The Health Reimbursement Arrangement is ideal for businesses with 5 or more employees.  

• Controls annual fixed costs by lowering premiums an average of 40% annually.
• Pays for claims on an “as incurred” basis rather than in advance.
• Can provide for benefits not normally included in the plan design.

The HRA combines a high deductible insurance plan with a separate funding vehicle which is used to pay for day to day medical expenses.  Dependent on the insurance carrier and final plan design, an employer can normally lower the fixed cost of insurance premium by an average of 40%.  

The HRA funding vehicle is a non-interest bearing account owned by the company and is provided to the employee on a defined credit limit basis. Monies in that account are used on an as needed basis to reimburse expenses on behalf of the employee when those medical expenses are actually incurred. Any unused balance can either return to the corporation or roll forward to off-set future expenses.