Health Reimbursement Account (HRA) for 2006
The university has established a Health Reimbursement Account (HRA) program for calendar year 2006 in an effort to assist employees with the transition from the previous plan to the plans being implemented Jan. 1, 2006. By regulation, an HRA is funded with contributions from the employer; there are no employee contributions permitted in this type of account. The funds in an HRA are available to the employee on a tax-free basis when they are used to pay for qualifying health care expenses which are not covered by the health plan. These funds do not have to be spent in calendar year 2006. If an employee has no qualifying expenses in 2006, the account balance can be rolled over from year to year until the account balance is depleted.
Submitting Claims: When you have an eligible bill (for example, a bill for an eye exam and contact lenses in excess of what is covered by your vision plan), you are able to access the funds in your account, which is administered by WageWorks, in three different ways:
- Use the WageWorks debit card to pay for the services.
- Pay for the expenses out-of-pocket and then submit a claim form with proof of payment to WageWorks to receive reimbursement.
- Use the on-line bill payment system available at: http://www.wageworks.com.
The university will fund an HRA for each employee who was enrolled in a health plan as of the end of calendar year 2005. Employees who elected to "opt-out" for 2005, or who elect to "opt-out" for 2006, will not receive an HRA account. The amount of the university’s contribution is determined by the plan the employee was enrolled in during 2005. The schedule is as follows:
Plan Option | Coverage | Median Salary $40,800 or below | Above Median Salary $40,800 |
Basic POS | Single | $550 | $275 |
Family | $1,100 | $550 | |
High POS | Single | $350 | $175 |
Family | $700 | $350 | |
PPO | Single | $150 | $100 |
Family | $300 | $200 |
The funds in the HRA account will be available to the employee immediately on Jan. 1, 2006, and will be used to pay for any qualifying expense, including deductibles, office co-pays or prescription drug co-insurance. In addition, like Flexible Spending Accounts, the HRA funds can be used for qualifying medical expenses not covered by the health, dental or vision plans. This account will give employees some financial support as we transition to the new plan options and will give employees the most flexibility in deciding how the funds should be used. If an employee elects to also participate in a Health Care Flexible Spending Account, HRA funds will be used first.
Here is an example of how the Health Reimbursement Account (HRA) works:
An employee has an HRA account with an opening balance of $550. This employee experiences out-of-pocket costs for medical services in 2006 as indicated below.
| With HRA | Without HRA |
Deductible | $250 | $250 |
Office co-pays | $75 | $75 |
Prescription co-insurance | $150 | $150 |
Total out-of-pocket expenses for year | $475 | $475 |
Submitted to HRA | $475 | 0 |
Employee out-of-pocket cost | 0 | $475 |
HRA balance at end of year | $75 | 0 |