health reimbursement arrangements (hras) pacific benefits iflex 105 presents
TRANSCRIPT
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Health Reimbursement Arrangements (HRAs)
Pacific Benefits iFlex 105 Presents
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Health Reimbursement Arrangements
(HRAs)
What You Will Learn
• What is a Health Reimbursement Arrangement (HRA)?• Advantages of HRAs for Employers/Employees• The Benefit of This Plan• Utilizing Your HRA Funds• Claims/Reimbursement Methods
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What is a Health Reimbursement Arrangement (HRA)?
• Health Reimbursement Arrangements also known as HRAs, are funds that are provided by employers to reimburse employees for qualified medical expenses
• HRAs are one of the linchpins of Consumer Driven Health Care to combat the rising costs of health insurance premiums, for employers and employees alike
• The employer provides the funds, not the employees; the employer designates the HRA contribution amount and the Plan design
• HRA funds are tax free to employees
• A portion of the unused funds may be rolled over at the end of the plan year
• Because all monies in an HRA are employer funded, HRAs funds usually remain with the employer and do not follow an employee upon termination
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Advantages of HRAs for Employers/Employees
Advantages of HRAs for employers:• Benefit Cost savings from using the plan
• Future cost savings can be planned for
• Qualified reimbursement claims are tax deductible for the employer.
• Employers know their maximum cost exposure and projected cost to provide a health care benefit.
• HRAs can be combined with another employer based health plan like a Flexible Spending Account (FSAs) to achieve greater cost savings.
Advantages of HRAs for employees:• Reimbursements are tax-free to the employee as long as the funds are used for medical expenses
• Some unused funds in the HRA may be rolled over the next year for reimbursement.
• Some HRA plan designs do not require the employee to be covered under a high deductible health plan
• Contributions made by the employer are excluded from employee’s gross income.
• HRAs can be tailored to meet the employee’s needs or to their families’ specific needs for a particular benefit
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The Benefit of This Plan
Your HRA Plan Runs: mm-dd-yyyy to mm-dd-yyyy
Your employer will contribute these amounts into a HRA:Single: $ xxx.xxFamily: $ xxx.xx
Some HRA Plan Designs
Specific Benefit Payout Design: Your HRA will cover specific benefits in full
HRA Employee First - Payout Design: Employee to pay set portion of deductible
before employer funded HRA will pay for eligible expense.
HRA Shared - Payout Design: You and your employer split the costs foreligible expenses as each medical claim is incurred for the HRA limit.
HRA Employer First - Payout Design: Employer to pay for eligible expenses in HRA
funds first. Employee to pay any remaining balance, may be paid out of Flex
Spending Account
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Utilizing Your HRA Funds with
Pacific Benefits iFlex 105• With the HRA plan the
employer sponsors, employees can start utilizing their employer funded HRA accounts right away.
• If the employer offers pre-tax flex spending account (FSA); employees may elect to participate by setting aside pre-tax dollars for eligible expenses not covered by their HRA account.
• iFlex 105 will be assisting employee needs and questions about their account balances.
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Claims/Reimbursements
How do I pay for out-of-pocket medical expenses?
• Most plans will have the iFlex 105 debit card and you will use this at point of sale, as you would use a credit card with no out of pocket outlays
• In addition, your plan may offer Direct Deposit and Paper Checks as alternative methods of reimbursement
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Sample Savings from iFlex 105
Cost Summary
Present Plan Premium $ 226,860.84
New Plan Premium $ 91,392.00
Gross Savings $ 121,689.96
Employer Savings $ 60,404.40
Employee Savings $ 61,285.56
Total Savings $ 121,689.96
Risk Variance 100% Claims 50% 22% (Expected)
Employer Savings: $ 6,204.40 $ 32,304.40 $ 46,920.40
Proposed Rate Increase on Present Plan: 15% 20% 25%
Total New Premium on Present Plan: $ 260,889.97 $ 272,233.01 $ 283,576.05
Total Premium on New Plan $ 91,392.00 $ 91,392.00 $ 91,392.00
Gross Savings $ 169,497.97 $ 180,841.01 $ 192,184.05
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Questions?
ContactPacific Benefits iFlex 105
(916) 363-2101(800) 800-2090
Mimi Silvestre Joe GaitherVP of Operations CEO/PresidentExtension 226 Extension 231