A Defined Contribution Approach to Health Benefits
The IRS issued guidance in 2003 that clarifies the favorable tax treatment of a “Health Reimbursement Arrangement” (HRA), which is funded by the employer and reimburses an employee for out-of-pocket medical expenses up to a specified dollar amount per year.
Unlike Flexible Spending Accounts (click for comparison), HRAs allow contributions to carry forward from year to year. However, as opposed to FSA's or Health Savings Accounts (HSA) (compare), only the employer may contribute to the plan.
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Consultation
- Develop plan design and benefit provisions
- Prepare draft of Plan Documents and SPD for counsel review
- Design of employee communication materials
- Ongoing consultation regarding plan design and language
Administration
- Process participant enrollment and election information
- Preparation of initial report of salary deferrals by benefit type
- Process reimbursement requests
- Provide participants with explanation of claims
- Remit monthly premiums to insurance carriers
- Quarterly spending and annual account statements
- Maintain accounting of benefits paid to each participant
- Toll-free number to our customer service personnel
- Quarterly employer reports
- Form 5500 preparation
- Centralized billing services
- Compliance testing and consulting
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