Health Reimbursement Arrangements

The following information is provided by RPG Consultants

Call them evolutionary or call them revolutionary, HRAs are the best news in healthcare benefits in years.  They provide benefits for employees and employers.

  • HRAs are the newest way for employers to give their employees freedom of choice in healthcare planning while controlling their own costs.
  • HRAs are similar to Flexible Spending Accounts (FSAs) except that employees do not lose their money at the end of the year. Unused dollars may be rolled-over into the next year!
  • HRAs are similar to Medical Savings Accounts (MSAs) except that HRAs are funded by employers, HRAs are available to employers of all sizes, and HRAs are flexible in design.

Sound good? They are good!

  • HRAs permit the employee to accumulate money for future healthcare needs such as retirement healthcare expenses.
  • HRAs allow employers to redefine employer-employee healthcare financing and responsibility.
  • HRAs allow employers to offer a high deductible plan and allocate the savings to the HRA for future employee-directed healthcare.

America benefits too!

  • HRAs are expected to reduce the number of uninsured in the U.S. by providing less expensive core coverage and active employee consumerism.
  • HRAs will provide money for COBRA premiums, which also will reduce the number of people who find themselves temporarily uninsured.

Isn’t this too good to be true?

  • HRAs are authorized by the U.S. Treasury Department and were announced on June 26, 2002.
  • HRAs are embraced by the leading practitioners in the employee benefits field as well as by the premier group in the field, the Employers Council on Flexible Compensation, headquartered in Washington, DC.

What are Health Reimbursement Arrangements?  Also known as Health Reimbursement Accounts and HRAs, these newly authorized plans offer great promise for both employers and employees.

  • HRAs are defined contribution healthcare plans, not defined benefit plans.
  • They are employer-sponsored plans that combine the best aspects of Flexible Spending Accounts (FSAs) and Medical Savings Accounts (MSAs).
  • HRAs allow employees to roll-over unused balances at the end of the year – so employees will not complain that they may lose their money.
  • HRAs do not require that employers advance claims payments to employees or healthcare providers during the early months of the plan year.
  • HRAs are provided with employer dollars, not employee salary reductions, so HRAs have greater employee acceptance.
  • HRAs permit the employer to reduce health plan costs by coupling the HRA with a high-deductible (and usually lower-cost) health plan.
  • HRAs even the playing field between the group purchasing power of larger employers and smaller employers.

We will be pleased to answer any questions you have or send over a proposal.

You can reach us at by phone at 407 924-7950, email at, or simply complete the proposal request form on our homepage.

Michael J. Marini, President & Financial Adviser, Orlando 401k Specialists