Health Reimbursement Accounts (HRAs)
A Health Reimbursement Account (or HRA) is a medical spending program that allows employers to offer tax-exempt funding for employee medical expenses. HRAs are not stand-alone health coverage options but rather a supplemental means of reimbursing your employees for incurred medical expenses not covered by the company's insurance plan.
Using an HRA provides substantial tax advantages for both employers and employees. Because the employer funds the plan, any reimbursement distributions requested by participating employees are considered tax deductible for your company. Similarly, reimbursement dollars received by the employee are tax free so they don’t affect vital income levels. By offsetting upfront health care costs and providing a non-taxable resource for employers and employees alike, HRAs benefit both the company-at-large as well as each participating individual.
IAA's Enhanced HRAs
In addition to offering traditional HRA options like those described above, IAA has designed a series of beneficial enhancements to offer our clients the widest possible range of choices. With an enhanced HRA from IAA, you can:
- Share plan costs between employee and employer
- Integrate pre-tax payroll contributions with Section 125 reimbursements
- Pay as you go or set up a pre-funded IAA account
- Incorporate a "carved out" prescription drug program
- Preempt state health benefit requirements