HRA – aka Health Reimbursement Accounts – this is a great way for employers to lower monthly health insurance premiums or offset a high renewal increase without sacrificing the quality of benefits they are offering their employees. The HRA is simply the employer purchasing a higher deductible plan that what they current have ( which lowers their monthly insurance premiums ) and agreeing to pay a portion of that deductible IF AND ONLY IF the employee ends up using the insurance. This a good way to offer a great plan to your employees and not break the bank. Think of it this way – Insurance premiums are a “Total Loss” – you must pay the premium and the money is gone. With an HRA, it’s “Potential Loss” – you save money on premiums by purchasing a higher deductible and then will only pay more IF your employees hit the portion of the deductible you’ve agreed to cover. I show the total liability for my clients that are on these plans so there are no surprises throughout the year.

HRA Example (pdf)

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