Health Reimbursement Arrangement Essay

Healthcare Options – (HRA) Health Reimbursement Accounts

Health Reimbursement arrangement (HRA) is an employer-funded medical reimbursement plan for employees. Health Reimbursement accounts is designed by the Internal Revenue Service (IRS) to enable employers reimburse their employees for certain medical expenses. This helps the employee settle the cost of their medical expenses. Additionally, it also help the employer save money on taxes.

Who can benefit from Health Reimbursement arrangements?

Someone who is self-employed cannot have a health reimbursement account in their name, but can reimburse their spouse, who works in the business as a W-2 employee, through health reimbursement arrangement. However, if your salary is high, you may have one, but your coverage may be limited.

How Do Health Reimbursement Arrangements Work?

It is among the most flexible kinds of employee’s benefit arrangements, making it quite attractive to many employers. On a regular basis, an employer contributes a pre-determined amount to an account on behalf of an employer. The employee can submit a reimbursement request for qualified medical expenses, and such reimbursements are not taxed.

What is required to start a HRA?

The major requirement to start health reimbursement account is that the plan must be funded solely by the employer, and not by reduction of salary. In addition, the plan may only provide benefits for verified medical expenses. With Health Reimbursement arrangements, employee healthcare expenditures are visible and obvious to both employee and employer, thereby promoting a better understanding of the costs of health care. In addition, employees who can monitor and control their health care costs become smarter health care consumers.

How Do Employers Benefit From A