Health Benefits •
August 20, 2013 at 3:30 PM •
Written by: Christina Merhar
As more and more small businesses use a stand-alone Health Reimbursement Arrangement (HRA) to offer health benefits, employees often have questions about how the HRA works, and how to get the most value out of their new health benefit. This is common. Even though stand-alone HRAs are growing in popularity, they are still a relatively new small business health insurance solution.
Therefore, an important step for any small business when setting up a stand-alone HRA is educating employees on how an HRA works. Many HRA software providers will provide custom on-boarding resources and tools to educate employees.
Most HRA software providers will offer employees an online account where employees can:
View detailed HRA information such as benefit amount, learn what type of expenses are eligible for reimbursement, and access their Summary of Benefits and Coverage (SBC) and HRA plan documents.
Submit claims for reimbursement.
View the status of HRA claims 24/7.
The online HRA account should also offer links to help tutorials, and contact information for an employee support team.
Tip 2: Understand the Types of Expenses Reimbursable Through Your HRA
Each employer has flexibility in how they set up their HRA. For example, employers can specify the categories of expenses they will reimburse through your HRA benefit. Your HRA online account should provide a quick reference on what is reimbursable (as in the example above), and will be outlined in your enrollment packet, HRA plan documents, and/or SBC.
Understanding what types of medical expenses are reimbursable through your HRA will help you get the most out of your health benefit, and help you plan for your medical expenses.
Tip 3: Understand How Individual Health Insurance Works
If your employer is offering a stand-alone HRA, they may reimburse you for individual or family health insurance plan (tip: check your HRA plan documents). This means you will select and purchase an individual or family health insurance plan through a health insurance broker or online. Similar to HRAs, individual health insurance plans are growing in popularity and will soon become mainstream. However, many employees are still unfamiliar with how they work. Here are a few tips on individual health insurance:
Anyone can apply for an individual or family plan through an insurance broker (recommended), online, or through the health insurance marketplaces (the marketplaces open October 1, 2013 for coverage starting January 1, 2014).
Until the Affordable Care Act ("ObamaCare") takes full effect in 2014, carriers (in most states) can up-rate or deny individual or family coverage based on pre-existing medical conditions. This means you will need to answer medical history on the application, and for this reason working with a broker is highly recommended. Starting in 2014, however, all individual and family plans will be guaranteed-issue and federal health insurance subsidies will be available to eligible individuals to lower the cost of the premium expense.
You own the policy, so coverage is not dependent on employment. You can take the policy with you if you leave the company or retire.
Tip 4: Understand Time Limits for Requesting HRA Reimbursements
Like other medical reimbursement plans (HSAs, FSAs, etc), there are time factors with your HRA. These HRA timing details are included in your HRA plan documents and will outline when you need to submit claims, and timing details if you leave the company.
For example, your HRA plan documents will specify a length of time that you need to submit your HRA claims and your supporting documentation (invoice, EOB, etc.). Usually, this is 180 days after the date of service, but it varies by how the employer has set up the HRA.
Also, HRA claims and documentation for dates of service in a previous HRA plan year must be submitted within 90 days of the close of the previous HRA plan year.
Tip 5: Understand How the HRA Reimbursement Process Works
Our last employee HRA tip is to understand how the HRA reimbursement process will work. Again, this may vary by employer and by HRA provider.
Generally speaking, an HRA is a notional arrangement. This means your employer will reimburse you directly after you submit a request (an HRA claim). Your online HRA account will help you see and track all balances, expenses, and reimbursements.
What employee HRA tips do you have? Leave a comment below.
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