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Four reasons why HRAs may work better for schools, cities and counties than HSAs

Schools, Cities and Counties across the country have found Health Reimbursement Arrangements (HRAs) to be a better fit than Health Savings Accounts (HSAs) for their employees. Here are four reasons why an HRA may work better for your organization too.

  1. HRAs can be used for Medical Insurance premiums for Early Retirees.
    Most public sector organizations allow employees to retire prior to the age of 65. Only HRAs can be used for medical insurance premiums prior to age 65. HSAs cannot.
  2. HRAs have no restrictive health plan requirements.
    An HSA must be used in conjunction with an IRS-defined High Deductible Health Plan (HDHP). With an HRA, there are no such requirements so you can use an HRA with any type of deductible.
  3. With HRAs, all employees are eligible to participate.
    An HRA is available to both employees and retirees. HSAs are more restrictive – if an employee is covered by a spouse’s non-qualifying HDHP or non-modified Flexible Spending plan, they are not allowed to participate in an HSA.
  4. HRAs have carry-over flexibility that allows employers to save more.
    The HRA provides you with the flexibility to design your plan so that unused funds at the end of the plan year can return to the employer, be shared between the employer and employee or stay in the employee’s account. The HSA does not allow unused funds to be shared.

For more information, download the whitepaper.

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Erin Woulfe
Erin Woulfe
Erin Woulfe likes to write about things that matter. Keeping her finger on the pulse of what’s happening in the public sector world, she blogs about the latest legislative news and employee benefit trends that affect our school, city and county clients. She’s been with NIS since 2002. “I love connecting to our clients and providing them with the tools they need in order to administrate their plan,” says Erin. “Whether that be materials to educate their employees on certain benefits, how to effectively communicate change within an organization or just providing tips and how-to’s to help them make their job easier.”

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