How Does the EBHRA Work?

With the continual rise in health care costs, employers of all sizes, are looking for ways to maximize the business’ tax savings and helping their employees save on their health care expenses.  When it comes to building a health benefits package, there is no one-size-fits-all.  Employees want a simple, flexible way to help pay for qualified health care expenses, without having to always be enrolled in the employer’s traditional group health plan. 

The BASE® Excepted Benefit Health Reimbursement Arrangement (EBHRA) allows employers of all sizes, who offer a group health plan, to reimburse their employees up to an additional $1,800 for premiums paid towards excepted benefits not included in the employer-sponsored group health plan and other qualified out-of-pocket health care expenses.  This HRA is for employees that have been offered the employer-sponsored group health plan, however they are not required to enroll in the plan to participate in the EBHRA. 

How does it work?  Check out the example below!

David is the CEO of an Engineering Firm and has 18 employees, with 15 enrolled in the group health plan.  David wants to find more ways to maximize his business’ tax savings, while also expanding benefit options to help retain and recruit top talent in the engineering industry.  David calls BASE® and enrolls in the EBHRA.  Regardless of the state of enrollment in the group health plan, David offers all 18 of his employees the option to enroll in the EBHRA with the same terms and conditions.  David decides to provide each of his employees with an additional $1,800 to put towards excepted benefits for the year, which amounts to $150 per month. 

The EBHRA is another way for employers to maximize savings and tax benefits with all reimbursements being 100% deductible as a business expense and is a great option for expanding benefits when group health insurance is offered.  The additional money helps employees pay for those excepted benefits such as COBRA, dental, vision, short-term medical plans, and other qualifying out-of-pocket health care expenses with reimbursements as nontaxable income to the employee. 

For more information on the BASE® Excepted Benefit HRA, call 888.386.9690 or visit the

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