Health Reimbursement Arrangements

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Health Reimbursement Arrangement (HRA)

A Health Reimbursement Arrangement (HRA) is an IRS-approved, employer-funded, tax-advantaged benefit plan that is used to reimburse employees’ qualified medical-related expenses. The rising cost of healthcare is a concern for most employers. With the addition of an HRA, employers can enhance and customize their benefit package while still achieving their overall corporate goal of lowering health benefit costs or capping costs at their current levels. A few of the customizable features of an HRA include contribution amounts, eligible expenses, whether funds roll over and when and how funds become available. An HRA gives employers more choice on how much to spend on benefits and how benefits are delivered. Employees have been asking for more choice, and employers need a break on benefit expenses. An HRA is a great way to meet employees’ needs and boost employers’ benefit packages.

Medical Expense Reimbursement Plan (MERP)

A Medical Expense Reimbursement Plan (MERP) is a type of HRA under which a business reimburses an employee for out-of-pocket medical expenses incurred by employees or their dependents. MERPs can be utilized for portions of health plan deductibles, coinsurance or copayments, as well as to cover the costs of qualified medical expenditures for uninsured health or accident expenses. MERPs are typically used in combination with high deductible plan designs, giving the employer flexibility to create any plan design they wish so it aligns with their overall benefit strategy. Due to health insurance costs rising at an exponential rate, implementing this program is a great strategy to lower the cost of healthcare without reducing coverage for employees.

Qualified Small Employer HRA (QSEHRA)

In 2017 the IRS approved a new type of HRA known as the Qualified Small Employer HRA (QSEHRA). This plan allows employer groups with under 50 employees, with no medical plan offering, to provide an HRA option to their employees to help offset healthcare costs! Unlike traditional HRA or FSA plans, QSEHRAs can be set up to reimbursement employees for plan premiums. Employers eligible for this plan must be covered by a medical policy that meets the minimum coverage guidelines required by the Affordable Care Act. Limits to the QSEHRA may change each every; however, in 2019 businesses can offer up to $429.17 per month for single employee coverage or $870.83 per month for family coverage. Employees may use these funds to purchase insurance, prescriptions or even to reimbursement copays and deductions.

Frequently Asked Questions

Can the business owner participate in the plan?

In most cases, the answer will be yes, as long as the owner is considered a W2 employee.

What types of expenses are eligible under the plan?

In general, 213D expenses are eligible. Some of these include prescription medications, copays, insurance premiums for dental and vision, as well as health care premiums.

Do we need a plan document?

A Summary Plan Description must be prepared to remain in compliance with IRS guidelines.

The FBA Difference

Benefits Card
The Benefits Card is a convenient option to offer participants to reduce out-of-pocket costs.

Data Processing
Our IT Department has the ability to accept and process data through a multitude of methods.

Administration of HRA
FBA works hand-in-hand with your company to provide services your employees will come to depend on for years.

Educational Trainings
Our clients receive education and training sessions for employees and benefits staff.

Customer Service
You will have a dedicated Benefits Team to administer all account aspects for the duration of the contract.

Our Marketplace

FBA has partnered with FSAStore and HSAStore, the one-stop shop for all things FSA and HSA!

Customized Communications
We provide customized communication materials to maximize participant opt in.

Technological Advancements
Our Secure File Transfer Protocol website and mobile application makes managing benefits easy!


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