FAQs - Health Reimbursement Arrangements (HRA)

WHAT HAPPENS IF I PARTICIPATE IN A HRA AND A FSA PLAN?

IMPORTANT

WHAT IS A HEALTH REIMBURSEMENT ARRANGEMENT(HRA)?

A great way to help you pay for qualified medical expenses with tax free money from your employer. A Health Reimbursement Arrangement (HRA) is a self insured health plan that is made up of only employer contributions.

All you need to do is satisfy the eligibility rules under the plan.  It is common that eligibility may be linked to participation in your employer-sponsored health plan.

HOW DO I SAVE MONEY ON THE COST OF MY MEDICAL BILLS?

Any reimbursements that you get from the plan are tax free.

HOW MUCH MONEY WILL BE AVAILABLE TO ME IF I QUALIFY TO PARTICIPATE?

Each plan will define how much is available each plan year in your Summary Plan Description (SPD).  Your account may be available up front or periodically throughout the plan year at the employer's discretion.  The funding arrangement will also be defined in the SPD.

WHAT CAN I USE MY HRA MONEY FOR?

Typically you can use your HRA money for qualified medical expenses for you, your spouse and your dependent children.  The types of expenses and any restrictions will be defined in your SPD.

DOES THE PLAN COVER MY FAMILY?

The plan generally covers you, your spouse, and your dependent children (as defined in the plan).

WHAT HAPPENS IF I DON'T USE ALL MY FUNDS BY THE END OF THE PLAN YEAR?

Most HRAs are set up to forfeit any remaining balances at the end of the plan year.  It is possible by design to allow carryover of unused funds from one plan year to the next by plan design.  Please refer to your SPD for specifics about your plan.

IF I PARTICIPATE IN THIS PLAN, CAN I STILL RECEIVE TAX CREDITS AND ITEMIZE MEDICAL DEDUCTIONS ON MY TAX RETURN?

By participating in the HRA you are already receiving the tax savings on the expenses on your paycheck and cannot claim them again as an itemized deduction on your tax return. Beginning with the tax year 2013, In order to itemize your medical expenses have to be a minimum of 10% of your gross earnings. Most people are unable to itemize unless they experience a catastrophic expense.

HOW WILL MY PARTICIPATION IN THIS PLAN AFFECT MY TAXES AT THE END OF THE YEAR? WILL I HAVE TO DO ANYTHING DIFFERENTLY WHEN FILING MY TAX RETURN?

The amount of taxable wages reported on your W-2 will be automatically reduced by the amounts you elected to pre-tax under the plan. You simply use the amount shown on the W-2 as taxable income and complete your return as you always have done.

IF I PARTICIPATE IN A HRA, HOW DO I GET REIMBURSED?

HRA Made Simple

1. Complete a HRA Claim Form.

2. Attach the appropriate required claims substantiation. Examples: Explanation of Benefits (EOB), Billing Statements, Cash Register Receipts, Pharmacy Printouts, Co-pays Receipts, etc. NOTE: Cancelled checks, balance due statements or received on account statements are NOT a valid proof of expense. Per IRS regulations, claims substantiation must be from a third party and must include enough information to verify when the service was performed, who the service was for and whether or not the service was for an IRS approved expense. Claims Processing will occur faster if your substantiation includes:

a. Date the Service happened. (Not necessarily the payment date.)

b. Description of the Service. (i.e. Office visit, Surgery, RX name, etc.)

c. Name of the Medication. (The name of the medication will be required for Rx expenses over $50 so that we can verify whether or not the RX is for cosmetic or general health reasons. Any claims that are not clear will be returned for further information.)

d. Provider Name. (Name of professional or institution providing the service.)

e. Name of the Patient the expense is for. (List “self” if for yourself and list family member name if for dependents.)

f. Dollar amount you are requesting. (Amount that is your responsibility and will not be covered by another source.)

3. REQUIRED: Sign the HRA Claim Form.

4. Submit your Claim for Processing Forward by mail to:

Benefits Design Group, Inc.

PO Box 370

Or By Fax: (608) 781-4576 Or contact our office at 1-800-554-7213 to find out how you can send your claims by e-mail securely. Remember: Claims will be delayed if you don’t submit enough detail to substantiate your request or if your claim form is not signed. A letter will be sent to you explaining the detail needed to further process your request.

HOW SOON CAN I EXPECT TO RECEIVE MY REIMBURSEMENT CHECK?

Claim forms are processed on a daily basis. Reimbursement checks are generated according to the schedule as contracted with your employer. Many are on a monthly schedule.  Claims that miss the payment deadline are processed but will be held pending until the next process.  The checks are always issued to you, and cannot be issued to your providers directly. The reimbursement check stub provides a breakdown of your current account activity, including the amounts paid, the service date, claims pending, and the remaining account balance. A replacement HRA Claim Form can be obtained by clicking here HRA Claim Form or on our website under Forms & Instructions at: www.bdgflex.com. HRA participants also receive periodic account statements, which summarize year-to-date activity.

WHAT HAPPENS IF I PARTICIPATE IN A HRA AND A FSA PLAN?

HRA/FSA Made Simple

If we are the administrator for both the HRA and the FSA plan, and the HRA is ordered to pay first, you will use this specially desiged claim form (click here) HRA/FSA Claim Form  . By using this form, once your claim has been applied to the HRA schedule of benefits, you can request that we automatically reprocess any eligible portion of the claim in the FSA plan by checking the appropriate box in the upper right hand corner.