You might know what an HRA (Health Reimbursement Account) is, if not, here is an in-depth overview. Here is how an HRA benefits your healthcare plan and health expenses.
An HRA is a great way to subsidize employee health coverage to pay for qualified health-related expenses like co-pays, coinsurance, deductibles using tax-free dollars. For an employee, it’s like free money for your health! Let us show you why it’s mutually beneficial for employers and employees.
HRA Benefits for Employers
- Tax-Free Allocation – health benefits cost money, it’s great to get a break from Uncle Same once in a while isn’t it? HRA contributions are not subject to federal or state income or payroll taxes.
- Productivity – Did you know $227 billion is wasted each year due to ““lost productivity”? This includes health-related classifications like sick days. This, however, does not include health-related financial stress from unplanned surgeries and medical expenses. It might now surprise you that #1 cause of personal credit card debt in the US is from medical expenses. Imagine if as an employer you can relieve some of that stress?
- Recruiting – you are giving money to your employees! Market this and let your prospective hires know how incredible this is. Your HR benefits offering is great!
HRA Benefits for Employees
- Free Money! Employer-funded health funds to use for out-of-pocket medical expenses
- 100% vested from day 1! That’s right, no need to wait in line, you get immediate access to your HRA.
- Health coverage is more affordable! Peace of mind knowing that in addition to your health insurance, your employer is providing additional dollars to cover health-related expenses.
HRAs are clearly an add-on to existing health benefits like healthcare and more popular health accounts like FSAs and HSAs. They are however a clear and direct path to decrease health costs for employees.
If you need more help with health account decisions, check out our blog. We will make you a healthcare benefits expert in no time, without any extra work or effort on your end.
Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.