Health Reimbursement Arrangements, also referred to as Health Reimbursement Accounts, are IRS sanctioned, tax-advantaged employer owned and maintained benefit plans that reimburse participating employees for out of pocket medical expenses and health insurance premiums.

Employees benefit by receiving first dollar coverage on all qualifying expenses up to plan maximums, established by the employer.

These plans cost employers significantly less money, so employees have lower premiums. By comparison, a traditional plan would have a higher cost and higher premium deductions for the employee with benefits under the plan paying out sooner due to the lower annual deductible. Employers benefit by garnering greater control of their health plan costs with the flexibility to annually adjust funding arrangements, with tax deductibility of reimbursements for qualifying employee healthcare expenses, and most importantly, by experiencing cost savings up to 30% without changing servicing providers or carriers.

As an alternative to trimming back or discontinuing benefits, or asking your employees to assume more of the cost responsibility, find out how an HRA can work for you.

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