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Health Reimbursement Arrangements Health reimbursement arrangements, also known as HRAs, are one of the newest health care options offered by take care. Health reimbursement arrangements are designed to provide employees greater flexibility, freedom of choice and cost control over their health plans. To that end, they have become an increasingly popular option over the short period of time they have become available. What Are Health Reimbursement Arrangements? Health reimbursement arrangements are extremely similar to FSAs and MSAs, but with a few notable differences. Instead of forfeiting whatever money is left over in one's account (as with an FSA), the unused money is rolled over for use in the following year. Additionally, HRAs are provided by employers for use by their employees (as opposed to MSAs that are owned by the employee). As opposed to both FSAs and MSAs, in which money is placed into an account for medical expenses, an HRA is an unfunded benefit plan provided by the employer. It is not an account, as medical expenses are refunded via an employer's general assets. Nevertheless, the employer does have the option of establishing a bank account instead of holding the money in assets. There are a number of advantages that come with the use of health reimbursement arrangements. First, employees can take advantage of the lower rates for care that are typically afforded to larger groups. They also allow individuals to accumulate money for future medical expenses, including retirement health care. Finally, they also allow employees to select a high deductible health plan and allocate their savings to the health reimbursement arrangement for future expenses. |
Additional Topics Consumer-Directed Health Plans Consumer-Driven Health Accounts Dependent Care Flexible Spending Accounts Flexible Health Spending Accounts Flexible Medical Expense Accounts Health Care Flexible Spending Accounts IRS Section 125 Cafeteria Plans Medical Expenses and Income Tax Plan for Medical that Health Insurance Doesn't Cover Save 25% to 40% on Health Expenses Save on Co-Pays and Over-the-Counter Medications Save on LASIK and Orthodontic Costs Section 125 Plan Administration |
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