I talk about health reimbursement arrangements all the time so people have started to ask, “are they worth the extra work in getting them set up?”
Absolutely! Let’s take a look at case study of a group we just worked on.
HRA/Health Reimbursement Arrangement Case Study
This is a recent case we worked on where the business found tremendous savings using an HRA. This group had another large increase with their health insurance carrier and they were ready to try something different. Two of the employees rarely use the plan, so they thought they may be wasting money on high premiums. The solution to this was the HRA.
With the HRA, they opted for a high deductible health plan and are going to reimburse employees for their claims as they are incurred. The best part is, it will work great whether the employees have zero claims or extremely high claims. With the change to a high deductible plan, the premiums were cut in half!
HRA Plan Setup
Premium Savings: $33,176 with new high deductible plan.
2 Single employees and 2 families
HRA Fund : $2500 per single and $5,000 per family.
HRA Fund: September through December 31 = $15,000
HRA Fund: Jan 1 through December 31, 2012, $15,000
Total HRA Fund: $30,000
The worst case scenario for this group is that every employee spends through their HRA allowance and it costs the company $30,000. They are guaranteed to save $3,000 but will likely save much more depending on actual claims usage.
Do you think this will work for your company? It works in most cases and can be a better setup for employees too. Just because you are saving thousands, doesn’t mean employees get a bad deal. Call me today and I will share more information on this setup can benefit everyone.