Health Reimbursement Arrangement (HRA)
Blue by Design HRA is a plan that lets employees control how
their health care dollars are spent. The plan combines a health
insurance plan with an HRA funded by the employer.
How the Blue by Design HRA works
Consider the example using a Comprehensive Major Medical plan
with a $1,000 deductible, $1,000 coinsurance:
- The employer puts $500 in an HRA. This money can be used
to pay for covered health services such as, hospital care,
office visits, prescription drugs and other eligible services
under the health insurance program. The employee pays no
taxes on the money that goes into the HRA. In addition, the
employee doesn’t pay for any covered health care expenses
until the employee uses all of the money in the HRA.
- After the $500 in the employer-funded HRA is spent, the
employee pays for the next $500 in medical expenses and prescription
drugs until the remainder of the health plan’s $1,000
deductible is met.
- Once the $1,000 deductible is met, the employee pays a
coinsurance percentage for covered medical and prescription
drug expenses up to the health insurance program’s
$1,000 coinsurance maximum. When that $1,000 amount is met,
the plan pays 100 percent of covered services for the remainder
of the benefit period.
Blue by Design HRA offers:
- Tax savings
- Employees gain a greater appreciation for the value of
health care benefits
- Employees have more control over their personal health