Health Reimbursement Arrangements (HRAs)

Did you know that an HRA could easily save your firm tens of thousands of dollars on your company's health premiums without having to drastically impact employees?

An HRA is a Defined Contribution health care vehicle, also called a defined contribution (DC) health plan. It is solely an employer-funded vehicle. HRAs cannot be funded by employee dollars.

These plans became popular after the 2002 IRS guidance which essentially created the vehicle we now know as an HRA. DC health plans and consumer-driven health care have been adopted by numerous employers eager to control cost increases for group heath care.

An HRA is a Group Health and Welfare Plan and subject to several legal requirements. A Plan Document is required and all eligible employees must receive an SPD. HRAs are subject to the nondiscrimination rules of Code §105(h).

HRAs can be designed as stand alone benefit or coupled with a health plan. Employers will find HRAs much more flexible than HSAs due to restrictive HSA rules.

BPC does NOT sell health insurance. We are a Third Party Administrator comprised of knowledgeable consultants. We will work with your current health agent or the provider of your choice. Our services include the drafting of an HRA document and Summary Plan Description, enrollment and claim forms, and administration of your plan. In other words, we will do most of the work for you and allow you to enjoy the savings.

>>View the IRS guidance regarding HRAs<<

Examples of Savings
Below are real-life examples of BPC clients who are reaping large savings with an HRA.

Number of Participants
Projected Savings