Health Reimbursement Arrangement (HRA)

A Health Reimbursement Arrangement (HRA) is an employer-sponsored account administered by HealthEquity, Inc.* Employers can save money on health insurance premiums, payroll taxes and FICA taxes by offering an HRA to employees.

An HRA helps employees save for healthcare expenses and reimburses them and their families for eligible medical expenses. It’s a reimbursement program funded entirely by an employer to help make healthcare more affordable.

Employers decide:

• Contribution amounts,

• Frequency of contributions,

• Rollover options,

• And eligible expenses.

An employer can set up the HRA in several ways:

• 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 exhausted. 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 healthcare expenses out of pocket until they have paid a preset amount. When this threshold is reached, the HRA pays until the account is exhausted. Then, the employee pays out of pocket until the plan deductible is met. The health plan then pays according to coinsurance amounts.

• Payment is Shared – As the employee incurs eligible expenses, the health plan processes the claim, then sends it to your HRA for payment. The employee splits the cost with funds from the HRA. The HRA will automatically pay or reimburse the employee for a portion of the expense. When the HRA funds are exhausted, the employee pays any expenses until they reach their health plan deductible.

A Health Reimbursement Arrangement (HRA) works with any health plan type, and employers only pay if the employee uses the funds.

Blue Cross and Blue Shield of Louisiana (Louisiana Blue) offers groups multiple solutions for their employees’ savings and spendings needs. To learn more about these solutions, click here.

*HealthEquity is an independent company that offers savings and spending accounts to members of Blue Cross and Blue Shield of Louisiana, an independent licensee of the Blue Cross Blue Shield Association.