[1945010?] a common question we get from small employers is "can we still use health Reimbursement Arrangement (HRA) to repay employees for health insurance?
the answer is, it depends. This article discusses when an HRA may be used for individual repayment of health insurance. We will HRA also cover alternatives to help with employee health insurance costs.
what is an HRA?
if you're unfamiliar with an HRA, here's a quick overview. an HRA is a health plan funded by the employer used to reimburse employees for medical expenses out of pocket and bonuses Medicare tax free.
CRH are very flexible. For example, the employer can decide which types of medical expenses are reimbursed and if the year working capital in the year. CRH can be offered in combination with a group health insurance policy or as a benefit to the independent health in certain situations.
HRAs In the past, self were widely used by small businesses to reimburse individual health insurance premiums, as an alternative to traditional health insurance coverage
Related: simplified autonomous CRH - How do they
[1945006?] So, can we use an HRA yet to reimburse employees for health insurance?for most employers, the answer is no.
Under the Affordable Care Act (ACA) reforms, an HRA may not be used for insurance premiums. There are, however, some exceptions.
We will discuss further reforms, and exceptions, next.
What new Impacting HRAs reforms?
Simply put, all group health plans, including CRH, must comply with the new ACA reforms. Under the ACA "market reforms", group health plans must - among other things - not place an annual limit or lifetime on essential health benefits
with an HRA, the employer provides a set. allowance for employees to spend on health care. There is a limit to how much an employee can receive, so by definition, an HRA places a limit on essential health benefits.
When May an HRA Be Used to Pay Medicare?
There are two "types" of CRH that are exempt from market reform. If you offer an HRA in these circumstances, the HRA can still pay Medicare premiums:
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Retired CRH (an HRA only offered to retired employees )
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a stand-alone CRH person (an HRA with one participant in the plan)
It may also be worth noting that an integrated HRA is always a type compliant HRA. However, an integrated HRA is not used to pay the insurance premiums. An integrated HRA is offered along with group health insurance coverage and reimburses medical costs not covered by the insurance plan.
For more information on CRH in 2015 download this free eBook.
If not an HRA, then what?
If an HRA is the right solution to help employees to their members individually purchased health insurance, what is? The medical expense reimbursement plan most commonly used is a medical reimbursement plan, or HRP.
A HRP is an attractive tax benefit financed by the employer to reimburse employees for health insurance premiums. It is also designed to comply with the new rules of the Affordable Care Act. HRP is a type of section 105 Self insured medical reimbursement plan.
Conclusion
With new health reforms, CRH can not be used to reimburse individual health insurance - mostly employers.
Does this change in the near future? is possible. Last week, new legislation (the Small Business Act Relief Healthcare ) was introduced. If passed, CRH may again be a viable solution for health insurance and reimbursement of medical expenses.
What questions do you have on CRH and reimbursement of individual health insurance? Leave a question below and we'll help you answer.
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