Employer Sponsored HRA

HRAs have been referred to by many names over the last few years such as personal savings accounts, personal care accounts, defined contribution plans, or consumer-driven health care plans.

The confusion ended in 2002, when the IRS finally issued guidelines in Notice 2002-45 and Revenue Ruling 2002-41 for employer-provided medical reimbursement accounts and called it the Health Reimbursement Arrangement, or HRA.

We provide employers with everything they need to successfully establish an HRA plan. You'll receive a complete Plan Document required by the IRS, a Summary Plan Description for distribution to all eligible employees required by ERISA and the Department of Labor, Election and Claim Forms, Resolution to Adopt, and complete Administrative information. Talk to one of our representatives to see if your business qualifies for an HRA plan.

Self-Employed Section 105 HRA

One way the self-employed can reduce the high cost of health insurance and out-of-pocket medical expenses is to establish a Section 105 HRA plan. Section 105 HRA plans are Medical Expense Reimbursement Plans that allow you to save substantial tax dollars on insurance premiums and out-of-pocket medical expenses not covered by insurance.

Section 105 HRA plans are designed specifically for small business owners that can legitimately hire their spouse. Because the spouse/employee can be reimbursed for family expenses the employer indirectly benefits as well. This type of plan is made possible by Section 105 of the Internal Revenue Code, Revenue Ruling 71-588 and IRS Letter Ruling 9409006. Talk to one of our representatives to see if you qualify for a Self-Employed Section 105 HRA plan.

Employer Sponsored Section 125 Plans

The Section 125 Cafeteria Plan has three Plan components - the Premium Only Plan, the Health FSA, and the Dependent care FSA all combined into one Plan Document.

The term Cafeteria Plan came about as employers allowed each employer to spend a preset employer-funded budget each year for benefits available in the Plan. For example the employee may be allowed $2,000 per year in Cafeteria Benefit Credits. The employee can choose to spend that amount on dependent care, unreimbursed medical expenses, or on any of the insurance programs such as dental, vision, term life insurance, etc. Much the same way you would pick and choose items from a cafeteria where you only choose those food items you want.

A Health Flexible Spending Account allows employees to use pre-tax dollars to pay for medical bills not covered by their insurance.

The Health FSA plans can also be offered in conjunction with a POP and/or a Dependent Care FSA. The FSA is a budgeting tool that can help take care of out-of-pocket expenses such as dental and optical care, insurance deductibles, co-pays, and prescription drugs. Like a POP, the FSA helps pay for itself by increasing employee take-home pay while decreasing employer payroll taxes.