Health Reimbursement Arrangements (HRAs)
Click to listen and learn about HRAs
The HRA or health reimbursement arrangement, which evolved from IRS Code
Section 105 is one of the latest tax strategies available to small businesses to
control healthcare costs.
The HRA enables the employer to choose a health plan that covers the BIG expenses while the employer provides coverage for some of the smaller costs through the HRA --only after the employee actually incurs the costs. The end result is a win/win situation for the employer and the employee. There is no change in benefits (or sometimes even INCREASED BENEFITS) for the employee and DRAMATIC SAVINGS ( up to 50%) for both the employer and employee. The employer enjoys a 100% tax deduction each time an eligible expense is reimbursed to an employee and the employee gets his healthcare expense "covered".
Health Reimbursement Arrangements (HRA) Info
One tool we use to do this is called a Health Reimbursement Arrangement (HRA) which is based on the IRS Code Section 105. It enables you to substantially lower your health insurance costs by choosing a high deductible plan WHILE CONTINUING TO PROVIDE YOUR EMPLOYEES WITH THE SAME HMO LEVEL OF BENEFITS by simply reimbursing them for all or part of the deductible IF they should need it.
Savings realized by choosing a higher
deductible plan generates more than enough savings to reimburse employees with
usually substantial amounts left over.
Watching this money accumulate gives you a feeling of empowerment and control over the financing of your healthcare when your rate increase arrives and you know that you have enough money saved to easily be able to handle a higher deductible which will keep your insurance premiums level.