Frequently Asked Questions

HRA's

What is an HRA?

An HRA, or Health Reimbursement Arrangement, is an employer-established benefit plan funded solely by the employer to help an employee pay for Section 213 eligible expenses. HRAs may not be funded by employee salary deductions.

Why would an employer opt for an HRA?

Employers can experience significant premium savings when and HRA is implemented alongside a High Deductible Health Plan (HDHP), or a plan with higher cost-sharing on RX or co-pays. Employers control how the plan is funded and what and how much the employees are reimbursed for.

What are the Section 213 eligible expenses usually covered under an HRA?

Expenses include but are not limited to the following: deductibles, co-payments, co-insurances, dental and/or vision expenses. For example, an employer may choose a HDHP with a $2,000 comprehensive deductible. The employer will fund $1,500 through the HRA, after the employee pays the first $500. Another example would be the employer funding a $1,000 inpatient/outpatient co-payment.

How does an HRA work?

Through the HRA plan, the employer will contribute a set amount for the pre-determined funding per participating employee.

Can unused contributions be forwarded to fund the next plan year?

Yes. As the plan is funded by the employer, all “leftover” contributions stay with employer and can be rolled over to fund next year’s plan, as determined by the employer.

What documentation is required for reimbursement?

Participating employees submit EOBs or receipts (depending on types of expenses) for reimbursements.

Can debit cards be used for HRA plans?

Yes, debit cards can be used, although in some situations it is not advisable.

Are payments made to the participant or the provider?

Payments are made only to the participant.

Can an HRA run alongside an FSA?

HRAs can run alongside FSA for all Section 213 eligible expenses.

FSA’s

What is an FSA?

Sometimes referred to as a Cafeteria Plan, Flex Plan, or Section 125 Plan— a Flexible Spending Account allows you to set aside a certain amount of your earnings into an account before paying income taxes. You may find out more by talking to your plan administrator.

What happens if I am terminated from employment?

Irrevocable HRA funds are available to you regardless of your employment status.

What expenses are eligible for reimbursement?

Integrated HRA funds can be used for qualified medical and prescription expenses under the IRS Code Section 213(d). Excepted Benefits HRA is limited largely to dental and vision and can’t be used for medical and prescription benefits. You are eligible to be reimbursed for expenses incurred by yourself, your spouse or domestic partner and/or your tax dependents.

What is eligible with an FSA?

Check out our FSA Store for a complete list of Eligible Items

HSA’s

What is a Health Savings Account (HSA)?

A Health Savings Account (HSA) is an account that allows you to save money for medical expenses on a tax-advantaged basis. Funds are deposited into the HSA on a tax-free or tax-deductible basis, funds grow on a tax-deferred basis, and remain tax-free when used for eligible medical expenses. It is the only existing account that provides a triple tax benefit where funds, when used for eligible expenses, are never taxed. In order to contribute to an HSA, the HSA must be combined with an HSA-compatible health plan (often referred to as a high deductible health plan or HDHP).

If I have a Dependent Care FSA, am I still HSA eligible?

A Dependent Care FSA does not affect your eligibility for an HSA. You can have both accounts without creating any conflict of benefits.

If I have an HSA, can I have a Medical FSA or HRA?

An HSA cannot be combined with a General Medical FSA or HRA. The IRS permits an individual to have a Limited Medical FSA or Limited HRA which allows you to save additional tax-free dollars for vision and dental expenses.

How do HSA contributions work and are there any limits?

Contributions can be made by you, your employer or a third party (e.g. family member or friend). These contributions can either be made on a tax-free basis through a Section 125 Plan or directly into the account on a tax-deductible basis. The IRS sets the maximum annual contribution limit. Generally, HSA contributions do not have to be prorated; however, certain exceptions and conditions apply.

IRS Contribution Limits (2020)

Single Coverage

$3,550

Family Coverage
$7,100

COBRA Benefits

What Is COBRA Continuation Coverage?

Employers in the U.S. are required to provide health insurance to their qualifying employees by paying a part of insurance premiums. In case the employee becomes ineligible to receive an employer’s health insurance benefits due to a variety of reasons (like getting laid off or falling below a minimum threshold number of hours worked per week), the employer may stop paying its share of employee’s health insurance premiums. A 1986 federal law called the Consolidated Omnibus Budget Reconciliation Act allows the employee and their dependents to retain the same health insurance coverage if they are willing to pay for it on their own.

COBRA allows former employees, retirees, spouses, former spouses, and dependent children to obtain continued health insurance coverage at group rates that otherwise might be terminated. While these individuals will likely pay more for health insurance coverage through COBRA than they would have as an employee (as a result of the fact that the employer no longer pays a portion of the premium costs), COBRA coverage is typically less expensive than an individual health insurance plan would be.

What are the triggering events for COBRA?

A triggering event is an event that would cause a loss in group health plan benefits. The triggering events are Death, Divorce, Retirement, Resignation, Termination, Child Ceasing to be a Dependent on the Plan (because of age), Reduction of Hours and sometimes Medicare Entitlement of the Employee. If an employee is on one (or all) of your group health plans and loses benefits due to a triggering event (other than gross misconduct) they have the right to COBRA and should be sent a Qualifying Event (Election) letter with the option to enroll in COBRA.

What are the COBRA timelines?

The employer must notify the administrator within 30 days of the triggering event. The administrator then has an additional 14 days to notify the Qualified Beneficiary by letter. The Qualified Beneficiary then has 60 days to elect to continue coverage through COBRA. COBRA will continue for 18 or 36 months on the condition that premium payments are made timely. Payments are due on the first of each month with a 30 day grace period. The initial payment must be made within 45 days of electing COBRA coverage. This payment must bring your account current.

What are the COBRA Benefits and Coverages Available?

For qualifying candidates, COBRA rules provide for the offering of identical coverage to what the employer offers to its current employees. Any change in the plan benefits for the active employees will also apply to qualified beneficiaries. All qualifying COBRA beneficiaries must be allowed to make the same choices as the non-COBRA beneficiaries. Essentially, the insurance coverage for current employees/beneficiaries remains exactly the same for ex-employees/beneficiaries under COBRA.

From the date of the qualifying event, COBRA coverage extends for a limited period of 18 or 36 months, depending upon the applicable scenarios. One can qualify to extend the 18 month maximum period of continuation coverage if any one of the qualified beneficiaries in the family is disabled and meets certain requirements, or if a second qualifying event occurs, potentially including the death of a covered employee, the legal separation of a covered employee and spouse, a covered employee’s becoming entitled to Medicare, or a loss of dependent child status under the plan.

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