BASE^® Blog

With the escalating cost of health care, employers are exploring different ways to manage those costs in providing health care benefits whether they are self-employed or a business owner with multiple employees.   Instead of cutting costs elsewhere, implementing a BASE® Health Reimbursement Arrangement (HRA) could save business owners thousands a year in tax savings.  BASE® offers a complete line of benefits that offer money saving and compliance solutions for businesses of all sizes.

A Health Reimbursement Arrangement is an IRS-approved, employer-funded, tax-advantaged employer health benefit plan that reimburses employees for their out-of-pocket medical expenses.  By implementing an HRA into a business, it will help cut costs and make health care affordable, while giving the employees more freedom in their personal health care decisions.  An HRA not only saves the employee money, but the employer as well!

BASE® offers 3 types of HRAs to help businesses save money:  Section 105 HRA, Integrated HRA, and QSE HRA.

BASE® Section 105 HRA

• 1 employee participant
• On average, $4,700 in tax savings
• Reduces the financial impact of health care expenses

BASE® Integrated HRA

• Any number of employees
• Available for employers with a group health insurance plan looking to reduce the overall costs of insurance coverage
• Coupled with group health insurance plan, employees pay for medical expenses not covered by the health insurance

BASE® QSE HRA

• 2-49 employees
• Helps employers offer a more attractive benefits package when group health insurance is no longer an option
• Employees have the ability to secure their own medical insurance and pay for insurance premiums, copays, deductibles, eye and dental care, and other qualified health care expenses

These plans are made to benefit different types of business structures, but share the same end-goal – to save the employers and their employees money.  It allows employers to deduct up-to 100% of the reimbursements as a business expense and keep the plan in full compliance with all current laws and insurance regulations with the necessary plan documents.  HRAs give employers more control of the overall cost of their benefits plan, and help to reduce the financial impact for employees when paying for out-of-pocket medical expenses.

Every cent a business and employee spends, COUNTS.  Whether self-employed, a company with a group health plan or a business without insurance, BASE® can help implement a custom HRA plan to help save on health care costs.

For more in-depth information about each type of HRA, please call BASE® at 1-888-386-9680 or visit www.BASEonline.com.

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H.R. 6199 – “Restoring Access to Medication and Modernizing Health Savings Accounts Act of 2018.” 

H.R. 6311 – “Increasing Access to Lower Premium Plans and Expanding Health Savings Accounts Act of 2018.”

On Wednesday, July 25, 2018, Health Care bills, H.R. 6199 and H.R. 6311, were adopted by the House of Representatives.  These bills could expand tax-advantaged health care accounts, including Health Reimbursement Arrangements (HRAs) and Flexible Spending Accounts (FSAs).

Each bill is designed to do something different, but they have one common goal - to enhance and protect health care for all working individuals and families and strengthen the Affordable Care Act (ACA), making sure it stays true to its original promise of lowering health care costs.  These laws would not be considered a repeal of the ACA, but a correction to a few provisions in the ACA.   

In 2003, consumers were able to use their HRA and FSA to store up to help pay for their medical expenses.  At any time throughout the year, you could purchase a bottle of Tylenol, pay for a doctor visit, and pick up a prescription from the pharmacy with your pre-tax dollars.  However, in 2011 a provision in the ACA restricted the use of pre-taxed dollars for over-the-counter (OTC) products.  In order to use the tax-advantaged health care accounts, consumers had to have a prescription in order to be reimbursed.  This created a barrier for employees from buying medication for their seasonal allergies, taking medicine such as Tylenol for their pain management, etc.  (Allow HSA dollars to be used for over-the-counter drugs).

With the passing of these Health Care bills, OTC medications will be eligible to be purchased and sports/fitness expenses will be treated as qualified medical expenses for tax-advantaged health care accounts.  The way an individual or family can contribute will change, as well as, including being able to contribute to an HSA if their spouse has an FSA.  There will also be the option to carry over FSA balances to the following year up to three times the annual limit.

For more in-depth information on the two Health Care bills, please click here.  As these bills make their way around Congress, BASE® will continue to keep you updated! 

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