Until recently, small businesses who want to provide benefits for the health of employees have been limited to the implementation of a policy group health insurance . The small business owners know that this is often not a viable option. Cost, terms of employee participation, and the supplier network restriction are just some of the obstacles associated with group health insurance. 
As such, employers may consider providing an advantage in covering the health care costs of their employees through taxable premiums or salary increase. After reviewing or try these options, employers find they are often expensive and leave the employee in charge of additional tax.
This leaves employers in a difficult position to ask whether they can offer benefits to their employees. A successful alternative for your business can be in the form of a repayment plan, as Health Reimbursement Arrangement (HRA) .
What is a health reimbursement arrangement?
an HRA is a system of health benefits financed by the employer that allows reimbursement of eligible health expenses of an employee. An HRA is no health insurance. Instead, an HRA allows employers to contribute to the plan of an employee and provide reimbursement for eligible expenses.
It is worth noting that, like other types of health benefits, CRH have undergone changes in the Affordable Care Act. At present, there are three ways to use consistent CRH:
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An autonomous person HRA
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Integrated HRA
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retiree HRA
more about CRH types here.
What are the advantages of a health reimbursement arrangement?
reimbursement of free tax
As indicated above, some employers offer a bonus or a raise to help cover the cost of health spending their employees. Unlike bonuses or salaries, reimbursements received from HRA are not taxable to the employee and the employer are tax deductible. This means savings for the employer and employee.
No minimum or maximum limits of the contribution
Unlike a Health Savings Account (HSA) , with a HRA there is no restriction on the amount of money that employers can contribute to the employee's repayment plan. Employers can make decisions on the amount of contributions, regardless of a minimum requirement or maximum limit.
The preference of employees
With an HRA employees choose how to spend their health care dollars, within the parameters of this the plan allows.
control of eligible expenses
Health reimbursement arrangements allows an employer to control what types of health expenses are reimbursable by the scheme. An eligible expenditure can be any qualified medical expenses, as defined by Article IRS Code 213 (d), including premiums for personal insurance policies.
Employers can restrict the list of reimbursable expenses in any way they choose for their HRA plan, but remember - (. Including "market reforms") l the employer must also be sure that the HRA is in line with the affordable care Act to ensure compliance and to make easy HRA administration, most employers choose to work with administration software HRA.
Conclusion
as a small business owner, you know the importance of every penny of your business expense. group health insurance can be expensive and can not meet the needs of employees. A health reimbursement arrangement, or other type of health care reimbursement plan , could be the solution for your small business.
Can you think of other money saving strategies to implement for your small business? Start a discussion below. We'd love to hear your thoughts!
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