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by Tony Novak, CPA, MBA, MT September 23, 2013
Health Reimbursement Arrangements (HRAs) have emerged as the best way for a small business or nonprofit to reduce the cost of providing health benefits to employees in the post-health-care-reform era. When the federally subsidized health insurance exchanges open by the start of 2014 these HRAs will gain even more momentum. The concept is simple: each employee uses the health care and resources that best suit their own unique situation and the employer helps pay the expense of those care costs on terms that are controlled by the employer. The employer typically decides how much to contribute and allows the employee to access the health insurance exchange to find the best coverage and supplemental benefits.
For most small businesses, the challenge is how to most efficiently set up the HRA plan with the exact features they want at a cost they can afford. Cost ranges from as little as $150 per year up to several thousand dollars. This short article lists some of the best practices and those to avoid when setting up a HRA.
Freedom Benefits offers small business HRA setup for a flat fee of $150 that includes help with the design, forms and payroll integration. Most plans can be started within 2 business days of the request.
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Opinions expressed are the sole responsibility of the author and do not necessarily represent the opinion of Freedom Benefits Association or any other person, company or entity mentioned. Tony Novak operating under the trademarks "Freedom Benefits", "OnlineAdviser" and "OnlineNavigator" is not an agent, broker, producer or navigator for any federal, state or commercial health insurance exchange but may be compensated as an accountant, adviser, consultant, reviewer, endorser or referrer to any firm or product named. Information is from sources believed to be true but cannot be guaranteed.