BASE® Blog

The Newer “Kid” on the HRA Block

March 13, 2024 (0)

One of the newest Health Reimbursement Arrangements to hit the block is the Excepted Benefit HRA (EBHRA).  Starting in 2020, this HRA has helped push past the “one-size-fits-all” health benefits package to give employees more options in designing how their health care benefits work for them. 

The Excepted Benefit HRA (EBHRA) is a tax-advantaged Health Reimbursement Arrangement that allows employers to reimburse their employees for their excepted benefits that is offered alongside a group health plan. 

The BASE® EBHRA is a limited dollar HRA that allows employees to pay for their copays, deductibles, prescriptions, dental and vision insurance premiums, COBRA continuation coverage, and short-term limited duration insurance premiums. 

Here are some things to know about the EBHRA: 

Maximum Contribution Rates: 

  • For 2024, the maximum contribution rate is $2,100. 

Requirements: 

  • The employer must offer the group health plan but the employee does not have to participate in it to participate in the EBHRA.
  • The EBRHA must be offered on the same terms and conditions to all eligible employees.
  • The employer cannot offer above the IRS maximum contribution limit.
  • The EBHRA cannot reimburse premiums for individual health coverage.

 How it Works: 

  • Employer will choose to offer the EBHRA and set an amount that falls within the employer’s budget and the legal limits and also designate which expenses are deemed qualified for reimbursement.
  • The employee will enroll in the EBHRA.
  • The employee will incur an EBHRA-eligible expense and submit a claim for reimbursement.
  • The employer will reimburse all valid claims.

 Other Health Benefits Compatibility:  The EBHRA cannot be offered in conjunction with the Individual Coverage HRA (ICHRA) but can be offered to those employees who participate in the employer-sponsored group health plan and/or Health Savings Account (HSA).  

The BASE® EBHRA might be the newer “kid” on the HRA block, but it is another innovative and cost-effective way to provide health benefits to employees that provides more than just savings to both employer and employee.  Contact BASE® at 888.386.9680 or visit www.BASEonline.com.

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