NEW YORK, Aug. 31, 2018 /PRNewswire/ -- HRA administration company, Clarity Benefit Solutions, shares nine FAQs about HRA plans.
A Health Reimbursement Account (HRA) in a pre-taxed, IRS-approved health benefit plan that reimburses employees for out-of-pocket medical expenses and individual health insurance premiums. Here are some frequently asked questions about HRAs.
Who pays for an HRA? An HRA account is funded by the employer, typically first dollar medical coverage until the funds are exhausted or insurance coverage kicks in. The employer also sets the contribution amount.
When is the HRA funded? An HRA's funding varies depending on the plan. It may be funded monthly, quarterly, semi-annually, annually—or by claim.
What is an HRA eligible expense? Expenses that are covered under an HRA must comply with IRS regulations and are determined by the specific plan setup. Typical HRA-reimbursable expenses include deductibles, copays, and prescriptions.
Who contributes to an HRA? Since HRAs are funded solely by the employer, employees are not allowed to contribute to these accounts. Plus, they are not included in an employee's gross income.
What are an HRA's annual contribution limits? The employer determines both the plan setup and annual contribution limits. The government does not limit contributions.
What types of expenses are not covered under and HRA? There are many expenses that are ineligible for reimbursement. Some examples are: childcare, babysitting, or nursing services for a healthy baby; cosmetic services or procedures not related to illness or disease such as hair removal/transplants, elective breast enlargement, or teeth whitening; diaper services; gym membership; and over-the-counter drugs and medicines.
If an employee leaves the company, where do the funds go? Since an HRA is employer-owned, employees are not permitted to keep any remaining funds when they leave the company.
Are HRAs the same as health insurance? HRAs do not serve as health insurance. Rather, they are paired with an employer's health insurance. Additionally, health insurance premiums cannot be paid with HRA funds.
Can an HRA link to a debit card? Many plans link an HRA plan to a benefits debit card, which can be used to pay for items such as prescription drugs and copays.
About Clarity Benefit Solutions: Clarity Benefit Solutions HRA Company provides technology that makes the health insurance plan selection process fast, easy, and straightforward. For over two decades, we have provided clients with industry-leading technology, compliance, and exceptional customer service. Our offering is designed to save time and lower the costs of managing benefits while also promoting employee self-service and automated ACA compliance.
SOURCE Clarity Benefit Solutions