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What types of HRAs are available?
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- What types of HRAs are available?
- An employer can set up the HRA in several ways. The two most popular include:
- HRA Pays First – At the start of the plan year, the employer funds the HRA up to a set amount. As the employee incurs eligible expenses, the employee pays them and the HRA reimburses the employee with employer funds until the account is used up. The employee then pays for medical expenses out of pocket until the plan’s deductible is met. The health plan then pays according to coinsurance amounts.
- Employee Pays First – The employee pays for health care expenses out of pocket until they have paid a preset amount. When this threshold is reached, the HRA pays until the account is used up. Then, the employee pays out of pocket until the plan deductible is met. The health plan then pays according to coinsurance amounts.
