How HRAs work and why

Let's walk through a scenario of how our small group HRA works

The health plan (employer): Jennifer, a flower shop owner, chooses our PriorityHRA HMO 2000 plan as health coverage for her employees. This plan includes:

  • Deductible - $2,000 annually
  • Coinsurance - 30%
  • Copayments - Vary based on service
  • Out-of-pocket maximum - $5,250
  • Employer contributes the second $1,000 dollars to the deductible

The employee: Kali, a single woman who manages Jennifer's flower shop, gets a cold in January and pays a copayment when she visits her primary doctor. In April, Kali has in-network outpatient surgery that costs $1,500, then a follow-up outpatient procedure that costs $1,000.

Who pays for what:

  • Doctor visit: Kali pays a $30 copayment (HRA does not apply)
  • Outpatient surgery that costs $1,500:
    Kali first pays $1,000 (toward deductible)
    Employer then pays $500 (toward deductible)
  • Follow-up outpatient procedure that costs $1,000:
    Employer pays $500 towards rest of deductible
    Then Kali pays $150 (30% of the remaining $500 billed cost)
    Then Priority Health plan pays $350 (70% of the remaining $500 billed cost)
  • Employer total costs: $1,000
  • Employee total costs: $1,180

Processing claims

Claims processing is all automatic with PriorityHRA. Here's how it works:

  1. One of your employees seeks a service that is HRA-eligible.
  2. The provider bills Priority Health.
  3. We'll apply the services to the HRA and health plan. If the HRA is supposed to make a payment, we'll mail a check directly to the provider.

You or your employees don't need to submit any paperwork requesting reimbursement.