3 ways to access HRA funds

3 ways to access HRA funds

As many know, a Health Reimbursement Arrangement (HRA) is an employer-funded account that helps pay for a medical plan’s deductible and co-insurance expenses. There are three ways to access an HRA. Here they are as follows.

  1. Filing an electronic claim: this can be submitted by signing into your NueSynergy account.
  2. Filing a paper claim: a paper claim along with a copy of Explanation of Benefits (EOB) can be emailed to NueSnergy. A paper claim can be obtained by signing into your NueSynergy account or by calling NueSynergy’s customer service team (855-890-7239).
  3. Providing documentation: A copy of your EOB from your insurance company is required to approve any claim for reimbursement.

For more information on accessing HRA funds and about this account in general, check out this handout.

3 ways to access HRA funds

What employers should know about HRAs

Two months ago, NueSynergy wrote about several Health Reimbursement Arrangement (HRA) FAQs to keep in mind. Now, taking it a step further, NueSynergy will discuss what employers, specifically, should look for in regard to an HRA. Here it is as follows:

An HRA can be paired with any health plan with no limitations

This means that high-deductible health plans (HDHPs) are not required in order to offer this account.

What happens to the funds if my employee leaves the company?

HRA funds are not portable. Therefore, if any funds become unused then any remaining amount returns to you (employer).

An employer can only contribute funds to an HRA

This also means that owners and partners cannot participate in this account. Per IRS guidelines, anyone with two percent or more ownership in a schedule S corporation, LLC, LLP, sole proprietorship, or partnership may not participate. If you would like to provide an opportunity for your employee to save for additional medical expenses tax-free, then suggest them to enroll in a Flexible Spending Account (FSA).

As an employer, can I choose proration for new hires and family status change?

Yes. You can prorate contributions as long as it occurs throughout the year.

When does an HRA begin paying for an employee’s expenses?

An employer can either allow an HRA to pay before the employee meets any deductible, or it can be set up so that the employee has to meet a certain amount of out-of-pocket expenses before the HRA begins to pay.

3 ways to access HRA funds

5 HRA FAQs to keep in mind

Health Reimbursement Arrangements (HRAs) are tax-advantaged, employer-funded accounts geared to help pay for qualified medical expenses not covered by a health plan. Months ago, NueSynergy explained the benefits of an HRA. Now, it’s time to discuss five frequently asked questions relating to this account.

FAQ #1: How much can an employer contribute to an employees’ HRA?

An employer can contribute any dollar amount, so long as it’s above a minimum annual commitment of $250 per employee. This commitment is a promise-to-pay, with funds allocated only if and when an eligible claim is incurred.

FAQ #2: When does an HRA start paying for an employee’s expenses?

The employer has two options. They can either allow the HRA to pay before the employee meets any deductible, or they can set it up so an employee has to meet a certain amount of out-of-pocket expenses before an HRA begins to pay.

FAQ #3: Does an HRA provide a tax benefit for employees?

Yes. HRA funds are contributed to employees on a pre-tax basis. This means disbursements aren’t included when calculating taxable income. For this reason, employees cannot claim an income tax deduction for expenses that haven’t been reimbursed under an HRA.

FAQ #4: Do HRA contributions have to be made in equal amounts each month?

They can be, but an HRA can also make contributions available Day 1 of the plan. Regardless of which method, an employer holds the money until qualified expenses are incurred and then reimbursed.

FAQ #5: What happens to HRA funds if an employee leaves the company?

Since funds are funded by an employer, any funds go back to them if an employee terminates for any reason.

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