Tip 207- HDHP+HSA+HRA

Here’s a health plan design straight from acronym heaven.
Let’s start with a “qualified” HDHP (High Deductible Health Plan).

A “qualified” plan is one that meets IRS guidelines for establishing an HSA (Health Savings Account). For 2015, that means it must have at least a $1,300 deductible ($2,600 for two or more) but total out of pocket limits of no more than $6,450 ($12,900 for two).

We just compared the cost of two plans for a client with 15 employees. The premiums for a $4,500 HDHP are 30% less than a $2,500 HDHP; in this case, a savings of over $34,000.

We recommended they buy the less expensive plan and use a “post deductible HRA” (Health Reimbursement Arrangement) to back-fill some or all of the gap between $2,500 and $4,500.

Since reimbursements can be expected to average only about 20% of the premium savings, the employer might consider partially funding the HSA’s.

And finally, lower premiums also free up funds for employees to contribute to their HSA’s. Sounds complicated, but that’s where a good agent can help.
I know a couple!