Foundations of a Health Reimbursement Account (HRA)

HRAs deliver numerous benefits to both employers and employees, along with a few downsides. In all cases, HRAs help offset healthcare costs by using pre-tax dollars.                                                     

Critical HRA Components

• Funded by employers,
• Employers set parameters with the ability to change contributions at any time,
• Unused funds remain with the employer without “following” employee to new employment situations;
• Employees reimbursed for “approved” medical expenses; and
• No minimum or maximum contribution levels for employer contributions.

Some Benefits of HRAs

• Distributions can be made to current or former employees;
• Spouses and dependents can receive reimbursements;
• Employers are not mandated to prepay monies into the fund;
• Employers can define “qualified medical expenses;”
• Employer contributions are excluded from gross pay of employees;
• Reimbursements of qualified medical costs are tax-free.

If you are considering establishing an HRA for your business in or around Sonoma County, California, contact Sackett & Associates Insurance Services. We have been serving Northern Bay Area individuals and businesses for their health insurance needs for over 30 years. Sackett & Associates Insurance Services offers valuable and free quotes for you and/or your business to find affordable, effective healthcare solutions.