| A Health Reimbursement Arrangement is designed to help an
Employer save money. An employer can
set up this plan to reimburse employees
for eligible medical expenses. It is
commonly used with a High Deductible
Health Plan (HDHP) where the premium is
lower and thus saving the employer
money. After setting up a HDHP the
employer can pay only the difference
between the the premium from the previous
plan and the amount that exceeds what the
employee was already paying. Note
that the employee will continue to pay the
same amount of premium and deductible as
before. With the savings from the
HDHP the employer can fund an account to
reimburse the employees for the difference
between the deductibles. The
employer will still save money because he
can allocate money only when needed and
not all employees will need to be
reimbursed.
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