Governmental organizations are moving towards High Deductible Health Plans (HDHPs) to help cut the cost of health care. According to National Insurance Service (NIS), they have found that Health Reimbursement Arrangements (HRAs), in conjunction with a HDHP, are a better fit regardless of plan design or insurance carrier.
The BASE® Integrated Health Reimbursement Arrangement is an employer-funded plan that reimburses employees for qualified out-of-pocket medical expenses. By coupling a group health insurance plan with the Integrated HRA, employers claim a tax deduction for the reimbursements made through this plan, and the reimbursement dollars received by employees are tax-free.
5 reasons the BASE® Integrated HRA may work better for school districts, counties, cities, & other local governmental employers:
- No Restrictive Plan Design Requirements.The employer is free to customize a plan that works for the business - any plan, no matter the deductible, can be used with no contribution limits.
- All Employees are Eligible to Participate.Current employees, including retirees, can participate.
- Rollover allows employers to save more and have more options. An employer can design the HRA so that the employee shares in a portion of the unused funds.
- Eligible Reimbursements.The HRA can be used tax-free to reimburse eligible health care expenses such as deductibles, co-pays, prescription drugs, eyeglasses, dental, and other qualified expenses.
- No Conflict of Interest.HRAs are not tied to any insurance carrier which gives an employer more flexibility when changing carriers.
Not only does the HRA do the above, but the plan criteria reflects what has been agreed to between the employer and employee giving local plan control, and gives employees an increased sense of responsibility for their health care choices and helps bend the curve of the health care costs.
Take a look at school districts for instance. School districts looking to save money and provide their employees with a competitive benefits plan are finding just that by implementing an HRA. Two examples below:
- A school district saved $690,000 in an eleventh-hour insurance switch to a plan with an HRA and a higher deductible to get lower health insurance premiums.
- A school district on the west coast switched insurance in favor of a new high deductible plan and an HRA, helping them to save $275,000.
BASE® has worked with many school districts to provide valuable savings for tight budgets. Michella Drummond, BASE® Sales Representative, worked with an Iowa school district to help them save thousands of valuable tax dollars. The school used the HRA to buy down on their group health plan and saved thousands by picking the higher deductible plan that kept their employees deductible low.
Casandra Mueller, a BASE® Sales Representative, said, "School districts can save a lot of premium dollars by raising the deductible on their health plan, and then reimburse the difference in deductibles from their previous plan to their new deductible, saving the school district thousands of dollars by being smart with their benefit dollars and only reimbursing the back half of a deductible if an employee needs it."
What the BASE® Sales Representatives want school districts to know is that:
- All employees have out-of-pocket (OOP) expenses
- School districts are on tight budgets
- Districts want to provide their employees with a great benefits package
- BASE® is here to help
School districts have a set budget, but with the money saved from implementing an HRA, this could mean more opportunities for the school to put savings towards departments that need it the most.
BASE® provides cost-effective benefit options that could save a local governmental organization, such as school districts, $30,000-70,000 a year. If you work with school districts in your area, be sure to reach out to BASE® at 1-888-386-9680 for a savings analysis.