Education

Types of HRA Accounts

By June 25, 2018March 5th, 2020No Comments

Overview

Recently, OneBridge explained exactly what a Funded HRA was. There are several types of Funded HRA accounts and much like the software OneBridge provides, these health reimbursement accounts can be customized to the needs of employers and their employees and retirees. To provide further clarity, here are two types of HRA accounts and how they benefit employers and employees.

Integrated HRA

An integrated HRA aims to lower the cost of health insurance for both employers and employees without sacrificing coverage. Employers offer insurance plans with higher deductibles and copays which results in lower premiums. Employees who opt elect these plans are then eligible for an integrated Funded HRA, which reimburses employees for their out of pocket healthcare expenses. Both employers and employees save on the reduced insurance premiums and if the employees don’t use the full amount that was funded into their HRA, they can save it, invest it, and use it tax-free in future years.

Retiree HRA

This health reimbursement account only reimburses a participant after they’ve retired. Employers contribute tax-free to the plan either during employment or at the point of retirement with contributions being fully invested until the retiree uses the account. The funds can be used to cover out of pocket expenses including retiree insurance premiums, prescription drug cost, Medicare and Medicare supplement premiums, and other qualified out of pocket expenses. For employers, it helps to replace expensive defined benefit health plans and reduce other post-employment benefits liabilities. Retirees benefit from more flexibility and control over their healthcare decisions.

Bridging the HRA Gap

While we have highlighted just two of the most popular funded HRA plan designs, these plans can be developed to meet your specific needs. In providing the software platform which powers these Funded HRAs, OneBridge partners with leading consultants and TPAs who can provide guidance and education on the various HRA plan designs. A partnership with OneBridge Benefits helps bridge the gap when it comes to these types of accounts, benefiting employers, employees and retirees.