-
Stand-alone HRAs
- Integrated HRAs
Stand-Alone HRA
A stand-alone HRA is not linked to a group health insurance plan. Rather, the stand-alone HRA is the company's health benefit. With stand-alone HRA:-
The company provides employees a fixed monthly allowance for health insurance premiums and other eligible medical expenses.
-
Employees purchase their own individual health insurance premiums (often with the help of a broker or agent).
-
Using HRA Software, employees submit their expenses and the company
reimburses them tax-free on payroll, up to the amount available in their
HRA balance.
To summarize, generally with a stand-alone HRA:
-
No group health plan is offered.
-
The stand-alone HRA reimburses individual health insurance premiums, and other out-of-pocket medical expenses.
-
Allowances are given monthly and often there is some rollover of unused funds year to year.
Integrated HRA
An integrated HRA is the more commonly-known type of HRA. An integrated HRA is linked with a high deductible group health insurance plan. The integrated HRA is offered only to those at the company who take the group health insurance plan, because it is a supplement to help employees with their deductible costs.With an integrated HRA, usually a company has a group health insurance plan in place, but is looking to lower the cost while keeping employee's coverage (risk) the same.
-
First, a company would purchase a high deductible health plan to
achieve savings with lower premiums (for example, from a $500 deductible
to a $2,500 deductible).
-
Second, they would offer an integrated HRA to cover the difference
between the old and new deductible (in this example, $2,000 annually).
To summarize, generally with an integrated HRA:
-
A high-deductible health plan (HDHP) is offered.
-
The integrated HRA reimburses out-of-pocket medical expenses, often just deductible/co-insurance expenses related to the HDHP.
-
Allowances are given annually, and there is no rollover of unused funds year to year.
0 comments:
Post a Comment