The Flexibility of HRAs!

The Flexibility of HRAs!

We have HRAs to thank for bringing about the ‘consumer driven healthcare’ revolution.  HRAs are in full force and employees and employers are embracing the concept of ‘consumer driven healthcare’.

On the “How HRAs Work for Employers” page we shared two different HRA plan designs that some of our members had created and were having success.  The HRA is helping many MMMA members lower health insurance premiums now and for years to come.  The two plans we previously reviewed were:

  1. THE BRIDGE PLAN.  The HRA bridge plan pays only for deductible items covered by insurance and provides a “bridge” for employee out-of-pocket expenses and insurance coverage.
  2. THE COMPREHENSIVE PLAN.  The HRA comprehensive plan allows the employee to pay all medical expenses not covered by insurance as the employee chooses from a set dollar amount decided by the employer.

1 A 3rd HRA Plan.  Since we have started to share the HRA plan ideas with our membership on how HRAs were working, we have received input on other plan designs.  One more plan design option might look like this. 2 3. THE INSURANCE PLAN.  The HRA insurance plan allows employees to pay for employer-provided insurance coverage or individually owned policies for health, disability, or long-term care insurance.  This plan allows for HRA unused funds to accumulate each year and be available to cover retiree health benefits.  This plan gives employees the option to use their HRA for current premium expenses or build up their account to pay healthcare premiums, long-term care insurance premiums, and medical expenses during retirement.

The employer can design a plan that allows unused contributions to roll forward each year.  At retirement, the employee could be given a choice to use the balance or an agreed upon balance each year from the employer to purchase long-term care insurance.

This third plan option drives home the fact that HRAs are extremely flexible and should be considered as an opportunity to take control of a runaway expense on your P&L statement.

Please contact Sheelah at the MMMA office , 636-537-1360 or (800) 467-MMMA (6662), or by email to Sheelah@mmma.org to learn how this new benefit plan can lower and control your health care costs.

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