Health Reimbursement Arrangements (HRAs) Pacific Benefits iFlex 105 Presents
Health Reimbursement Arrangements (HRAs ) What You Will Learn What is a Health Reimbursement Arrangement (HRA)? Advantages of HRAs for Employers/Employees The Benefit of This Plan Utilizing Your HRA Funds Claims/Reimbursement Methods
What is a Health Reimbursement Arrangement (HRA)? Health Reimbursement Arrangements also known as HRAs, are funds that are provided by employers to reimburse employees for qualified medical expenses HRAs are one of the linchpins of Consumer Driven Health Care to combat the rising costs of health insurance premiums, for employers and employees alike The employer provides the funds, not the employees; the employer designates the HRA contribution amount and the Plan design HRA funds are tax free to employees A portion of the unused funds may be rolled over at the end of the plan year Because all monies in an HRA are employer funded, HRAs funds usually remain with the employer and do not follow an employee upon termination
Advantages of HRAs for Employers/Employees Advantages of HRAs for employers: Benefit Cost savings from using the plan Future cost savings can be planned for Qualified reimbursement claims are tax deductible for the employer. Employers know their maximum cost exposure and projected cost to provide a health care benefit. HRAs can be combined with another employer based health plan like a Flexible Spending Account (FSAs) to achieve greater cost savings. Advantages of HRAs for employees: Reimbursements are tax-free to the employee as long as the funds are used for medical expenses Some unused funds in the HRA may be rolled over the next year for reimbursement. Some HRA plan designs do not require the employee to be covered under a high deductible health plan Contributions made by the employer are excluded from employee’s gross income. HRAs can be tailored to meet the employee’s needs or to their families’ specific needs for a particular benefit
The Benefit of This Plan Your HRA Plan Runs: mm-dd-yyyy to mm-dd-yyyy Your employer will contribute these amounts into a HRA: Single: $ xxx.xx Family: $ xxx.xx Some HRA Plan Designs Specific Benefit Payout Design: Your HRA will cover specific benefits in full HRA Employee First - Payout Design: Employee to pay set portion of deductible before employer funded HRA will pay for eligible expense. HRA Shared - Payout Design: You and your employer split the costs for eligible expenses as each medical claim is incurred for the HRA limit. HRA Employer First - Payout Design: Employer to pay for eligible expenses in HRA funds first. Employee to pay any remaining balance, may be paid out of Flex Spending Account
Utilizing Your HRA Funds with Pacific Benefits iFlex 105 With the HRA plan the employer sponsors, employees can start utilizing their employer funded HRA accounts right away. If the employer offers pre-tax flex spending account (FSA); employees may elect to participate by setting aside pre- tax dollars for eligible expenses not covered by their HRA account. iFlex 105 will be assisting employee needs and questions about their account balances.
Claims/Reimbursements How do I pay for out-of-pocket medical expenses? Most plans will have the iFlex 105 debit card and you will use this at point of sale, as you would use a credit card with no out of pocket outlays In addition, your plan may offer Direct Deposit and Paper Checks as alternative methods of reimbursement
Sample Savings from iFlex 105 Cost Summary Present Plan Premium $ 226,860.84 New Plan Premium $ 91,392.00 Gross Savings $ 121,689.96 Employer Savings $ 60,404.40 Employee Savings $ 61,285.56 Total Savings $ 121,689.96 Risk Variance100% Claims50%22% (Expected) Employer Savings: $ 6,204.40 $ 32,304.40 $ 46,920.40 Proposed Rate Increase on Present Plan:15%20%25% Total New Premium on Present Plan: $ 260,889.97 $ 272,233.01 $ 283,576.05 Total Premium on New Plan $ 91,392.00 Gross Savings $ 169,497.97 $ 180,841.01 $ 192,184.05