reimburse all 213d expenses, only what is covered under their health plan, or specific subsets like pharmacy, dental, and vision.
- Order of Reimbursement – The HRA can reimburse first dollar or after the employee pays for a defined amount of reimbursable expenses.
- Rollover – Unused HRA dollars can be rolled over to the next plan year, based on a flat dollar amount or percentage.
How it Works @TextFields.Render(Model.Headline2Type,>
When employees incur IRS-qualified medical expenses, they submit claims for reimbursement from their HRA. All claims have to be substantiated or verified as an eligible expense. Submitting claims can be done online, on our mobile app, or by mail. Having a debit card with the HRA provides easy access to HRA dollars, especially at pharmacies and doctors’ offices.
Why We Ask for Substantiation @TextFields.Render(Model.Headline3Type,>
- The date of service or purchase;
- The name of the provider, such as a doctor’s office or pharmacy;
- The service or item purchased; and
- The amount the employee paid or is responsible for paying.
Debit Cards and Receipts @TextFields.Render(Model.HeadingType, editable: true)>
Document Services @TextFields.Render(Model.HeadingType, editable: true)>
As a service to employers, HSA Bank offers the faciliation of ERISA Plan Documentation as well as Non-Discrimination Testing for Health Reimbursement Arrangements.
ERISA Plan Documentation
HSA Bank can facilitate the generation and maintenance of the written Plan Document and Summary Plan Description for HRA plans. The Employee Retirement Income Security Act (ERISA) requires employers who offer welfare benefit plans to create these documents and provide them to employees. These documents are a crucial part of any benefit program offered by employer groups as they communicate the plan benefits and how each plan operates. All documents are stored electronically for later reference and include a date and time stamp of the original or any subsequent revisions.
HSA Bank can facilitate the Non-Discrimination Testing (NDT) for HRA plans. The IRS requires employers to perform NDT each year. The reason for NDT is to prevent key and highly compensated employees from receiving a disproportionate amount of employer provided tax-free benefits as compared to the rank-and-file employees. NDT is an important component of plan compliance. Failure of an employer to satisfy the nondiscrimination testing requirements or take the necessary corrective measures can result in the inclusion of the discriminatory benefits in the income of highly compensated employees.