If your organization has decided to start offering a health reimbursement arrangement (HRA), it’s important to use an administration tool that helps you stay on top of compliance obligations, makes it easy for employees to enroll, and gives your organization the training and resources it needs to keep your HRA running smoothly.
No matter what type of HRA you’re planning to sign up for (more on those later), your organization needs these three features from an HRA plan administrator.
1. Automated compliance and software updates
Federal law and the IRS code impose strict requirements on employers that offer an HRA. Because certain requirements can change from year to year, any software you choose should include automatic updates.
At a minimum, the software should include features that cover:
- Creation of a written legal plan and summary plan description (SPD)
- A way to collect and store employees’ electronic signatures
- Privacy features that ensure the organization doesn’t view employees’ protected health information (PHI)
- The Employee Retirement Income Security Act (ERISA) compliance
- Documentation regarding appeal requirements, notifications, and procedures
- Continued coverage of dependent children up to age 26
- Automated notice requirements for employees’ eligibility and annual allowance
Without these features, your organization could easily run afoul of tax rules and federal law. Fortunately, automated compliance software takes the guesswork out of managing your HRA.
2. Employee tools and resources
Additionally, your HRA administration tool should also include resources that help employees buy their own individual health policies (if your company doesn’t offer group health insurance already) and request reimbursement for eligible medical expenses.
Employee features to look for include:
- An employee welcome letter and other employee communications
- Identification of resources that can help employees decide which policy to purchase
- Online access to their account and a way to check their account balance
- HSA compatibility
- A simple way for employees to make reimbursement requests
- An option to request an expedited reimbursement review
- A way for employees to track reimbursements over time
Because the whole purpose of offering an HRA is to provide employees with flexible, valuable health benefits, you want to make it easy for them to take advantage of their benefits. With the right HRA administration software, you’ll be compliant with federal rules, and your employees will know where to go for info on choosing a policy and requesting reimbursements.
3. Employer tools and resources
Finally, the HRA administration software you choose should include tools that make it easy for your organization’s plan administrator to manage the HRA, track reimbursements, and comply with all reporting requirements.
Key features include:
- Cloud-based account access
- Real-time access to accounting information
- An easy way to manage employee enrollment in the HRA
- A way to track and record reimbursements (and send automatic notice of reimbursement decisions to employees)
- Online, automatic annual renewal
While the HRA is less wieldy to administer compared to traditional group health insurance, it’s not without its own learning curve—as well as tough penalties if you inadvertently fall out of compliance. A good administrative tool will give your plan administrator the training and ongoing support needed to keep your HRA compliant and functioning smoothly.
Administering the right HRA
Now that you know what to look for in an HRA administrative tool, you’re ready to decide which HRA plan will work best for your organization. At PeopleKeep, we offer three unique HRAs that are built for every company size, budget, and insurance status. Let’s take a look at each to help you make the right choice for you and your employees.
First up is the qualified small employer HRA (QSEHRA). This plan works best for employers with fewer than 50 full-time equivalent employees and don’t have group health insurance in place.
Next is the individual coverage HRA (ICHRA). This is a great option for employers of all sizes who want their HRA to work as a stand-alone benefit or alongside group health insurance.
Finally, there’s the group coverage HRA (GCHRA). This HRA is designed for small to midsize employers who already have a group health insurance plan set up and want to use the HRA as an extra benefit for their employers.
With the right tool, administering an HRA can be a snap. For a simple and compliant way to administer your organization’s HRA, consider PeopleKeep’s software and award-winning customer support team. We help employers throughout the United States administer their own QSEHRA, ICHRA, and GCHRA plans.
This article was originally published on April 19, 2017. It was last updated February 26, 2021.