Tools to improve the financial health of your employees.
Health Reimbursement Accounts are employer-funded plans that provide employees with money
for out-of-pocket medical expenses. These plans are very flexible and can help you accomplish
Many employers find that increasing deductibles can reduce premiums, but that increases employees'
out-of-pocket costs. Taking all or part of the employer's savings in premiums and using
this money to fund HRAs can offset the higher deductibles. The savings can be significant
and many employers have found that future insurance rate increases are lower than in past years.
This is largely due to the effect of "consumerism". The employee tends to view the money in the
as his or hers, and therefore generally makes wiser decisions when choosing to use the medical benefits.
You can also use HRAs to reduce employee turnover. Any unused money in these plans can roll forward
from year to year, if you choose this option, so funds can accumulate. They can even be used after
retirement, if desired. This feature encourages employees to remained employed to assure
continued access to these funds.
There are many other ways the HRA plans can enhance your benefit program. The best design for your
organization is determined in the implementation planning session.
These special Flexible Spending Accounts are designed to work with Health Savings Account
(HSA) plans that many employers now offer in conjunction with a High-Deductible Health Plan
(HDHP). Limited-Purpose Flexible Spending Accounts (LPFSAs) only cover dental, vision and
hearing expenses. The rules governing the Heallth Savings Accounts do not allow the LPFSAs to
cover medical expenses.
If you offer employees a choice of medical plans, with and without HSAs, you should consider
offering both the LPFSA and the standard FSAs. The employees participating in the
HSA plan can choose the LPFSA and your other employees can choose the standard FSAs that
also cover medical expenses. These is no additional cost to offer both styles of FSAs.
In either case, you may also offer Dependent Care FSAs for employees with work-related day
When should you provide HRAs?
Health Reimbursement Accounts are appropriate if:
You are increasing the medical plan deductible and/or copayments
You do not offer a dental or vision plan
You have dental or vision plans but they require high out-of-pocket expenses
You want to improve employee retention
What if we are a small employer?
The BenefitsWorkshop offers a number of unique options that make these plans affordable
even if you have ten or fewer employees.
How can I order a proposal?
Simply click the button below and complete the form. You should receive your proposal within 48 hours.
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