Health reimbursement accounts (HRAs) are employer-funded tax-advantaged accounts, designed to help employees save money on the high costs associated with healthcare. By setting aside a specific amount of pre-tax dollars in an HRA, employers help their employees offset expensive medical bills and provide them with an “allowance” to use should an expense occur.
Incorporating the benefits of both flexible spending accounts (FSAs) and health savings accounts (HSAs), HRAs combine the control and cost-saving tools that employers are seeking with the flexibility and protection that their employees need.
Employers offering an HRA give their employees access to a funded, individual account, which they can use to pay for eligible medical expenses. The employer defines what expenses are “eligible” and what employees are able to use the funds for (e.g. specified out-of-pocket expenses such as deductibles or copays).
Items to note:
Employees must be enrolled in their employer’s medical plan to participate in the HRA.
Some HRA plans allow for funds to be rolled over from year to year, preventing employees from losing unspent dollars at the end of the plan year. However, if the employer’s plan does not include a rollover option, any funds left in the HRA at the end of the plan year will be returned to the employer.
The ICHRA is a new type of HRA introduced in 2019 that allows employers to set aside tax-free money for employees to use on eligible healthcare purchases and individual insurance premiums. Learn more about the ICHRA.
Items to note:
Employees and dependents must have coverage under an individual health insurance policy to be eligible for the ICHRA.
Employers should give an option to employees to choose between an ICHRA to cover the individual's health insurance policy or a group health plan, but can not offer both.
Employers may keep a traditional group plan for existing enrollees and offer an ICHRA only to new hires.
ICHRAs can be used in conjunction with a flexible spending account (FSA).
Employees make the initial health care purchase out-of-pocket, then they are reimbursed from the funds in the ICHRA.
If an employee participates in the ICHRA, they are no longer eligible for premium tax credits.
Employers get to determine what expenses are eligible, like insurance premiums, qualified medical expenses, or a combination of the two.
Another new type of HRA for 2019, the EBHRA, allows employers to contribute up to $1,800 annually to go toward reimbursement of an employee’s out-of-pocket medical expenses for excepted benefits like co-pays, deductibles, dental and vision coverage, COBRA premiums, and short-term insurance premiums. Unlike the ICHRA, the EBHRA can not be used to reimburse individual health insurance premiums. Learn more about the EBHRA.
Items to note:
An EBHRA can not be offered to employees who are already enrolled in an Individual Coverage Health Reimbursement Arrangement (ICHRA).
Employers must sponsor coverage under a group health plan to offer the EBHRA.
Quickly and conveniently pay for eligible expenses, without the hassle of filing a manual claim. With the MyAmeriflex Card, participants can access their HRA funds instantly when they swipe their card at eligible merchants. In most cases, this eliminates the hassle of having to verify the eligibility of an expense later on.
Convenience and award winning customer-service – right at your fingertips! With the MyAmeriflex Mobile App, participants can access their account from anywhere. Check balances, file a claim, or check on the status of a reimbursement, all from their mobile phone.
Account management just got easier. By logging into MyAmeriflex, participants can gain access to resources aimed at helping them maximize the value of their HRA plan. In addition to managing all aspects of their accounts, they can also access interactive how-to’s, spending calculators, and more.