Health Reimbursement Arrangement

Want to offer health coverage for employees but can’t afford or qualify? A Health Reimbursement Arrangement (HRA) is a perfect alternative! An HRA offers small employers, 50 employee lives or less, an innovative and cost-effective way to provider benefits to employees and their families. Learn more how through the NPMA Exchange.

Offering a small employer HRA to employees allows them to use account dollars to pay their individual healthcare premiums and to reimburse any out-of-pocket cost they or their dependents may incur. In 2018 you as an employer can contribute up to $5,050 for an individual and $10,250 for a family. For employees to be eligible, the must have completed 90 days of service, be full-time employees over the age of 25, and residents of the U.S. Participating employees must maintain minimum essential health coverage to realize the tax advantage of the HRA, or the funds could be included as taxable income during any lapse in coverage. HRA funding amounts are reported on W-2s, and a Form 1095B is required.

For employers with over 50 lives, an HRA benefit is also a viable option and there are no contribution limitations.

With an HRA benefit the employer is not allowed to offer any other type of health coverage such as dental or vision. Voluntary products such as those offered through Transamerica for NPMA members are still available options.

For more information, please contact JerriLynn Cobb at JerriLynn@dkyoung.com.