Benefits Management Brochure – Business-to-Business - Employee

Concepts, design direction and copywriting.

HRAs – Health Reimbursement Arrangements

What are HRAs?

1. HRAs are Health Reimbursement Arrangements
2. HRAs are authorized under Section 105 of the Internal Revenue code
3. HRAs are employer-funded reimbursement accounts
4. These accounts offer better employer control over health care costs
5. The accounts offer choices for employees, with patient-directed features
6. HRAs were clarified by IRS Revenue Ruling 2—2-41 and Notice 2002-45 released 7/15/2002
7. HRA reimbursements are not taxed to employees
8. These accounts may allow employees to carry forward unused dollars

How do HRAs work?
With an HRA, an employer can implement a higher deductible medical plan which can lower premiums.  The medical plan premiums saved can be used to fund the HRA.  HRAs do not provide advance payments to employees.  Employees can be reimbursed tax-free for substantiated medical expenses.  HRAs, as explained by Diversified Benefit Services, Inc., are easy for employees to understand and use.  HRAs must have a plan document.  Numerous plan design options exist.