Health reimbursement arrangements (HRAs) represent an opportunity for employers to provide employees with a health insurance benefit. Instead of choosing a one-size-fits-all group plan or leaving employees to shoulder the financial burden of health insurance on their own, employers can offer employees a tax-free allowance to purchase a plan of their choice.
In a tight labor market, employers look for any advantage in attracting and retaining good employees. Many small employers have never been able to afford to offer health insurance. Although HRAs have been around for a while, some recent changes make them even more accessible for small employers. The problem is many businesses either don’t know about HRAs or think it won’t work for them. Here are four common misconceptions about HRAs — and the real story behind each.
