What are the disadvantages of an HRA?

  • 1) HRA Plan Setup. The first potential issue is actually setting up the HRA plan properly. …
  • 2) Substantiation Requirements. …
  • 3) Additional paperwork and ID Cards. …
  • 4) First year claims exposure. …
  • 5) Cash Flow Issues. …
  • 6) Employee Complaints. …
  • 7) Eligible Employees.
12 Jun 2020

Why would I want an HRA?

HRAs are owned by the employer. Essentially, they're an arrangement—not an account—between you and your employees. With an HRA, you provide a tax-advantaged reimbursement allowance that your employees can use when they incur a qualified medical expense such as a health insurance premium or other out-of-pocket expenses.

What can I use my HRA for?

  • Monthly premium payments.
  • Payments toward a deductible.
  • Copays.
  • Routine doctor's visits.
  • Hospital expenses.
  • Dental care.
  • Blood pressure monitors.
  • Vision care, including eyeglasses, contact lenses and exams.

What are the disadvantages of an HRA?

  • 1) HRA Plan Setup. The first potential issue is actually setting up the HRA plan properly. …
  • 2) Substantiation Requirements. …
  • 3) Additional paperwork and ID Cards. …
  • 4) First year claims exposure. …
  • 5) Cash Flow Issues. …
  • 6) Employee Complaints. …
  • 7) Eligible Employees.
12 Jun 2020

Whats the difference between an HRA and HSA?

The money in an HRA is provided solely by the employer. HRAs are usually unfunded notional accounts, with no cash value. An HSA is a tax-advantaged account that can be used to pay for IRS-defined health care expenses, including long-term care and COBRA premiums.

Leave a Reply

Your email address will not be published. Required fields are marked *