Podcast: Tom Talks- July 2019 New HRA Models

Join us as Tom educates us about the new types of Heath Reimbursement Arrangements (HRAs) that will take effect on January 1, 2020.

“How am I going to pay for that?” I’m sure you’ve found yourself whispering (or yelling) this question at the universe at one point or another in your life. When it comes to healthcare costs, one way the universe has answered is with Heath Reimbursement Accounts.

Health Reimbursement Accounts are a way for employers to provide funds for employees to pay for healthcare expenses, and in some special cases, to pay for medical insurance premiums. These seem to function just fine for those that implement them, but new legislation has expanded options for HRAs.

In this installment of Tom Talks, Tom will give listeners insight into the current model of HRAs and the changes for 2020.

Here are some highlights from the podcast:

What are some things HRAs can help pay for? (2:00)“Some of the covered items are prescription medications, physical or medical exams that you might have every year…birth control, phycologist and psychiatrist meetings that you have, and, always very popular, your deductibles, your copays, your coinsurances, and your out-of-pockets.”

What are some things HRAs will not pay for? (2:41) “Items such as teeth whitening, maternity clothing, childcare for your dependents, and any medications you may receive from other countries.”

Some ways HRAs differ from HSAs. (5:19) “HRAs are totally and only employer-funded, whereas the HSA can be both employer and employee [funded].” Tom goes on to say “The HSA, it is portable, at it is always the employee’s money, so it travels with them, and…with the HRA, it’s not portable, it can be rolled over, but it’s not portable, so the employee never owns the monies. It is always the employer.”

What’s the big news? (8:09) “There are now two new types of HRAs.”

First, the ICHRA (8:45) “There [are] no limits on the size of the employer contribution, or no limits placed on the size of the employer that’s establishing an ICHRA. So the employer gives to each one if its workers cash for coverage, but the coverage must be an individual health insurance plan, its not a group plan.”

Then the EBHRA (14:30) “With an EBHRA, the employer is supplementing you because they’re offering a traditional group medical plan.” Tom expands on that, saying “In a way, what it’s offering to do, is to allow the employees to cover their medical expenses that they are out of pocket and paying for themselves.”

How many workers could these changes affect? (17:51) “It’s 11 million workers [that work for small employers] that may well benefit from either the ICHRA or the EBHRA, and on top of that, there are 9 million part-time employees that work for these larger employers, where they’re not offered any benefits whatsoever, because they are part-timers.”

When would enrollment take place for these new plans? (19:10) “They will have a formal enrollment period that begins on November 1st, this upcoming winter, and concludes on December 15th.

Give the podcast a listen to learn the full scope of these new HRA plans.