There are so many layers to available health insurance these days. It can be difficult to navigate your options when you aren’t sure about the terms or have questions about which plans might be best for you. And there aren’t just traditional plans to consider, either. There are HRAs, QSEHRAs, Medicaid, and Medicare options, too. The good news is you’re not alone, and there are some great resources to help you unravel the technicalities. And today, we’ll walk you through HRAs and Medicare to help you better understand just how it all works.
Understanding Medicare Coverages
Medicare is a federally managed health insurance program designed for people who fit specific criteria. Thousands of Americans qualify and leverage the various coverage benefits Medicare provides.
Who Is Eligible for Medicare?
Not everyone will automatically meet the eligibility requirements for Medicare coverage. However, there are clear criteria that may apply to you. For example, anyone of the age of 65 or older qualifies for Medicare. Also, younger individuals with certain disabilities can be granted access. Americans with other end-stage conditions, including permanent kidney failure or End-Stage Renal Disease (ESRD.)
How Many Medicare Coverage Types Are There?
Medicare offers various segments of coverage. Medicare Part A is considered hospital insurance and provides coverage for skilled nursing facilities, hospital stays, and even some home healthcare services. Medicare Part B covers more medical services, like doctor visits, supplies, and preventive care services. Medicare Part D refers to the federal health insurance coverage of prescriptions and also includes flu shots and vaccines. Each of these coverage offerings requires qualification first, and also a monthly premium to maintain benefits.
Medicare & Medicare Advantage
With Medicare coverage, once you qualify for eligibility, you can choose between two primary options. There is original Medicare and also Medicare Advantage (also referred to as Medicare Part C.) Original Medicare plans allow participants to visit any provider or facility. These plans cover doctor visits, scans, tests, and outpatient procedures. Medicare Advantage plans cover the same types of services but have fixed providers and networks that patients can use. Under Medicare Advantage coverage, any providers patient use outside of the provider networks may require more out-of-pocket costs.
Understanding Health Reimbursement Arrangements (HRAs)
Health Reimbursement Arrangements (HRAs) are not health insurance plans. Instead, an HRA is a spending account created, managed, and owned by an employer. The employer contributes to this spending account, which can then be leveraged by the employee in the form of qualified expense reimbursements.
Different HRA Accounts
Companies of all sizes offer HRA accounts to their employees. And to accommodate the various types of employer organizations and employee options, there are several different types of HRAs. One of the most popular is the QSEHRA, for qualified small employers. But there are also individual coverage HRAs, group HRAs, and Excepted Benefit HRAs. Some companies use retiree HRAs or specify dental and vision HRAs, as well. To know what kind of HRA your company offers, consider discussing the benefits with your employer’s benefits coordinator or Human Resources contact.
You Must Select a Health Insurance Plan to Qualify
Having an HRA available to you through your employer doesn’t mean you have health insurance. In fact, to even use the expense reimbursement platform offered through your HRA, you have to first pay for a health insurance plan. Plans are available via the Marketplace right now during open enrollment. You can browse today through December 15th to make your health insurance selections. But again, you can’t begin to tap into your HRA benefits until you have documented proof of your insurance enrollment.
What Medical Expenses Can Be Reimbursed
Companies have complete discretion about how they establish their HRA parameters. Because the company owns and operates the accounts, the company decides what constitutes a qualifying expense for reimbursement. These accounts are IRS-approved, tax-advantaged, and entirely employer-funded. So to know what your HRA covers, you’ll want to connect with your dedicated benefits contact at work. Many plans cover medical expenses associated with prescriptions, doctor visits, and even the monthly premiums you pay for health insurance can be eligible for reimbursement.
How HRAs and Medicare Work Together
If you qualify for Medicare and are also working for a company that offers an HRA, you may be wondering how the two programs can work together. In either platform, a minimum essential coverage is required. And combining the perks of both Medicare and HRAs is pretty complex.
If your employer offers an independent coverage HRA (ICHRA,) you may be able to use those expense reimbursements to cover premiums you pay for Medicare or Medicare supplemental health insurance, in addition to your actual medical expenses. Under most plans, premiums for Medicare Parts A through D are eligible for reimbursement. But remember, you can’t tap into that ICHRA until you first qualify and enroll in a Medicare plan, and Part B doesn’t qualify for minimum essential coverage as a stand-alone supplement.
Similar to qualifying for ICHRA, if your employer is offering a QSEHRA, you’ll first need to enroll in a health plan before leveraging reimbursements. If you qualify for Medicare, as well, and meet those minimum essential coverage benchmarks, either with Medicare Part A or Medicare Part C (Medicare Advantage,) you can use the QSEHRA benefits. Part A doesn’t usually require a premium, but in the few instances it does, the premium payment would be a submittable expense. Check with your employer to better understand the guidelines outlined by your HRA type.
How to Submit for Reimbursement
For Medicare authorized premiums, as well as traditional expenses associated with copays, deductibles, prescriptions, and approved health services, HRA reimbursement is possible. Each company offering an HRA will have specific instructions for how to submit proof of those out-of-pocket costs. There is usually an employee portal that can be accessed, and receipts are typically the best documentation. Explanation of Benefits, as well as other supporting documentation, may also be required.
If you’re still scratching your head about where to begin, we might be able to help. Browsing the Marketplace for available health insurance plans, as well as calculating any additional tax benefits, is easy when you start with W3ll. And understanding the complexities of how Medicare benefits and HRAs can work together can seem less confusing when you have a little free guidance.