Hras May Be A Good Thing To Offer Employees

2008-10-20 Word Count: 389 Category: Insurance

Cutting health care costs in half would certainly get your attention wouldn't it? Do this by implementing Health Reimbursement Arrangements (HRAs). This would be a win-win situation for both the business owner and the employees.

Sky rocketing health insurance premiums have everyone worried and when a chance comes up to save money, why not take the brass ring and run with it. You may have noticed that as health care insurance premiums soar, fewer businesses offer group coverage to their workers.

For a smaller company with relatively healthy employees, setting up HRAs is a great way to allow workers to get permanent, portable individual health insurance for a lower cost than typical group coverage.

The HRAs, also called Section 105 plans, are basically an agreement by the employer to pay the employee for their health insurance premiums and other stated medical expenses. It's a tax-free benefit for the worker.

Here is how this works: family and individual health insurance plans are underwritten. The insurance company then has options to exclude various conditions or decline applications. These are up to 50% less expensive than group plans. That is saving serious money.

If you want to keep your employees, offering them good benefits will keep them happy. Although group insurance used to be the way to go, this does seem to be changing, as it's too expensive for some smaller businesses.

With the HRA the employer is taken out of the middle, leaving workers with their own individual private coverage that is totally portable. It means you pay the employees directly for their health insurance expenses.

There is no plan to manage and you won't have to shop every year for coverage etc. Another added bonus is when workers have their own coverage there are no COBRA issues when they leave. Less hassle, fewer headaches and less money! It couldn't get much simpler than that.

Talk about easy to work with as well. All an employer has to do is outline what expenses they will pay back to the employee and how much will be paid back. The employer might say they'll cover up to $400 a month and any unused portion will accrue for later expenses.

HRAs are definitely worth checking out and may save you quite a lot of money.

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Bradley Palmer is with Grouphealthflorida.com offering Florida Group Health Insurance. To learn more about group health insurance, visit www.grouphealthflorida.com.