Benefit Allocation Systems, Inc. will begin administering Health Reimbursement Accounts (“HRAs”) to compliment its online enrollment and Flexible Spending Account (“FSA”) administration services effective April 1, 2012.
This important offering will provide clients with three valuable service level options: (1) HRA Standalone administration, (2) FSA Standalone administration and (3) Combined HRA and FSA administration.
Presently, BAS is accepting requests for quotes and is prepared to help existing and prospective clients engage for an April 1 effective date (later dates are available effective the first of any month).
Conversions from Current HRA Providers to BAS (Mid-year Conversions)
BAS is accepting mid-year conversions from both current and prospective clients and at no additional cost to its standard setup fees. The conversion process can be quick and easy without an interruption in services.
HRA Debit Card
BAS’ HRA solution includes integration with its Benny Card MasterCard®, as is presently available with BAS’ FSA programs. This single-platform debit card supports automatic electronic transfer of pre-tax dollars from an HRA when paying for qualified expenses and can accommodate both an HRA and FSA on the same card. This simplification empowers employers and their consultants to design strategic medical plan offerings to best combat rising health coverage costs.
BAS’s pricing will be extremely competitive and offer the same per participant price regardless of the design and combination of health FSAs and HRAs. The price per participant, with (or without) the Benny Debit Card will be $5.50 per month and employer group setup/renewal fee starting at $550. Important: There is no per employee per month (PEPM) charge; just the $5.50 per participant in the HRA/FSA.
HRA Design Flexibility
BAS will support standalone HRA designs and integrated HRA and FSA designs. BAS will support a wide range of HRA plan designs including plans with “Employee-Paid First Dollar Offsets” and “Annual Rollover Amounts.” BAS, through its Cobra Control Services, LLC subsidiary, will administer COBRA continuation coverage for an HRA, to the extent the HRA is a group health plan subject to COBRA continuation coverage requirements. Separate pricing for COBRA administration will apply.
Online Information with MyEnroll.com
BAS’ MyEnroll.com will provide HRA participants with comprehensive HRA balance, claims and EOB information online, as it does for participants in its FSA programs.
Health Reimbursement Arrangements, or HRAs, are employer-sponsored health plans with patient-directed features that give employees choice and control over their health care coverage. The IRS released guidance on HRAs in 2002 providing that HRAs meeting certain requirements would not be taxable to employees. In the approximately ten years since their inception, many employers find HRAs a welcome alternative to the traditional health plan structure. HRAs allow insurance advisers and health plan administrators the opportunity to design innovative programs of health plan coverage utilizing the fully insured, or self-funded health plans employers work with everyday.
BAS Product Development Position
When asked about offering HRA administration at this time and not earlier, BAS President and CEO Arthur S. Taylor commented “Over the past few years, we had not received any significant number requests to support HRAs; primarily because the major insurers in our region did not price HRAs competitively vis-a-vis PPO and HMO plans, so employers have been slow to adopt them. Thus, we focused on developing other services to support clients’ more immediate needs, such as location and consolidated billing and integration of States’ growing mini-cobra and federal COBRA extension rules. However, recent changes in these insurers HRA pricing has reversed the slow adoption trend. Since we own and develop MyEnroll.com with our own staff programmers, we are able to turn on a dime and quickly develop robust solutions, such as adding HRA capabilities.
Taylor elaborated “Any solution BAS offers needs to be highly scalable across small, medium and large employers because we have clients with fewer than 5 employees, and more than 35,000 employees, and everything in between. To be in a position to offer such a broad array of employers a viable HRA solution, we need to be certain that our call center, debit card, account setup, and online self-service portal (MyEnroll.com) are fully prepared for the many different, customized HRA pan design permutations we know exist in the market. We are pleased that we are prepared to service HRA plans with the highest levels of customer service across every facet of our service support model.”
BAS’s HRA product will be fully integrated with its MyEnroll.com enrollment and FSA claims processing system to assure a completely seamless benefit offering.
An HRA is an employer-funded health care arrangement. The general goal of an HRA plan is to put health care decision-making in the hands of the consumer, at the direction of the employer. Only the employer may contribute to an HRA, no employee salary reduction contributions are permitted.
An employee uses an HRA to be reimbursed for certain medical expenses incurred by the employee and his or her eligible dependents, up to an annual limit as determined by the employer. HRAs are not subject to the same complex limitations imposed on FSAs by the IRS. HRAs do not have to be subject to the FSA “use-it-or-lose-it” rule, and an HRA may be structured, by plan design, to allow employees to carry forward the unused portion of the maximum dollar amount at the end of a coverage period to increase the maximum reimbursement available in subsequent years.
Unlike an FSA, amounts paid for premiums for accident or health coverage may be reimbursed from an HRA. An HRA may also be offered to former employees. These key HRA elements give employers many options for structuring an innovative benefit plan design structure.
For more information on HRA services, please contact BAS