HRA Application #5: Exchange an HRA for employer portion of retiree insurance premiums

Reducing Medical Insurance costs by reducing the amount of retirees on your plan

Keeping retirees on your Medical Insurance plan can significantly increase your premiums for ALL participants on your plan. The active employee premiums subsidize the expensive retiree costs. Additionally, the administrative burdens of paying retiree premiums can be costly and difficult for public sector organizations.

Negotiating an HRA in lieu of the employer contribution toward retiree insurance premiums will reduce your plan and administrative costs, as well as give your retirees the freedom to choose their own insurance provider.

Should I use an HRA or HSA?

There are significant differences between an HRA and HSA. For a detailed comparison, ask your representative for our "HRA vs HSA" document.

HSA		HRA
Must be used with a High Deductible Plan		Does not require a specific plan design
Cannot be used for insurance premium payments		Can be used for insurance premium payments
Established and controlled by the participant		Established and controlled by the employer on behalf of the participants

What about a VEBA?

The word VEBA is often used interchangeably with the word HRA. However, a VEBA is actually the name of the underlying Employee Benefit Trust that is used to fund the HRA. This underlying Trust can be either a VEBA 501(c)(9) Trust or a 115 Governmental Trust. The VEBA Trust must be used for private corporations and multi-employer plans; whereas, 115 Trusts are used by individual governmental entities. One of the main differences between the two trusts is that the VEBA requires IRS approval and annual reporting which can be costly.

Why NIS' HRA?

Experience

NIS (National Insurance Services) has provided HRA solutions to over 212 public sector organizations, executing more than 447 employer plans in seven states. NIS was the first to implement HRA plans in the state of Wisconsin beginning in 2002.

As a specialist in public sector employee benefits, our solutions contain features that allow flexibility during negotiations that address both the employer’s and the bargaining unit's interests.

Low fees

Administrative fee: $5 per participant per quarter for active employees. This fee can be paid by the employer or the participant. Once participants retire, there is no administration fee. Additionally, retiree-only plans have no administration fee.

Reimbursement fees: $5 per reimbursement, not to exceed $30 per year. Participants may elect to submit one reimbursement for the year in order to reduce fees and maximize the tax-free growth of the account.

NO asset-based fees on the Fixed HRA account balance.

Investment choices

You can choose from a Fixed-Interest or Variable HRA. Call today for the current fixed rate.

Independence from your insurance carrier

No conflict of interest. Your Medical Insurance carrier may have an incentive to keep premiums high.

No trail of accounts left behind. Our HRA works with ANY insurance provider. This gives you the flexibility to change Medical Insurance providers without leaving behind a trail of plan accounts.

Accurate cost/savings assessment. You are better able to evaluate the plan’s costs and savings with our independently administered HRA. Otherwise, a provider may propose an artificially low cost on the HRA plan; yet, inflate other charges.

Vesting

Any vesting schedule can be accommodated.

Portability

Funds are portable when vested.

Complex administration made easy

Our HRA includes a Third Party Administrator that will handle all of the plan administration for you, including implementation, compliance, account statements and reports, daily valuation, transfers, distributions, online and telephone support, as well as periodic meetings with your employees, if requested.

Click icon to download a PDF of our HRA Application #5 brochure

For Employer use only. Not for use with the general public

Securities offered through GWN Securities Inc. 11440 Jog Road, Palm Beach Gardens FL 33418 866.650.0132 Member FINRA, SIPC. National Insurance Services is not affiliated with GWN Securities, Inc.

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