As health insurance costs continue to rise, more and more small and mid-size employers are looking for ways to take control of their healthcare costs. A health reimbursement account, or an HRA, is a way in which employers can step into self-funding and start to take some control. A health reimbursement account is an opportunity for the employer to self-fund a portion of the health insurance plan. Typically, employers will choose a plan with a higher deductible, higher co-pays, and potentially higher co-insurance, and will decide to self-fund that portion of the plan to take on some risk.
Companies that have considered self-funding, but are wary of some of the risks, might want to take a step towards self-funding with a health reimbursement account. By utilizing increased deductibles, co-pays and co-insurance and putting an HRA into place, an employer is taking the risk that the reduced premiums will outweigh the risks associated with increased utilization. The risk is that if utilization is high, the cost for the health reimbursement account could outweigh the cost savings and the premium differential.
What are some things to consider when employers are looking at instituting an HRA?
For advantages, the employer would start to see some insights into claims activity that they might not be getting if they’re fully insured. And of course, they have the opportunity for cost savings in good years. Some cons are that HRAs can be administratively burdensome, and, you have no idea whether or not your utilization will be high or low in the coming year.
It’s easy for us to provide an analysis to tell you what the best and worst year would look like within a health reimbursement account. Contact us at firstname.lastname@example.org to find out what your year might look like if you’d like to institute an HRA.
Feedback From Our Happy Customers
I wanted to take a moment and tell you how absolutely thrilled I am to have Innovative Benefit Planning as my broker. We moved over roughly a month ago and I have never received service like I have since making the transition. With so many employers being challenged with COVID19 and us making the move right in the middle, it could not have been more seamless. Everything was set up to exceed all expectations and it continues. Innovative Benefit Planning has taken the worry and stress away. It was truly the best decision for Title Alliance and I look forward to a long and productive partnership.
The Innovative team is well respected at AFS. My staff and I feel they are an extension of our HR team! Since implementation, they have always remained committed to assisting AFS with all of its healthcare needs; in fact, it doesn’t matter what time of day, they always respond in a timely manner.
Each year they come up with fresh material so our employee’s interest is always peaked. A few years ago, Innovative provided us with documentation to show that moving from a fully insured program to self-insured would be more cost effective for AFS, and it has been! Innovative has truly made our jobs easier so we can focus on other tasks.
As an HR professional, Innovative makes my job easier and benefits administration much less overwhelming than it would otherwise be.
They are truly a partner with me to make sure our team members have the best benefits and service around their benefits that we can offer. Innovative’s team is responsive, professional and resourceful. (They are at the forefront of knowledge in many areas, including ACA reporting and compliance, which can get highly complicated.)
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Their level of commitment just keeps getting better each year. They have more than met our expectations on renewal negotiations, response time, assistance with ongoing plans, open enrollment material, meetings, support, bill auditing, and wellness programs.
Since our partnership with Innovative Benefit Planning in 2017, it has been a seamless one. Innovative always provide options, suggestions and recommendations when it comes to our benefits renewal.
Innovative is always present even when open enrollment ends, their year round communication reminds me that I can always reach out for help at any time. Their professionalism is the utmost one can expect. My account representative Jenni is wonderful, courteous, knowledgeable and very helpful.
We have been dealing with Innovative Benefit Planning for many, many years. They have given us nothing but exceptional service.
We can pick up the phone or email them and they always resolve our questions and take care of our employees insurance issues in a very timely manner. They negotiate our insurance rates every year and have managed to reduce the increase every year. Every account manager we’ve had throughout the years have been great to work with.
I have been working with Innovative Benefit Planning for over six years. Previous to Innovative, I had used the same broker for about 25 years. I was used to doing everything myself during open enrollment with my previous broker.
When Innovative came on board, I was pleasantly surprised how “on top” of things they were. I never have to call them and bother them about getting rates to me for open enrollment, as they are in touch with our carriers on a regular basis, and they get me my information for open enrollment as soon as they receive it from the carriers.