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There has been a lot of talk about HSA's, those high deductible plans with a savings account, but for some businesses the seldom mentioned HRA is a much better option...

In order to have an HSA account, you must use 'qualified' high deductible plan, meaning plans that follow IRS guidelines. These plans have no first dollar benefits, with the exception of preventive care; some lower cost plans don't even have first dollar benefits for preventive care. In other words, there are no doctor copays, no prescription copays, etc. The result is that these plans are not very popular. The average person feels that insurance is no good if they don't got some kind of payment back from the insurance company. The true benefits of these plans are the tax advantages (see the discussion on HSA's for individuals); however, that is hard to explain to the average worker and his family. As a result, most employers are forced to contribute something into the worker's HSA account to make them feel better about this idea.
The problem with employer contributions into an employee's HSA account, is that you are essentially giving the money away. You can put no strings on how that money is spent and you cannot discriminate amounts amoung employees. So a younger worker with no health issues will get the same amount of money from you as an older employee with a heart condition. Also an employee with $500 in his/her HSA account could simply elect to take the tax penalty and buy new tires for his/her car with this money - and you can not force them to do otherwise.
Both of these problems can be eliminated if you use an HRA instead of an HSA. The HRA, which stands for Health Reimbursment Act, allows the employer to only provide a helping hand for those with genuine medical expenses. In the plan, you can literally say how you are going to spend the money, and place limits on those expenses. For example, you may go to a higher deductible plan, and then in your HRA document say that you would reimburse 80% of the expenses they meet after the original deductible would have been met subject to a limit of $1000. The combinations are endless and you can tailor one to meet your companies needs. If you have a lot of younger/healthy workers this idea may save your company hundreds or thousand of dollars per month in insurance premium. To see if it would work for you, just Contact Us to discuss it. For additional information and documents you can use to set up an HRA, you may also follow this link.