Flexible Benefit Service Corporation (Flex) offers debit cards as a reimbursement
option with several different Health Reimbursement Arrangement (HRA) plan designs.
Why offer an HRA?
HRAs are employer-funded plans that reimburse employees for out-of-pocket medical
expenses. HRA reimbursements are tax-free to the employer and employee. Employers can write-off
reimbursements and expenses associated with administering an HRA. Employees don’t have to pay income taxes
on reimbursements either. Both parties also avoid Medicare and Social Security taxes on
reimbursements.
HRAs are often linked to a major medical plan allowing for reimbursement of
deductibles, coinsurance and/or copay expenses. Many employers are transitioning to higher deductible health
plans, and they are using HRAs as part of their transition strategy. The HRA helps offset or reduce expenses
of employees who typically have high medical costs, and it provides a peace of mind to other employees who
may be worried about an unexpected medical event.
On average, utilization of an HRA is between 25 – 35% of the maximum reimbursement
available to the employee.*
This, in combination with premium savings associated with a high deductible health plan, can lead to total
savings of up to 20% for the employer.**
Why offer a debit card with an HRA?
HRAs, by name, are a type of reimbursement program. The old-fashioned way of
administering an HRA required an employee to pay for an out-of-pocket expense with their own money. The
employee would then request reimbursement by submitting proof that the expense was incurred.
Debit cards change the dynamic of the reimbursement process by providing
on-the-spot access to available HRA reimbursement funds. For example, if an employee had to pay a $50 copay
for an office visit, they could use the debit card associated with their HRA to make payment for the office
visit right then and there.
The employee may still need to provide documentation showing the debit card was
used for a qualified expense, but they don’t need to pay for the expense out of their own pocket and request
reimbursement later. This creates a far better experience for the employee. We can even setup
auto-substantiation rules to minimize the need to submit documentation in many cases.
Why use Flex as your HRA administrator?
Flex has been administering medical reimbursement programs since 1988. It’s part of
our DNA. We eat, sleep and breathe these programs, and we have some of the best and brightest employees who
support our HRA clients. Our HRA administrative fees are nominal compared to the savings that are received,
and there’s no extra charge for debit cards. We’ll even provide free debit cards to spouses and adult
children who are covered by the HRA.
Flex will work with the insurance producer, employer, or both, to make sure the
implementation process is smooth. We’ll provide a number of resources and tools as part of our commitment to
provide ongoing support and a great experience. Employees will be able to access account information online
or through a mobile app. Employers will have an online portal to view account activity and run an array of
reports, and a friendly voice will be on the other line whenever there are questions.
Have a question about HRAs? Ask
the Expert!
Interested in an HRA from Flex? Request a proposal.
* Actual utilization will vary by employer and the chosen HRA plan design.
** Total savings will vary by employer based on their unique benefits package.
