What is an HRA Plan?
An HRA Plan is an effective and simple way for an employer to take control of employee health care benefit costs. This is a 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 eligible health care expense. By offering an HRA 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, and the administrative costs are tax deductible.Once an employer establishes an HRA Plan, there are two plan design options: Medical Expense Reimbursement HRA (Comprehensive HRA), or Partial Self Funding HRA (Basic or Extreme Bridge HRA).Download the HRA Flyer Here.
Medical Expense Reimbursement HRA (Comprehensive)
The employer has an account set up for each eligible employee. The account is then funded with a fixed amount of employer only dollars to pay for eligible expenses incurred by plan participants. When an expense occurs, the employee submits claims to Advantage Administrators, and we release funds based on the plan design. Common expenses include Co-pays, prescriptions, doctor’s office visits, and other regular medical expenses. The employer has the option to make HRA funds available all at once or in equal portions periodically throughout the plan year. The employer maintains control of any unused 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. This type of account MUST be set up in conjunction with group insurance.
Partial Self-Funding HRA (Basic and Extreme Bridge)
The employer usually purchases a High Deductible Health Plan (HDHP). The employer then partial self-funds the account to a lower deductible, out-of-pocket maximum or other plan design. The employer receives a savings on their premium versus a regularly priced plan at the same benefit level. A portion of those savings are then used to help cover employee’s medical expenses. Advantage Administrators receives the insurance carrier’s Explanation of Benefits (EOB), and then issues a second EOB that explains the employee’s actual financial responsibility and releases payment when necessary based on the plan design. This type of account MUST be set up in conjunction with group insurance.
A Basic Bridge example would be an employer purchasing an insurance plan with a $5,000 Single/$10,000 Family Deductible. The employer then partial-self funds the plan to a $2,500 Single/$5,000 Family Deductible. The employee pays 100% of the first $2,500 Single/$5,000 Single. Advantage Administrators would then pay on the employer’s behalf 100% of the next $2,500 Single/$5,000 Family until the $5,000 Single/$10,000 Family Deductible was met. The regular insurance conditions would then become effective again. Advantage Administrators issues employees EOB’s explaining their expenses and would also request any funds from the employer that were paid on the employer’s behalf. An Extreme Bridge would be any plan design more complex than this example.
- Any administrator can propose a plan, but we take our administration the extra mile for you and your employees by providing superior customer service. Advantage Administrators provides the following services for our HRA Plans.
- Documents – SPD, Plan Document, and required notices and forms
- On-Site Employee Education and Participant Enrollment
- Claims Administration
-Claims submission via Online Portal, E-mail, Fax, Mail, Drop-Off or Insurance Company Drop-Downs
-Reimbursements claims are processed daily
-Employer pays claims by “Convenience Pay”
-Reimbursement by Check
-Notices of quarterly statements
-Issuance of Advantage Administrators’ EOB
- Employee Account Access
-Available 24/7/365 via Online Portal
-Customer Care Department Open Mon-Fri 8:00-5:00
- Discrimination and Compliance Testing and Form 5500 if required
- Plan Amendments
-Required by Law – Free of Charge
-Employer Requested – Nominal Fee
- Legal and Legislative Issues
-Special Memos, Seminars and Roundtables as required.
Legacy HRA Administration Forms
Click Here to Enter Legacy HRA Administration Forms