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Health Reimbursement Arrangements - New York and New Jersey


A Health Reimbursement Arrangement ( HRA ) is 100% funded by the employer. The terms of these arrangements can provide first dollar medical coverage until the funds are exhausted, or insurance coverage kicks in. The contribution amount per employee is set by the employer, and the employer determines what the funds can be used to cover and if the dollars can be rolled over to the next year. In most cases, if the employee leaves the employer, they cannot take remaining Health Reimbursement Arrangement funds with them.

As more New Jersey and New York employers are discovering every day, Health Reimbursement Arrangements can be a key component of lower cost health plans. By offering employees an HRA debit card, employers are able to combine an HRA and FSA with any higher deductible healthcare insurance program to create a consumer driven healthcare plan. It is a win-win for everyone! Employers get to save premium on their healthcare plans and employees can remain whole; funding the card for the employee with the premium savings. Meanwhile employees enjoy the freedom of choice to make their healthcare decisions as they see appropriately fit and what makes the most sense for their family.

Funded by the employer (based on the premium savings from a higher deductible plan), a Health Reimbursement Arrangement debit card is setup with a predetermined amount of money that the employer selects. Employees then use card to cover out-of-pocket health-care related expenses.

In addition to this coverage, employees are covered through an employer-sponsored higher-deductible plan or a higher co-pay health care plan – a much less expensive plan than common first-dollar coverage plans. In fact, the employer uses the premium savings from the higher-deductible or co-pay plan to fund the HRA debit card. The HRA debit card works with any insurance plan - small group or large, fully insured or self-insured – at the discretion of the employer.

Employees use the Health Reimbursement Arrange card to cover medical expenses, such as office visits and prescription co-pays. For employees who may not need medical care (due to a spouse whose plan may cover the entire family, for example), the employer may allow employees to use this HRA debit card for dental, vision care, or alternative treatment, such as acupuncture or chiropractic care. What’s more, the employer may choose to allow some or all of the unspent money to roll over from year to year.

Employees may also supplement their HRA debit card/account by contributing additional monies through pre-tax payroll contributions

When an employee makes a visit to the doctor, they would present their healthcare plan ID card. If the plan has a co-pay, they use their HRA card to make the payment at the time of services. If their plan is subject to office visits and a deductible, they would use their HRA debit card to make their payment once the provider bills them.

The HRA debit card makes the payment to the provider from the fund established by the employer. Account balances are accessed online and Annual statements are also made available to employees.

Of course, claims may also be submitted manually. If an eligible claim is submitted via mail or fax, the HRA debit card vendor will mail the employee a check or direct-deposit the funds into his or her account – whichever is preferred.

The HRA debit card program represents an intelligent response to runaway health insurance costs. It provides superior coverage, lower cost, and added convenience.

Implementing Health Reimbursement Arrangements, some employers will see their annual premium reduced by 25% - 45%. Remember,  this is employer saved premium and whatever isn’t used, can roll-over to next plan year.

We've been servicing the employee benefits market of the New Jersey / New York area for over 20 years. Contact us and we’ll help you implement the process smoothly! 

We are knowledgeable professionals with over 20 years of experience.
We serve as your advisor, advocate and confidant to guide you through the complexities of all aspects of insurance/employee benefits.

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