Health Reimbursement Accounts (HRA)

Health Reimbursement Accounts (HRA)

Health Reimbursement Accounts are funded and owned solely by the employer and utilized for the benefit of employees to cover the cost of medical expenses chosen by the employer.

Health Reimbursement Accounts (HRA)

What is a Health Reimbursement Account (HRA)?

Created under Section 105 of the Internal Revenue Code, Health Reimbursement Accounts (HRAs) are employer-funded accounts used to reimburse medical expenses to employees. The employer decides how much funding will be available to the employees for the year. Similar to Section 125 Flexible Spending Accounts, HRAs reimburse medical expenses such as copays, deductibles, office visits, prescriptions, vision care expenses and dental care expenses. However, unlike FSAs, the "Use it or Lose it" rule does not apply to HRAs, allowing for the option to have unused funds carry forward. HRA benefits are untaxed at the employee level and tax-deductible to the company.

Reimbursements

Most employers take advantage of the convenience of electronic reimbursement made available through the use of the MySource Debit Card as an alternative to traditional methods of filing claims. The MySource Debit card can be used at qualifying merchant locations wherever MasterCard is accepted - from a physician and dental offices to pharmacies and vision service locations. The MySource Debit card allows employees to pay for expenses at the point of service, provid­ing them with instant access to their account, without having to complete claim forms. Manual paper claim processing is also available to employees for when Service Provider debit card processing is not available.

HRAs after Health Care Reform

Under the Patient Protection and Affordable Care Act (PPACA), otherwise known as Health Care Reform, group health plans are prohibited from imposing annual dollar limits on "essential health benefits" starting in 2014. By their very nature, HRAs limit the amount of benefits that may be provided to a participant's current account balance. This raised the question of how HRAs could comply with the annual limit restrictions. Fortunately, the interim final regulations on annual limits explicitly exempted HRAs that are integrated with other coverage as part of a group health plan as long as the other coverage would comply on its own. This means that an HRA plan design that is linked to an insurance plan and reimburses only expenses not funded by the insurance plan, such as deductibles, is a PPACA compatible design. As a result, many employers have switched from offering only traditional insurance plans to offering HRAs linked to High Deductible Health Plans, to cover all or a percentage of employee deductibles. The result is more employee coverage and less premiums.

List of Services

  • Preparation and generation of Employee Coverage Report for payroll purposes.
  • Preparation of Administration Guide.
  • Preparation of Service Agreement.
  • Preparation of introduction letter to participant with instructions about the MySource debit card. Opening of individual debit card accounts to all new participants
  • Processing of deletions/terminations of employees.
  • Processing of all family status changes.
  • Processing of all plan changes, when applicable.
  • Processing of HRA manual reimbursement claims.
  • Disbursing of reimbursement claim checks, when applicable.
  • reparation of monthly account balance report for employer, as well as a cash status report.

Related to: Third Party Administrator, HR Consultant, HR Consulting Firm

Further Reading: Health Reimbursement Accounts (HRA)

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Highly impressed with their level of expertise and outstanding customer service.

Highly impressed with their level of expertise and outstanding customer service.

I highly recommend TPS Group and their quality third-party administration for our 403(b) plan. During our long relationship with TPS Group, we have never failed to be impressed with their level of expertise and outstanding customer service. They keep their promises and it’s easy to work with them. Having our own rep Lauren McNabb is a plus!

- Don Senecal

"Extremely Helpful to Our Business"

"Extremely Helpful to Our Business"

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"Wonderful To Work With"

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"Answers All Of My Questions In A Clear Manner"

"Answers All Of My Questions In A Clear Manner"

Our case administrator, Susan, has been absolutely wonderful and is a joy to work with. She is very knowledgeable, patient, answers all of my questions in a clear manner, and is professional.

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Extremely Valuable to Myself and Our Company

Extremely Valuable to Myself and Our Company

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Very Responsive And Clear To Requests And Questions

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For many years we’ve relied on TPS Group’s extensive knowledge and industry expertise to keep us in compliance with state and federal regulations as well as changes in the law. Their attention to detail is just what we need to keep our business operations running smoothly. They are a pleasure to work with and we highly recommend their services.

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TPS filled in the gaps within our small HR department

Working with Kim and her talented team helped us fill in the gaps within our small HR department. I strongly recommend TPS for HR tasks that don’t warrant hiring a full-time team. Thanks again Kim!

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Knowledge and Expertise

Excellent customer service can be hard to find, but not with TPS Group! I know when I do business with Phil Coco, I can expect a quick response. I rely on his knowledge and expertise, and highly recommend TPS Group for their pension services.

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Dependable, experienced, and professional

Dependable, experienced, and professional

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