You’re likely all too familiar with the struggle of balancing employee health insurance needs and your company’s bottom line. Each year, you’re faced with difficult decisions as insurance premiums continue to rise. You want to offer competitive benefits to attract and retain top talent, but the costs can be overwhelming.
One Solution: Health Reimbursement Arrangements (HRAs)
HRAs offer a unique approach to managing health plan costs. By implementing an HRA alongside your existing health insurance plan, you can potentially save your company significant money while maintaining or even improving employee benefits.
How HRAs Work
- You choose a higher-deductible health plan, which typically comes with lower premiums.
- You set aside a predetermined amount of money for each employee in an HRA.
- Employees use this fund to cover out-of-pocket medical expenses, including their deductibles and copayments.
- Your company only pays for the healthcare expenses actually incurred by employees, rather than paying high premiums for coverage that may not be fully utilized.
Real-World Success: A Case Study
Consider the experience of a client of ours with 80 employees enrolled in their health plan. By implementing an HRA strategy:
- They kept the same insurance carrier, ensuring continuity of care for employees.
- Employee deductibles remained unchanged, maintaining the level of coverage.
- The company saved a minimum of $80,000 on their health insurance costs!
This represents a significant reduction in expenses without sacrificing the quality of employee benefits.
Why HRAs Are Often Overlooked
You might wonder why other insurance brokers don’t often discuss HRAs. There are a few reasons:
- Complexity: HRAs require a little extra administrative work than traditional plans.
- Lower commissions: Brokers may earn less on HRA plans compared to traditional high-premium plans.
- Lack of familiarity: Some brokers may not be well-versed in HRA strategies and their benefits.
Benefits for Your Company
By implementing an HRA, you can:
Reduce overall health plan costs
Gain more control over your company’s health insurance spending
Offer flexible benefits that can be tailored to your workforce’s needs
Take advantage of tax benefits, as HRA contributions are tax-deductible
Benefits for Your Employees
Your employees will appreciate:
Lower out-of-pocket costs for medical expenses
The ability to keep their current doctors
Tax-free reimbursements for qualified medical expenses
Potentially lower payroll deductions for health insurance premiums
Taking Action
By committing to explore HRA options and other alternatives, you’re taking a proactive step towards managing healthcare costs while maintaining quality coverage for your employees. Don’t let complacency or the perceived convenience of automatic renewals prevent you from optimizing your health insurance strategy. Take control, explore your options, and unlock the potential for significant savings and improved benefits with solutions like HRAs.