BASE^® Blog

Many businesses know that when it comes to their retirement plans, such as 401(k)s, that they must comply with the Employee Retirement Income Security Act and its plan documentation and disclosure requirements, but few understand that the same goes for their health and welfare benefit plans. 

ERISA was designed to protect employees enrolled in the employer-sponsored health benefits and mandates that health plans must be in writing.  The Summary Plan Description and Plan Documents fill in the gaps of other documentation to help comply with federal regulations. 

The BASE® ERISA Wrap is designed to wrap around existing certificates of insurance and benefit plan booklets to provide the required provisions and information and protect the plan and the employer from steep penalties and fines. 

With only a few exceptions, if an employer provides a health and welfare benefit plan to their employees they are required to comply with ERISA, regardless of size, number of employees, or if the benefits are paid by the employer (HRA) or its employees (125 Cafeteria Plans). 

A Plan Document is a written document that contains all the terms of the plan.  It specifies things such as the participant’s rights, the benefits provided, the obligations within the plan, and the plan’s terms and conditions for administration. 

A Summary Plan Description is a written document that details the health benefit plan benefits and features that are easy to read and understand.   

To wrap this up…it is important to note that an SPD is not the same as the Summary of Benefits and Coverage (SBC).  The SBC is required for many health insurance coverage plans but is missing some of the information ERISA requires to be in compliance. 

For more information on the BASE® ERISA Wrap, contact BASE® at 888.386.9680 or visit www.BASEonline.com.

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The EBHRA was signed into law in 2020, but it is still so new to so many business owners.  If a business has a group health plan in place, they can take advantage of the newest HRA, the EBHRA. 

The Excepted Benefit Health Reimbursement Arrangement (EBHRA) integrates with the employer-sponsored group health plan, allowing for employers to contribute up to the annual maximum limit to go towards the reimbursement of an employee’s out-of-pocket health care expenses. 

The BASE® EBHRA is an option for employers, of any size, to help employees pay for their excepted benefits such as copays, deductibles, prescriptions, dental and vision insurance premiums, COBRA, and short-term limited duration insurance premiums. 

3 reasons to offer the Excepted Benefits HRA in the business:

1).  Flexibility and Benefits for Both Employers and Employees.

With the EBHRA, the employees can participate in the EBHRA regardless of their enrollment in the employer-sponsored group health plan.  This provides additional freedom for employees to choose regarding their health insurance and can choose the combination of options that work best for them.

With the EBHRA, the employer gets to determine what expenses can be reimbursed under the EBHRA and what the reimbursement limit is, up to the maximum limit per year.   

2).  Potential Savings for Both Employers and Employees.

An EBHRA can offer businesses a way to predict anticipated costs that align with the employer’s budget, while still offering the employees additional benefits.  So many employees will experience unforeseen health care expenses, having the EBHRA in place is a game-changing benefits solution to help pay for those costs. 

All reimbursements made through the EBHRA are 100% deductible as a business expense to the employer.  With reimbursements tax deductible, and money not used by employees during the plan year to be returned to the employer, there are big savings that can help make the most out of the company’s budget. 

3).  There is Nothing Like it.

That the EBHRA can do is limitless.  Employers of any size can offer the EBHRA and can be combined with more group health insurance plans. 

The EBHRA provides an option when it comes to pay for out-of-pocket health care costs, must be offered on the same terms and conditions to all eligible employees, and can be used to reimburse individual coverage, group health coverage, Medicare parts A, B, C, and D, and more. 

For more information on the BASE® Excepted Benefit HRA, contact BASE® at 888.386.9680 or visit www.BASEonline.com.

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