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
Claims processing is all automatic with PriorityHRA. Here's how it works:
- One of your employees seeks a service that is HRA-eligible.
- The provider bills Priority Health.
- 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.