Zane Benefits Publishes New Information on Health Reimbursement Account Eligibility

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W-2 Employees Eligible to Participate in HRAs and Select Owner Groups

Today, Zane Benefits, Inc. published new information health reimbursement account eligibility. 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, with health care reform taking full effect in 2014, more companies will be switching to Health Reimbursement Accounts (HRAs) and defined contribution. A common question about HRAs is for employers and consumers is "who is eligible to participate?"

1. Who is Eligible to Participate in the HRA?

According to Zane Benefits’ website, current or former W-2 employees, and their qualified dependents, are eligible to participate in the HRA and receive reimbursements 100% tax-free.

2. Who are Qualified HRA Dependents?

According to Zane Benefits’ website and the IRS, a qualified HRA dependent must be a dependent per the IRS definition. Qualified dependents include a spouse, child(ren) or qualified relatives.

3. Can an Owner Participate in the HRA?

According to Zane Benefits’ website, yes. However, whether or not owners can receive HRA reimbursements 100% tax free depends on how the company files, and the owner's status.

  • C-Corporation Owners: C-Corp owners may participate in an HRA and receive all HRA reimbursements 100% tax-free.
  • Sole Proprietors, Partners, or S-Corp shareholders that own >2% of the company's shares: These Non-C-Corp owners can use the HRA platform to reimburse and track medical expenses. However, HRA reimbursements must be reported on the owners'/partners' wages (on their W-2 and 1040 forms) and are subject to federal income taxes.

4. Can 1099 Contractors Participate in the HRA?

According to Zane Benefits’ website, technically, the answer is no. However, many businesses use our HRA Software to offer health benefits to 1099 contractors. The primary difference is that, unlike W-2 employees, 1099 contractors must report all HRA reimbursements as income on their personal tax return. Due to its flexibility, HRA software can be the ideal health benefits solution for 1099 contractors.

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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

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Christina Merhar
Zane Benefits
800-391-9209 6725
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