Zane Benefits Publishes New Information on Health Reimbursement Accounts

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A stand-alone HRA allows many small businesses to offer employee health benefits.

Today, Zane Benefits, Inc. published new information on Health Reimbursement Accounts (HRAs). Zane Benefits, which provides comprehensive and flexible alternatives to traditional employer sponsored health benefits, is the leader in defined contribution and health reimbursement arrangements.

According to Zane Benefits’ website, A Health Reimbursement Arrangement (HRA), is an IRS-approved, employer-funded, medical expense reimbursement plan. An HRA allows an employer to reimburse employees tax-free for out-of-pocket medical expenses and individual health insurance premiums. There there are two primary types of HRAs: Stand-alone HRAs and integrated HRAs.Companies use them in different ways to achieve their employee benefit goals.

Stand-Alone HRA

According to Zane Benefits’ website, a stand-alone HRA is not linked to a group health insurance plan. Rather, the stand-alone HRA is the company's health benefit. With stand-alone HRA:

  • The company provides employees a fixed monthly allowance for health insurance premiums and other eligible medical expenses.
  • Employees purchase their own individual health insurance premiums (often with the help of a broker or agent).
  • Using HRA Software, employees submit their expenses and the company reimburses them tax-free on payroll, up to the amount available in their HRA balance.

According to Zane Benefits’ website, if group health insurance is not an option, a stand-alone HRA allows a company to offer employee health benefits. Companies value stand-alone HRAs because they control the plan and all costs. Employees value stand-alone HRAs because they choose an insurance plan that best fits their needs, and they can keep the policy when they leave the company. A stand-alone HRA is also referred to as "defined contribution."

To summarize, generally with a stand-alone HRA no group health plan is offered, the stand-alone HRA reimburses individual health insurance premiums, and other out-of-pocket medical expenses, and HRA allowances are given monthly. Often there is some rollover of unused funds year to year.

Integrated HRA

According to Zane Benefits’ website, an integrated HRA is the more commonly-known type of HRA. An integrated HRA is linked with a high deductible group health insurance plan. The integrated HRA is offered only to those at the company who take the group health insurance plan, because it is a supplement to help employees with their deductible costs.

With an integrated HRA, usually a company has a group health insurance plan in place, but is looking to lower the cost while keeping employee's coverage (risk) the same.

First, a company would purchase a high deductible health plan to achieve savings with lower premiums (for example, from a $500 deductible to a $2,500 deductible).

Second, they would offer an integrated HRA to cover the difference between the old and new deductible (in this example, $2,000 annually).

According to Zane Benefits’ website, with an integrated HRA, insurance premiums are not reimbursable because the company is already providing an insurance plan. However, similar to a stand-alone HRA, a company can decide what other types of eligible expenses they would like to reimburse. It's common with integrated HRAs to only reimburse deductible or co-insurance expenses also covered under the group health insurance plan. An Explanation of Benefits (EOB) is typically required with each reimbursement request.

To summarize, generally with an integrated HRA a high-deductible health plan (HDHP) is offered, the integrated HRA reimburses out-of-pocket medical expenses, often just deductible/co-insurance expenses related to the HDHP, and allowances are given annually. Usually there is no rollover of unused funds year to year.

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About Zane Benefits
Zane Benefits was founded in 2006 to provide a revolutionized SaaS (Software-as-a-Service) administration platform ("ZaneHRA") for Health Reimbursement Arrangements (HRAs) and defined contribution health care. The flagship software provides a 100% paperless administration experience to employers and insurance professionals that want to offer better health benefits without a traditional group health insurance plan at lower costs. For more information about ZaneHRA, visit http://www.zanebenefits.com.

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Christina Merhar
Zane Benefits
800-391-9209 6725
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