What is an HRA? Health Reimbursement Arrangement (HRA)

Finding Affordable Health Insurance Can Be a Challenge

Of all the benefits that an employer offers, health insurance is probably the one that employees value the most, and with good reason: health care in the United States is notoriously expensive, and a single emergency could saddle a patient with tens or even hundreds of thousands of dollars in medical debt. An employer-subsidized plan is a sensible option for employees. Not only does the employer pay at least 50% of the employee’s premium, but the remaining premium is tax-free and taken directly from the employee’s pay.

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Post - HRA vs Employer Sponsored Health Insurance

The Rising Cost of Employer-Sponsored Health Insurance

Unfortunately, in recent years, even those with employer-sponsored health insurance plans are feeling the pinch of rising healthcare costs. In the last five years, health costs for those who get health insurance through their work, many have seen their costs double! This outpaces inflation and wage increases. In fact, over the past decade, the amount that the average family with employer-sponsored health insurance pays for health-related expenses has grown twice as fast as their wages.

This increase is largely due to mandated coverages, rising deductibles, higher out-of-pocket limits, that you must pay before your health insurance kicks in. Sure, the employer is still paying a large portion of the premiums, but the amount that an employee has to pay before they can actually use that coverage, not to mention what they pay in premiums, has increased.

Buying Health Insurance with HRAs

In June of 2019, the U.S. departments of Health and Human Services, Labor and the Treasury published a final rule that will allow companies that don’t offer a group coverage plan to fund a special kind of health reimbursement arrangement called an individual coverage HRA. Rather than having an employer-sponsored health insurance plan, the employee can use the money from their ICHRA to purchase an individual health insurance plan on the public exchange.

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Who Benefits from ICHRAs?

While ICHRAs may seem a little unconventional, they offer some real benefits to both employers and employees. For the employers, the money contributed to ICHRAs is tax-free, and while there is a minimum amount that has to be contributed, it generally provides more flexibility.

Employees also benefit from ICHRAs. Rather than being stuck with whatever health insurance plan their employer chose, they can actually talk to a health insurance agent about their health needs and how much money they have to work with and find a health insurance plan that works best for them. They’ll have more options to choose from, giving them the opportunity to choose a plan that fits their lifestyle and will be accepted by their preferred health care provider.

Choosing the Best Health Insurance with Nevada Insurance Enrollment

The health insurance enrollment period for Nevadans is just around the corner, and if you’ll be purchasing an individual health insurance plan, now is the perfect time to talk to a health insurance agent. At Nevada Insurance Enrollment, we specialize in helping Nevadans find the right coverage for their health needs and budget.

Related Articles:

Employer Group Health Insurance Options Are Changing in 2020 with ICHRAs

Have you been offered Health Insurance at work?

Group Health Insurance vs. Private Individual or Family Health Insurance

Individual and Family Health Insurance in Las Vegas, Nevada 

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