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HRA Options Are Endless

With BASE®, businesses have multiple options to choose from in helping save valuable tax dollars with the help of Health Reimbursement Arrangements. A Health Reimbursement Arrangement (HRA) is a tool for business owners to increase their tax savings and to offer tax-free health benefits. An HRA may reimburse for qualified medical expenses such as co-pays, deductibles, and health insurance premiums.

What are the options?

BASE® Section 105 HRA – Available to small business owners to deduct up-to 100% of health care costs, including individual insurance premiums and qualified out-of-pocket medical expenses as a business deduction. The typical BASE® HRA client saves an average of over $5,000 in tax savings.

ADVANTAGE: Businesses will reduce the financial impact of health care expenses and pay for eligible out-of-pocket health care expenses with tax-free reimbursements to the employee.

BASE® QSE HRA – Available to business owners with less than 50 full-time employees and no traditional group health plan, giving them the option to offer their employees a better benefits package. With the QSE HRA, employees have the ability to secure their own medical insurance and use the funds to pay for insurance premiums, co-pays, deductibles, eye care, dental care, or other qualified health care expenses.

ADVANTAGE: Businesses will attract and retain talented employees with an increased benefits package, with employees having additional money to help with the rise in cost of health care.

BASE® Integrated HRA – Available for employers with a group health plan in place looking to reduce the overall cost of insurance coverage. The Integrated HRA gives employers the flexibility to help their employees pay for medical expenses not covered by health insurance.

ADVANTAGE: Businesses have more control of the overall cost of their benefit plans, and employees do not contribute funds to the HRA.

Plus, two NEW HRAs for 2020…

BASE® ICHRA – Available to businesses of all sizes that are looking for different options outside of standard group health insurance. The ICHRA will integrate with individual health insurance to provide business owners with a great alternative in providing health benefits. This plan helps to streamline benefit options and cut costs without reducing value when it comes to employee health benefits.

ADVANTAGE: Businesses will save money by not having to provide a traditional health care plan to any or all employees, and employees now have additional money to help with the continuous rise in health care and are able to pick the insurance coverage that is right for them.

BASE® EBHRA – Available to employers that offer a traditional group health plan to provide an additional $1,800 pre-tax to reimburse employees for dental and vision, COBRA, and short-term insurance premiums.

ADVANTAGE: Employers have the ability to expand their benefits package, and employees have an additional $1,800 pre-tax to put towards their medical expenses. Health Reimbursement Arrangements offer a variety of plan design options to meet the needs of business owners of varying sizes.

Call BASE® at 1-888-386-9680 for a consultation regarding HRAs or visit BASEonline.com to learn more.

The 5 W’s of the ERISA Wrap

Under the Federal Employee Retirement Income Security Act (ERISA), an employer that provides certain benefits to their employees is considered to have established an “employee welfare benefit plan,” whether it is medical insurance or other types of benefit plans. When an employer provides a welfare benefit plan it is required that the employer comply with ERISA, but what does that mean?

 

The BASE® ERISA Wrap is designed to help employers fulfill the ERISA requirements for an SPD and Plan Document. These documents “wrap” around the insurance policy and together comprise of the complete Plan Document. These documents specify things such as eligibility requirements, plan participation rules, and the length of coverage.

 

WHO is required to have an ERISA Wrap?

An employer of any size, with any number of employees, and an “employee welfare benefit plan” must comply with ERISA.

 

WHAT does an ERISA Wrap do?

The ERISA Wrap will “wrap” around existing certificates of insurance and benefit plan booklets to provide the required provisions and information necessary to comply with ERISA. An ERISA Wrap helps to provide more detailed information about the benefits being offered and are designed to supplement the existing insurance carrier certificates with all required ERISA language. These documents provide additional legal protection for the employer and plan fiduciaries and help to simplify plan administration.

 

WHEN is an employer-provided benefit considered an “employee welfare benefit plan” under ERISA?

As an employer, if they provide a medical, dental, and vision insurance plan, or a health reimbursement arrangement (among other things), the benefit is now considered an employee welfare benefit plan that needs to comply with ERISA.

 

WHERE can an audit happen?

An ERISA audit can happen anytime, anywhere. The US Department of Labor (DOL) plans to conduct more ERISA compliance audits which can be at random or when a complaint has been made. According to HR Service Inc., the DOL estimates three out of four plans they audit have an ERISA violation, and about 70% of audits with violations have resulted in monetary fines to the employer.

 

WHY does a business need a wrap document?

Insurance documents rarely meet all of the specific requirements of ERISA for Plan Documents and SPDs. A business could face a penalty of up to $110 per day per employee that may be assessed where an employer fails to provide the proper plan documents to an employee. Having an inaccurate or incomplete plan document can increase the risk of participant complaints and lawsuits.

 

…and HOW does it work?

With BASE®, the employer provides the plan information for all ERISA employee benefit plans. BASE® will produce all required documentation as established by ERISA in the form of an SPD and Plan Document, and provide and maintain all documentation to the employer required for distribution to their employees.

 

The DOL recommends a third-party to help review a company’s compliance materials, and with the increased DOL audits, rest easy knowing BASE® can help keep the business in compliance. Call 1-888-386-9680.