How HRAs reimburse qualified expenses
How HRA reimbursements work with different parts of your healthcare coverage.
PriorityHRASM has four simple setup options:
- The HRA allocation
- Who pays first
- What expenses are reimbursable - for example, deductible by itself or coinsurance and deductible
- Whether or not HRA dollars be carried into future years
When both coinsurance and deductible are reimbursed
HRA dollars come from one source, and once members begin using their funds, they can't stop until the funds have been exhausted. This means you can't designate a portion of the HRA funds to go toward coinsurance and the other portion to go toward deductible. You have to reimburse deductible and coinsurance continuously.
Here are some examples of HRA reimbursement for a medical plan with a $2,000 deductible and 80% coinsurance:
PriorityHRA reimbursement that works - Employee pays the first $500 of the deductible.
- You designate $2,500 in HRA dollars to be paid out in deductible and coinsurance expenses until the funds are exhausted.
OR
- Employee pays the first $500 of the deductible.
- You split the rest of the deductible with the employee and pay 80% of the coinsurance until the funds are exhausted.
In either case, the HRA is only "turned on and off" one time and takes care of both the deductible and coinsurance.
PriorityHRA reimbursement that doesn't work - Employee pays the first $500 of the deductible.
- You pay the remaining $1,500 of the deductible.
- Employee pays the first $500 in coinsurance.
- Employer pays $1,000 in coinsurance responsibility.
In this case, the HRA is turned on and off twice, once for the deductible and once for the coinsurance.
Other HRA reimbursement information
- When an HRA reimburses for coinsurance, it pays for any claim that is a percentage, including in- or outpatient hospital claims, substance abuse treatment, durable medical equipment, prosthetics and orthotics, etc.
- This means the HRA could pay for claims that don't apply toward the out-of-pocket maximum.
- Large groups (51+ eligible members) can exclude services from HRA reimbursement and the member will still have coinsurance or deductible responsibility for those services. (This is called carving out).
In-network vs. out-of-network reimbursement
HRAs are automatically set up to reimburse both in-network/preferred and out-of-network/alternate claims on PPO and POS plans. Our system doesn't differentiate between in- and out-of-network claims. You do have the option to set your HRA up to pay in-network/preferred claims only.
Contact your sales representative or agent if you'd like to do that.
Example: You can't pay out $1,000 in HRA dollars for in-network claims and $500 on out-of-network claims. You would have to put a total of $1,500 in the "bucket" and the money could be used for in- or out-of-network claims.
