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Is an HRA a good fit for my organization?

March 24, 2020
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Are you looking into offering health benefits and want to figure out an affordable solution? Or do you already offer benefits, and you’re looking into alternative options? In either case, a Health Reimbursement Arrangement (HRA) may be a great fit for your organization. 

In this article, we list out the characteristics of the perfect HRA candidate. Read below to see if one of the groups applies to you and your business.

Employers looking to adopt health benefits

Many employers who decide to adopt an HRA do so because they are not currently offering health benefits. Some organizations offer their employees taxable stipends or wage increases in place of health benefits, but oftentimes, that extra money isn’t used as a health benefit and can often leave the organization out of compliance. If your organization is looking to adopt health benefits, an HRA might be right for you! See below if your organization is a good fit.

Category Characteristics
Employer Size

Most employers have 2-25 full-time W-2 employees, any mix of full-time and part time employees. However, organizations of varied sizes can still qualify.  Click here to learn more about eligibility.

Organizational Challenges
  • Hiring and retaining talent

  • Group health is financially out of reach

  • Out of compliance with current offering

  • Employees in multiple states/remote workforce

  • International organization with American employees

Common Industries
  • Clinics (medical, dental, vet)

  • Start-ups

  • Family-owned organizations

  • Non-profits

  • Utility companies

  • Construction

  • Franchises

HRA Options
  • Qualified small employer HRA (QSEHRA)

  • Individual coverage HRA (ICHRA)

Organizations in many different industries have found an HRA to be a great solution for offering affordable benefits. To figure out which HRA is right for your organization, take our two-minute HRA Quiz.

Employers seeking alternatives to group health

As group health becomes more expensive, many employers are looking for alternatives to group health. An HRA could be a great way to provide a more affordable solution for health benefits. Often, group health has a lot of strict participation and contribution requirements, whereas HRAs are much more flexible and customizable. Below are some quick facts about organizations like yours who are using HRAs after coming from group health.

Category Characteristics
Employer Size

Most employers have more than 25+ full-time employees, however employers of any size may still qualify.

Organizational Challenges
  • Group health is too expensive

  • Employees in multiple states/remote workforce

  • Limited choice for group coverage options

  • Struggling with minimum participation requirements

HRA Options
  • ICHRA - Most popular

  • QSEHRA - if less than 50 employees

Switching from group health to an HRA is a great opportunity to save on taxes, and provide your employees with more options for the type of health coverage that works best for them. Avoid the participation and contribution rules of expensive group plans, and look at how an HRA could meet the needs of your organization’s employees. 

To see how much offering an ICHRA would cost, get an instant quote HERE.

Employers looking to supplement their high deductible health plan (HDHP)

As more employers look to HDHPs as their health benefit solution, there is growing need for employees to find ways to get services covered. An HRA is a great way to provide employees with flexibility to get reimbursed for health services they’re actually using in combination with their group coverage.

Category Characteristics
Employer size

Most employers have more than 25+ full-time employees, however employers of any size may still qualify.

Organizational Challenges
  • Group health increasingly more expensive

  • HDHPs make using health insurance cumbersome and expensive

  • Group health options aren’t flexible/customizable

  • Hiring and retaining top talent

HRA Options

Group Coverage HRA

Conclusion

HRAs are a great fit for almost any organization, whether they currently provide group insurance, or are just starting to look at health benefits options! Organizations in all industries and of all sizes can likely benefit from an HRA. If your organization fits into any of the above described groups, we’d love to help you find a solution that works best for your needs.

If you’re trying to determine which plan may be best for your organization, click here to see a comprehensive comparison chart.

Learn how an HRA works for employers in our latest webinar
Watch the recording today, and learn how an HRA can help your organization.
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