Benafica Health Reimbursement Arrangement (HRA) Services
HRA’s provide EMPLOYER flexibility
and EMPLOYEE peace of mind.
HRA administration includes the following:
- Customization of HRA plan & documentation for each employer.
- Employee roll-out meeting
- Mass population mailing for general notification
- Personal Benefit Account set up for each employee
- New hire notification
- Monthly ACH billing to employer
- On-going processing of reimbursements submitted by employees
- Employee reimbursement made via Electronic Funds Transfer into each employee’s personal bank account
- Change in reimbursement notifications
- Effective HRA reporting
- Electronic document archives for seven years
- Integrated solution, powered by our proprietary software system
Defined Contribution Plan
Reimburse your employees – tax free for health insurance
and other medical expenses – a unique option
How does the Benafica Defined Contribution plan work?
- A Personal Benefit Account (PBA) is established for each employee.
- A monthly benefit allowance is made by the employer and deposited into each Personal Benefit Account.
- With assistance of personal benefit counselors employees select their insurance plans for health, Medicare, and more.
- Insurance premiums and other qualified expenses are reimbursed to employees tax free from Benafica.
Download our Ebook to learn how Benafica works with your employees to get them the flexibility they need.
Employer’s Defined Contribution
- Select the appropriate HRA (Health Reimbursement Arrangement) vehicle that best fits your organizations goals.
- HRA options in 2020 have been expanded by the federal government, each option with different criteria. We’ll guide you though these choices.
- Employee Classes
- Give different contributions based on multiple factors, including job criteria, family status, locations, and more
- Set your budget
- Make monthly tax free contributions to each employee’s Personal Benefit Account through the use of your Benafica HRA.
- Stay compliant with required employee notices and annual reporting from Benafica.
- A Personal Benefit Account (PBA) is established for each employee.
- A benefit allowance is made into each PBA from the employer each month.
- With assistance of personal benefit counselors employees select their health insurance plans and other qualified insurance plans
- Employees upload their receipts to Benafica, and are reimbursed by Electronic Funds Transfer into their own bank accounts for individual health insurance premiums and other qualified medical expenses.
What is an HRA?
A Health Reimbursement Arrangement (HRA) is an employer funded health benefit account that reimburses employees for out-of-pocket medical expenses, and in some cases for certain insurance premiums.
All HRA dollars are tax deductible to the employer, and in most cases income tax free to the employee.
Check out our ICHRA and QSEHRA Reimbursement Cheat Sheet to learn more.
There are six kinds of HRAs available:
- Qualified Small Employer HRA, aka QSEHRA. Allows small employers under 50 employees to reimburse tax free for individual health insurance and also for coverage under a spouse’s group health Insurance plan, short term medical plans, and sharing ministry plans. A 2020 contribution cap of $5,250 for single employees and $10,600 for families exists.
- Individual Coverage HRA, aka ICHRA. Allows employers of any size to make a tax free contribution of any size for individual health insurance and for other qualified medical expenses. ICHRA’s satisfy the ACA employer mandate for ACA compliance if set up correctly.
- The Excepted Benefit HRA, aka EBHRA. Must be offered in conjunction with a traditional group health insurance plan, although employees are not required to be enrolled in the group health insurance to participate in the EBHRA. Employers in 2020 can contribute a maximum of $1,800 per year. An EBHRA can reimburse for dental and vision coverage and short term coverage. It can also reimburse for other medical expenses
- The Group Coverage HRA. Also called an Integrated HRA. Must be offered in conjunction with a traditional group health insurance plan – usually a high-deductible plan. It reimburses for employees tax-free to help cover their deductibles, co-insurance amounts, and other approved medical expenses. Can roll over year to year.
- The Retiree HRA. Designed to help retired employees pay for plan-eligible medical expenses during retirement. Retirement expenses can include COBRA premiums, and premiums for Medicare Part A, B, and D, and a Medicare Advantage Plan or Medicare Supplement plan.
- Dental/Vision HRA. Designed exclusively for employers who want to reimburse for Dental and Vision expenses. Can roll over year to year.
Benafica works with each employer to determine which HRA is most suitable for each organization. Company size, budget requirements, and related insurance preferences are key factors.
HOW DOES AN HRA WORK?
- Depending on the HRA chosen, the employer designates which reimbursable expenses will be approved.
- Depending on the HRA chosen, one or multiple job classes are designated.
- A contribution amount per job class is established.
- An employer sets aside a per employee per month amount of money with Benafica.
- After an employee pays for designated reimbursable expense, they can submit for reimbursement from Benafica.
There are many advantages for employers to offer HRAs.
|Cost Control||Employers chose each year how much to contribute to employee’s HRA accounts.|
|Tax-Advantaged||Employer contributions to the plan are 100% tax deductible.|
|Flexibility||The employer Is the plan sponsor and the sole contributor, and the employer Is allowed to design a plan that fits their company.|
|Low Risk||Each reimbursement claim is filed and adjudicated, reducing the potential for benefit fraud.|
|Recruiting Talent||An Employee Benefit package that includes an HRA can help an employer attract and retain talent.|
|Tax-free Reimbursement||When an employee files a claim for a qualified medical expense, the reimbursement is tax free.|
|Does not Affect Income||Employer contributions do not count toward the employee’s gross income.|
|Personal Healthcare Freedom||Individuals have greater choice in their health care services.|
|Lower Healthcare Costs||Costs are lower from using tax free dollars.|
Benafica explains the specific choices for each HRA and provides appropriate education and guidance to arrive at a HRA Plan Document.
Benafica’ s Commitment
Benafica’ s commitment extends not only to you as the employer, but also to your employees.
As an employer you’ll feel confident that your organization is compliant in all matters related to HRA administration. And you’ll also feel confident that both your employees are being treated with the highest level of professionalism.
Benafica’ s HRA administration system is powered by our proprietary software system.
This modern technology allows for:
- Customer Support tickets and tracking
- Cloud based document storage of all documents and key communications
- Auto-generated employer billing and late notices
- Auto-generated payments back to Employees
- Web portal for Employer reporting of benefit changes