As health reimbursement plans (HRPS) grow in popularity as a means to contribute to some health insurance policies for employees, I often hear questions from small businesses about what they are and how they work under the affordable care Act. I also hear misconceptions. So to help owners and managers understand how HRPS, I presented 12 fast facts with links to learn more.
Understanding these 12 facts and you'll be well on your way to understanding the nuts and bolts of HRPS. 
12 Facts repayment health plans (HRPS)
1. A HRP is one of the formal employer health plan (a health plan group). An employer sets up the benefit plan and provides a contribution to health expenditure eligible employees.
2. HRP is not a health insurance coverage. It is a repayment plan. With HRP, employees buy their own health insurance plan and are reimbursed for eligible expenses.
3. A HRP is 100% funded by the employer. Unlike HSA or FSA, employees can not provide funding.
4. Employers may give the same contribution to all eligible employees, or offer different amounts of allowance depending on the function of employment and / or family status.
5. Employees can use their HRP funds on personal expenses insurance and basic preventive care. Many different types of health insurance are eligible. See this list.
6. HRP funds are theoretical, meaning no funds are expensed until employees submit a refund and verify their health care costs. As such, the pre-financing of third party accounts is not necessary -. A bonus for many small businesses
7. HRPS are allowed under the Act affordable care, as they follow existing and new regulations. Because a HRP is a group health plan, there are federal rules of the plan must follow. Compliance with these rules is easy with the right software administration. See the list of HRP compliance rules.
8. Establishment of a HRP is pretty simple, but there important steps such as documents and plan design of a true plan. There are online software services to help streamline the plan in place and ensure compliance.
9. HRP is a deductible advantage of tax free income tax, and. Although the tax benefits are limited to some business owners.
10. HRP is different from a Health Reimbursement Arrangement (HRA). HRP is specifically designed to comply with the new health reform rules. As such, it is more limited than the "HRA stand-alone." Most well known for most employers, self HRA is a manner consistent with the pay health insurance premiums.
11. HRPS are authorized under section 105 of the IRS tax code. Because of this, they are also commonly known as Section 105 medical reimbursement plans or simply Section 105 plans.
12. These days, HRP is the main vehicle for private employers use the repayment of health insurance. Learn more about repayment plans available for small businesses.
Conclusion
When you look at some basic facts, understanding of HRP is simple. To summarize, a HRP is a form of employer plan can use to provide employees a tax refund the insurance premiums. HRPS are a powerful tool for small businesses that want to allow employees to have the benefits of the modern individual health insurance and continue (or start) make a contribution to their health care.
Have these twelve facts to help you better understand HRPS? What questions do you have? Leave a comment below. If we get more questions, we'll write a post monitoring answer your questions!
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