A great new tool to reduce your health insurance cost is at your finger tips, it’s called an HRA. HRA stands for a Health Reimbursement Arrangement. An HRA gives the employer the opportunity to reimburse the employee for health related costs. The employer must follow these rules: they must have an HRA agreement in place, the HRA must define what health costs it will reimburse i.e. health insurance premiums, give the same dollar amount to all employees and manage the accounting for all qualified reimbursed receipts.
The employer can choose how often reimbursements occur from monthly to quarterly to semi annually. If you have a small business this accounting process can be managed internally but there are many service companies that can handle this process for you.
Some of the great benefits of having a Health Reimbursement Arrangement within your company are the following:
- It allows you to know how much health related costs are going to be, so you don’t need to worry about blowing your budget.
- Each employee chooses what health benefits that fit their needs.
- Premiums run from 10-30% less than a group rate.
It’s important that your health insurance agent understands the individual health insurance market and the products that are available since every employee will need to purchase their own insurance.