Zane Benefits Publishes New Information on Who Can Administer an HRA

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Rules and regulations on who is allowed to administer an HRA

Today, Zane Benefits, the number one online small business health benefits solution, published new information on who can administer an HRA.

According to Zane Benefits’ website, Health Reimbursement Arrangements, also referred to as Health Reimbursement Accounts or HRAs, provide small businesses an affordable health benefits solution. A common question from small businesses is "who can administer the Health Reimbursement Account?"

HRAs are authorized under Section 105 of the Internal Revenue Code, and are a type of self-funded, tax-favored plan that may be offered either in conjunction with a group health plan, or as a standalone plan to reimburse qualified out-of-pocket medical expenses and insurance expenses.

With a standalone HRA, a business would use the HRA to reimburse employees for qualified medical expenses and individual health insurance premium, instead of offering a group health insurance plan.

Reimbursements are generally excludable from the employee's gross income under Internal Revenue Code Sections 106 and 105. Reimbursements the business pays are tax-deductible.

For a business to administer an HRA, they need to have legal HRA Plan Documents in place. An HRA Plan Document describes the HRA Plan's terms and conditions related to the operation and administration of the HRA. Since an HRA is subject to ERISA, a legal HRA plan document must be provided in writing.

In addition to the HRA Plan Document, a business needs to make sure they have certain safeguards in place to stay compliant with the IRS, ERISA, HIPAA, and ACA.

Because of these compliance reasons, and for ease of use and time savings, most businesses use a third party to administer the HRA.

An HRA Software provider helps a business: set up the HRA, create and distribute HRA plans electronically, provide a "quickbooks-like" tracking of HRA funds, review claims for reimbursement, keep medical receipts on file electronically, and notify the employer (through the software) when to reimburse employees via payroll. HRA Software does not require pre-funding of HRA allowances, and is not a fiduciary.

HRA compliance requirements:

1. Tax Savings & IRS Compliance

2. Federal Compliance:
HIPAA (Medical Privacy): Employees’ medical information needs to be kept HIPAA-protected, and all medical documentation stored in compliance with HIPAA for 10 years, as required by the IRS for audit purposes. Employers should never see employees’ medical information, or even the type of medical expenses, to stay HIPAA compliant and stay nondiscriminatory.

ERISA: Under ERISA, employers are not allowed to “endorse” a specific individual health insurance plan. When offering an HRA, the employer should not know the details of individual health insurance plans purchased by employees, or even if they are seeking reimbursement for a health insurance premium (only that it is a qualified medical expense allowed by the HRA).

3. The Affordable Care Act (ACA) has introduced new requirements for HRAs including how benefit information is presented to employees, new reporting forms, and new plan design requirements.

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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 small businesses 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

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Christina Merhar
Zane Benefits
800-391-9209 6725
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