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How Employers Use HRA Plans To Offset Higher Costs of Affordable Care Act (ACA) Premium Increases

Core HRA Plan Documents and Administrative Services

“The Deductible Gap Health Reimbursement Arrangement (HRA), coupled with a higher-deductible health insurance policy, is another way for employers to offset huge ACA premium increases and save thousands of dollars.” Gene C Ennis, President of Core Documents, Inc.

Bradenton, FL, December 12, 2013 – Core Documents has produced a new six minute “Executive Summary” YouTube video, explaining how employers are using HRA plans to reduce health insurance premium and save money. See the YouTube Video at:https://www.youtube.com/watch?v=UuyoSpapg3k

Employers are discovering that they can combine a Deductible Gap HRA with a higher-deductible health insurance plan, and thereby reduce health insurance costs. The employer benefits by saving money and reducing overhead, but the high-deductible effect to the employee is cushioned with an HRA. For example, if an employer moves to a $1,500 deductible instead of their old $500 deductible, the employee still pays the first $500, and the new Deductible Gap HRA will pay the new higher-deductible expense from $501 to $1,500. This completely shields the employee from the higher deductible expense. However, the employer realizes the premium savings on all employees, even though only 15-20% of employees will experience a deductible expense.

Click the following link to download Core’s HRA Group Premium Savings Calculator: https://www.coredocuments.com/docs/HRA_Premium_Savings_Calculator.pdf

This simple, one page worksheet allows any employer to compare the premium for a new high-deductible plan with their current lower deductible plan in order to identify potential savings. The worksheet will also allow the employer to estimate claims for a proposed HRA Deductible Gap plan. Participants only submit an HRA claim when they experience an extra deductible expense.

HRAs provide employers with a lot of flexibility in numerous plan design options, such as the Comprehensive HRA, the Limited HRA, and the Premium Reimbursement Arrangement HRA. Limits can be set on types of services reimbursed by an HRA. Defined dollar benefits contributed to a Comprehensive HRA can be made available to employees, either in a lump sum or in increments throughout the year. This is in contrast to a Section 125 Health FSA, where the employer can be liable for the full benefit amount on the first day of the plan. You can also choose to carryover unused HRA funds to the next plan year, or have all or a portion of the unused HRA funds forfeited at the end of the year.

Don’t be fooled by recently established imitators charging higher annual subscription plan document prices and exorbitant monthly per employee administration fees. Subscription service means you have to buy the HRA plan document every year whether you amend it or not. It comes with a built-in expiration date. You’re basically renting the plan document. It will take you years to quantify that this is not the most cost effective way to maintain a compliant plan document. Also, don’t get fooled into paying exorbitant per employee fees for administration.

The President of Core Documents, Gene C. Ennis has held:

  • Certification in Flexible Compensation, (CFC) by the Employers Council on Flexible Compensation,
  • a 218 Life and Health Insurance license offering Section 125 plans since 1989,
  • a Third Party Administrator’s (TPA) license administering ERISA self-funded health and welfare plans,
  • a Professional Employer Organization (PEO) license with co-employer responsibility for 500 work site employees, and,
  • a PEO Controlling Person’s license.

Core Documents retains the services of several ERISA Benefit Attorneys for up to the minute commentary on issues affecting plan document language and administration. Since 1997 our plan documents have been thoroughly reviewed by numerous CPAs and law firms who have found them to be clear, concise, compliant and cost effective.

Call: 1-888-755-3373

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Click PRWeb logo to download Press Release: https://www.prweb.com/pdfdownload/11420049.pdf


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