HRA Plans and Why They Are So Valuable
Picture this: you are trying to hire the best talent for your team. However, with so many companies out there offering increased benefits, how do you stand out? Enter the HRA plan (Health Reimbursement Arrangements). These accounts have only been around for about 20 years, so let’s review what they are, why they are so valuable, and how they are different from other benefit plans.
What is an HRA plan?
It is basically a way for employers to say, “We got your back when it comes to health expenses.” Eligible employers can put some cash in an account for each employee. Then, employees can dip into that cash to cover their medical bills – whether it is for a doctor visit, meds, or even those pricey band-aids.
Why is an HRA plan so valuable?
What does an HRA do for an employer? First, they give employers control and flexibility. Instead of shelling out a bunch of dough to insurance companies, employers only pay up when employees actually need medical help. Plus, any leftover cash in an employee’s HRA can often roll over to the next year. Offering an HRA plan can help you stand out in the job market, too. Employees love having control over their health spending, and an HRA plan gives them just that. By offering an HRA, you are not just attracting talent – you are keeping employees happy too.
How are HRAs different?
For anyone unfamiliar with HRAs, you might be wondering, “Are they just like Flexible Spending Accounts (FSAs) or Health Savings Accounts (HSAs)?” Not quite! With HRAs, the employer owns the cash in the account and calls the shots. However, with HSAs, it’s the employees who own the money – they can even take it with them if they leave the company. And with FSAs, if employees don’t use up all the cash by the end of the year, it’s gone via the use-it-or-lose-it rules. (There can be rollover and grace period provisions, however.)
This is only a brief examination of the benefits of an HRA plan, so check out BASIC HRA Administration for more information on how we provide a variety of HRA plans to meet any organization’s needs! BASIC offers expert HRA plan designs, flexibility, and stress-free administration!
