What is a Health Reimbursement Account (HRA)?
A Health Reimbursement Account, also known as a health reimbursement arrangement, is an IRS-approved, tax-advantaged health benefit plan that reimburses for out-of-pocket medical expenses such as deductibles, co-insurance, and other qualified medical expenses.
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Who is Eligible to Participate in the HRA?
You are eligible to participate in the HRA if you meet the following qualifications:
- You are on the SPU High Deductible Health Plan (HDHP) and elect the HRA plan option
- Only dependents that you cover on the HDHP medical plan can have their eligible expenses reimbursed by the HRA
How does the HRA work with the High Deductible Health Plan (HDHP)?
The HRA and HDHP work together in the following way:
- SPU Contributes to the HRA: Once you have enrolled in the HRA, SPU will deposit a lump sum into your HRA on your behalf (see annual contribution amounts below). These funds are to be used for qualified health expenses for you and any other dependents that you cover on the plan.
- Your Share before the Deductible: If you use all of the funds deposited in your HRA before you hit the deductible, you are then responsible for 100% of the cost of expenses up to the deductible.
- HDHP and Coinsurance: Once you have hit your deductible, the High Deductible Health Plan will kick in with the coinsurance of 90% (for in-network providers) or 60% (for out-of-network providers). This means that for in-network providers, you will be responsible for only 10% of the cost and the plan will pay the other 90%.
- Out-of-Pocket Maximum: Once all of your eligible expenses (deductible and co-insurance) reach the plan's out-of-pocket maximum, the plan will pay 100% of approved costs for the remainder of the plan year.
Preventive care is covered at 100% at all times, subject to the Preventive Care guidelines of the insurer.
What are the 2020 Annual Contributions that SPU will make to the HRA?
For those who enroll in the HRA for the full year (January 1, 2020 - December 31, 2020), SPU will make the following amounts available:
|Employee Only||Employee & Dependents|
|2020 Annual Contribution||$1,008||$2,016|
For those employees who enroll throughout the year, the annual contribution will be pro-rated based on the number of eligible months.
- EXAMPLE: If a new employee's benefits are effective on September 1, they will have 4 eligible months (September - December) and their 2020 Annual Contribution would be pro-rated to $420.
How does the HRA Compare to the HSA?
|Who is eligible to make contributions?||SPU only||SPU and the employee|
|How frequent are the contributions?||One lump sum at the beginning of the plan year / eligibility.||Contributions are made per pay period throughout the year.|
|Does the money in the account roll over or go away at the end of the year?||Unused funds roll over from year-to-year, but only if you re-enroll in the HRA every year.||Funds do rolls over from year-to-year if unused, remain in the account even after eligibility ceases.|
|Do I get to keep the money in the account if I leave the University?||No - unused funds will be returned to SPU.||Yes - all of the money left in the account is yours.|