Reducing Health Care Costs with the Integrated HRA

Businesses of all sizes continue to feel the pressure of the rise in health care costs.  For many, a traditional group health insurance plan may become too expensive to offer their employees.  Health Reimbursement Arrangements are one of the best options in offsetting the rising cost of health care and providing employees with a tax-advantaged benefits plan they deserve.  The employer has complete control over the health benefits budget, and employees are free to make the purchases that fit their health care needs.  More and more businesses are turning to Health Reimbursement Arrangements to keep costs down and in hiring and keeping talented employees.

Integrated with a company’s group health plan, the BASE® Integrated HRA can help combat the rising cost of providing health care.  It is offered alongside an employer-sponsored group health plan (usually a high-deductible plan) as it is a supplement to help employees with their deductible costs, and is a great option for employers who are looking to lower the cost of health insurance premiums and save money while keeping the employee’s coverage the same.  Employers can help their employees by reimbursing their out-of-pocket medical expenses not paid for by the group health plan.  Because of employee utilization of the HRA, the employer can save 10-50%, depending on the plan design.

Randy M. is an insurance agent, and a great example of a Business Partner who has had success using BASE® with many clients.  While not all clients are ready to believe that a third party administrator is able to reduce their health insurance expenses, Randy has introduced them to BASE® to discuss utilization history and higher deductible plan options.  He has found great success in recommending a higher deductible plan in conjunction with a BASE® Integrated HRA, which has saved clients substantial premium dollars.  “BASE® has allowed them to keep an attractive benefit plan while keeping their overall expenses reasonably the same,” said Randy.

Not only do Integrated HRAs contain health care costs for both the employer and employee, it helps keep employees healthier and better educated.  According to a study by Employer Benefit Research Institute (EBRI), participants in both Consumer Driven Health Plans (CDHP) and traditional health insurance plans consistently report participants to have a better health status and on average have a lesser likelihood for smoking habits, obesity, and lack of exercise.  Participants had consistently reported better health status, exhibited better health behavior, and understood the true cost of health care and how to spend their money wisely, than traditional plan enrollees without the CDHP in place.

The Integrated HRA helps to contain premium increases, which has only increased their popularity over the years.  It helps employers and employees save money, stay educated on their health care decisions, and, on average, help to lead healthier lives.  For more information, call BASE® at 1-888-386-9680 or check out our website

Save Thousands During Tax Season

Another tax season has come and gone.  BASE® clients saved an average of $5,000 in tax savings with the BASE® Section 105 HRA.  While many business owners missed out on this savings on health care spending.

An HRA allows self-employed business owners to deduct up-to 100% of their health costs as a business expense.  This could include insurance premiums for health, long-term care, vision, dental, as well as out-of-pocket medical expenses.

The BASE® Section 105 Health Reimbursement Arrangement allows small businesses, classified as sole proprietors, partnerships, or C or S Corporations, to reimburse their employees for qualified medical expenses, tax-free.  This plan is applicable to small business owners that can legitimately hire their spouse.

Mandy S., a BASE® HRA client since 2008 knows how beneficial having an HRA in a business is.  “The BASE® HRA is a simple way to receive tax savings. It is especially reassuring at tax season to know I am being proactive to minimize our tax exposure without too much trouble. It’s really not hard to keep track of medical expenses with the BASE® website, which is quick and easy-to-use. When I call with a question I always get professional, friendly, and constructive assistance.  The annual savings always exceeds the effort involved!”

Without this plan in place, small businesses only take the standard personal deduction for health insurance costs when filing taxes.  Business owners can deduct only a portion of their health care expenses, which is often less than half of the typical family’s expenditures.  However, if the business has an HRA in place, they have the ability to take these expenses as a business deduction, which offers savings on self-employment tax in addition to income tax.

The BASE® HRA gives businesses a simple, effective solution to deal with the cost of health care and save thousands of dollars in tax savings each year.  For more information on the BASE® Section 105 Health Reimbursement Arrangement, call 1.888.386.9680.