HRAs & HSAs
Paying More For Health Insurance Isn’t Your Only Option.
The concept of consumer-driven healthcare is gaining momentum as employers increasingly look for options to help soften the blow of skyrocketing healthcare costs.
Two of the newest options available are Health Reimbursement Arrangements (HRAs) and Health Savings Accounts (HSAs). Understanding the options available can help you control your costs and better care for your employees.
Health Reimbursement Arrangement (HRA)
Health Reimbursement Accounts allow employers to shift from a defined benefits to a defined contribution philosophy that engages plan members in making wise consumer decisions when they shop for healthcare services.
- Lowers premium through high deductible and some self-funding
- Employer uses tax-free money to fund employees accounts
- Money can stay with employers if not used
- Focuses on 80/20 rule (80% of claims come from 20% of participants)
- Employers can establish healthy-living incentives
Health Savings Account (HSA)
A Health Savings Account is an account that can be funded with tax-free dollars by the employee, employer or both, to help pay for eligible medical expenses not covered by the insurance plan.
- Used with a qualified high deductible health plan
- Employee and/or employer fund HSAs
- Contributions are excluded from federal income tax
- Unused money is held in an interest-bearing savings or investment account
- Account belongs to the employee
- Save for future medical expenses
Deciding What’s Right For You
Introducing consumerism into your health plan requires an evaluation of the benefits and disadvantages of each option. No one solution is right for every employer. If your organization is considering implementing a consumer-driven health plan, contact a Horst Insurance representative at 717-560-1919 to better understand which plan is best for you and your employees.