Why are HRA’s becoming so popular?

For the past few years there have been major changes for the health care industry…and it’s still not over yet. Health insurance cost is still rising and it’s no surprise that more money is being put forward from consumers and employers alike.

A study recently done has found that Employer Health Benefits contributions to employee premiums have gone up 47% in the past five years. HRA’s (Health Reimbursement Accounts) are becoming more and more popular because not only does it reduce the cost, but it is a very appealing choice to the employee. An HRA is essentially a less-expensive higher-deductible plan. According to this same survey the enrollment for HRA’s has jumped from 4% in ’06 to 13% in ’10.

HSA (Health Savings Account) versus HRA (Health Reimbursement Account). Both have advantages, the difference for the employer is that certain HRA’s often have the choice of control over what is covered services and reimbursement. The unused money from the employee remains with the employer when the employee leaves that employer.

HRA’s also offer the employers a tax account that allows the employees and employers to save on the cost of health care. All employer contributions are 100% tax-deductible for the employer and the employee.

What is the bottom line here? HRA’s offer the employer tax breaks that significantly reduce the amount of money being spent, which then leaves that extra money for the employee who already has rich health care benefits.

Don’t think that HRA’s are only for employee benefits group. HSA’s and HRA’s aren’t limited to just group medical insurance. If you looking for any type of health insurance in San Jose, Los Gatos, Santa Clara, or the Campbell area you should give up a call. We deal with all carries (Kaiser, Anthem, Blue Cross, Cigna, Healthnet, Blueshield). So give us a call!

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