HEALTH REIMBURSEMENT ARRANGEMENTS BENEFITS

2007-05-02 10:04:19

( Health )



What is Health Reimbursement Arrangements?

Health Reimbursement Arrangements are privilege account of employers that reimburse expenses they incur for paying medical expenses of their employees. It allows employers to help out employees who are participating under Health Reimbursement Arrangements regarding payment of their health care plans. Coinsurance and eligible deductibles are medical costs that employers share with their employees subject to reimbursement.

Employer Contribution

Employers contribute certain amounts for the healthcare plan of each employee into a Health Reimbursement Arrangements Account. They usually tie it with Consumer Driven Health Plans or Deductible Health Plans which require lower insurance premiums both for employers and employees.

Employers must comply with requirements similar to those required by other accident and health plans to maintain the tax free status of Health Reimbursement Arrangements. They must refer to the tax guide for employers regarding fringe benefits to know these requirements.

Benefits to Employees

Contributions are not deducted from employees. They avail reimbursement for eligible expenses related to their health care which is tax free. They are given a timeline to claim the funds put into Health Insurance Arrangements and claim reimbursements for medical expenses allowed under this type of individual voluntary arrangements between employers and employees. However, employees can only claim reimbursements for medical expenses within the amount of deductibles applied by their employers.

Eligible Medical Expenses

Amounts paid for health insurance premiums, long term health care coverage, and those not covered under other health plans qualify for medical reimbursements under Health Reimbursement Arrangements. Unconsumed funds for the year can be forwarded to the next year. Employees, however, cannot claim refund on these unused funds. These funds are solely for the purpose of reimbursing eligible medical expenses of employees.

Who Are Covered?

Health Reimbursement Arrangements can cover current and previous employees including their spouses and children. Retired employees can still be covered under this arrangement if they choose. However, self-employed individuals cannot request participation with organizations offering this arrangement.


All rights Reserved © Tradenet Services srl
Do not duplicate or redistribute in any form.