Defined Contribution Plans | Section 125 Cafeteria Plans | COBRA | HRA | HSA

Health Reimbursement Arrangements:

A Health Reimbursement Arrangement (HRA) is an employer-funded plan that provides increased freedom for the employer to design a benefit plan that meets their needs without breaking their budget. HRAs allow employers to control costs while providing more choices to their employees. HRAs do not need to be pre-funded, and they allow employees to be reimbursed with tax-free dollars after they submit an eligible request for reimbursement, along with an Explanation of Benefits (EOB) offered by the health care provider. Unlike a Section 125 Cafeteria Plan, funds can be carried over to the next year.

Employer Advantages:

• HRAs can be introduced gradually by offering multiple options.
• Retain ownership of the funds if an employee terminates.
• Funds are not subject to income taxes, FICA, or workers compensation.
• HRAs do not need to be pre-funded.
• HRAs are available to all business sizes.

Employee Advantages:

• Reimbursements are subsidized by the Employer.
• Funds remaining at the end of the year can be carried over.
• Funds remaining upon termination can be used to purchase COBRA coverage.
• Customize and optimize health benefits with no additional cost to the employer.