Health Reimbursement Exchanges, and the various platforms thereof, including ICHRAs and QSEHRAs, are increasingly popular among budget-savvy businesses these days. A company might be offering an HRA this year because of the increased cost associated with offering group plans. Businesses explore the HRA options to find flexible and affordable ways to offer benefits to employees. And employees that have HRA programs through their employers are increasingly enjoying the reimbursement model, too. It’s proving to be a win-win.
If the HRA concept is new to you, you’ll likely have additional questions about how HRAs work. While you should always connect with your employer or dedicated HRA administrator for specific information, there are some general expenses you can expect to see covered as an approved reimbursement. And it’s these types of allowances that make HRAs popular among employees just as much as their employers.
Under the HRA, the employee enrolls in his or her own coverage, either via the Marketplace or directly from a health insurance provider. Then, as the employee incurs healthcare expenses, he or she submits receipt of those services to the HRA administrator, via the dashboard, or to the employer for reimbursement. Here are some of the more traditional refunds accepted by most HRA platforms.
Any out-of-pocket costs incurred for prescriptions are reimbursable. These include pain medication, insulin, or birth control. And while many insurance plans offer certain prescription coverages, there are independent pharmacy apps that provide even deeper discounts. Regardless of how the employee chooses to pay, those scripts are generally reimbursable through the HRA.
Annual Exams or Physicals
Most health insurance plans also offer free preventive care coverage for qualifying appointments, including annual exams or physicals. However, any out-of-pocket costs a patient may incur at that annual physical can, in turn, become reimbursable under the employer HRA. For example, should an annual visit result in a follow-up scan, there may be applicable coinsurance costs or copays. Those additional expenses are eligible for reimbursement under the HRA. Proof of the visit and services rendered is usually required to verify necessity and receipt of payment.
Mental Health Services
The pandemic, job layoffs, and economic hardships have taken a toll on America’s mental health. HRAs are also intended to help with the costs of mental health-related services, usually between a patient and a psychologist or psychiatrist. From general counseling to the treatment of mental disorders, these visits and costs can qualify as HRA reimbursements.
Other Acceptable Expense Reimbursements
The attractiveness of an HRA, and even more so the ICHRA, is rooted in flexibility and affordability. Businesses can carve out budgets and determine requirements and eligible expenses according to those budgets. Every company plan can be slightly different. But even these types of health-related expenses can be considered as reimbursable.
Crutches and Supplies
If an employee requires a cast, crutches, or sling as a result of a fall or accident, the HRA can reimburse those out-of-pocket costs. Other supplies can be eligible, too, including medicated toothpaste and some dental mechanisms. Need a bite guard for your TMJ? It’s probably reimbursable. Does your son need a splint for his ankle? Anything you pay out of your own pocket for prescribed treatment is likely covered under the HRA.
Meals During Treatment at a Medical Facility
HRAs are so flexible, and some platforms cover meals and other incidentals associated with a medical facility stay or treatment program. At the employee level, these types of reimbursements can be game-changers. While traditional health insurance plans can cover most of these hospital stays or extended treatment costs, they can still be burdensome because of these incidental costs. Having an option for reimbursement with an HRA program can make those much-needed services more attainable.
Substance Abuse Treatment Services
People can sometimes require hospital stays because of an accident or to treat a condition. And substance abuse treatment falls into these parameters, too. Substance abuse treatment facilities can seem expensive or out of reach for many individuals who desperately need them. Knowing there are HRA reimbursement options can inspire patients to take advantage of these often life-saving treatments.
More Non-Traditional Expenses
HRAs can assist employees with out-of-pocket costs beyond the healthcare invoice itself. And even healthy individuals who go most of the plan year without a service rendered can see huge benefits from an HRA reimbursement platform. Here are a few of the non-traditional healthcare expenses worthy of reimbursement.
Healthcare-Related Transportation Costs
Some healthcare services require patients to drive to neighboring towns or even across state lines. Luckily, for those who travel for care, the HRA can provide expense reimbursement. Gas receipts and public transportation costs can be eligible.
Monthly Premium Expenses
Healthy employees can benefit from HRAs, too. In fact, many types of HRA platforms allow for reimbursement of monthly premiums paid for health insurance coverage. In the most ideal scenario, an individual can qualify for premium tax credits and enroll in a plan via the Marketplace with considerable discounts in monthly premiums. And then, that same individual can submit payment receipts for the premiums paid each month for reimbursement from the employer.
What Can’t Be Covered by an HRA
Employers can dictate how their budgets are set up and certain parameters for their HRAs. But to qualify, there are IRS benchmarks in place. Any medical expenses associated with alleviation or prevention of a physical or mental ailment are eligible. However, cosmetic procedures, non-prescription supplements, and medications from other countries are not qualified. Maternity clothes, funeral services, gym memberships, nor marriage counseling meet the IRS requirements for reimbursements.
Employers are free to exclude any IRS-approved reimbursements, as well. So, employees should always verify the details before booking appointments, and companies with HRAs should be transparent about communicating what is and isn’t covered.
There are countless benefits to businesses offering HRAs as there are for the employees who leverage the reimbursements. If you think you need more help understanding how to navigate the basic framework of an HRA, W3LL can help!