Why SBA for HRA Plan Administration?
HRAs, while not a particularly complicated concept, have some tricky provisions and can be confusing for participants. Additionally, two new versions of the HRA, the Individual Coverage HRA (ICHRA) and the Excepted Benefit HRA (EBHRA) will provide employers of all sizes more flexibility in offering an HRA to employees regardless of the presence of a group medical plan.
Additionally, as HRAs are a COBRA eligible benefit, if SBA is also the COBRA administrator, we can automatically calculate the HRA COBRA premium.
What should you know about HRAs?
- HRAs are traditionally used to help employers offset the costs to employees of higher deductible medical plans.
- The premium savings from the higher deductible plan often times will cover expected HRA claims and administrative expenses.
- With respect to employee utilization, a PPO medical plan will typically see between 7% – 15% of covered individuals submitting reimbursement requests in a calendar year.
- By IRS rules, company owners often cannot participate in an HRA. Only C Corporation owners can participate. And, if you are a Sub-Chapter S Corporation, employees who are related to you cannot participate.
- You may match a PPO high deductible medical plan or a Health Savings Account (HSA) medical plan with an HRA. Special considerations must be addressed when using an HSA-qualified medical plan in conjunction with an HRA.
For ongoing HRA administration, SBA will:
- Create enrollment materials, plan documents and Summary Benefits Coverage (SBC).
- Conduct required annual non-discrimination testing.
- Send monthly statements of account showing the calendar year claims to date.
- Assist HRA participants who are confused about where to find the deductible or coinsurance figures on their EOBs. Employees can call us and we will help them read their EOBs and complete the paperwork to start the reimbursement process. Often participants will ask, “Can I just send you everything and will you sort it out?” and the answer is yes, we will do everything to have a satisfied participant.