Complete Health Reimbursement Arrangement (HRA) Glossary

A

ACA Compliant - refers to a major medical health insurance policy that conforms to the regulations set forth in the Affordable Care Act (Obamacare).

Anniversary Date - The 1st day of a company's plan year

B

Balance - The amount of Health Reimbursement Arrangement funds left available for an employee to use on eligible medical expense. 

Benefits - Reimbursement paid to an employee for eligible medical expenses incurred during the coverage period. 

C

CAP - The maximum amount of claims that can be paid during a length of time. This is determined by the employer. 

Claim (HRA) - An HRA claim is an employee's formal request to be reimbursed for premiums and medical expenses

Claims processor - The individual, third party, or other entity designated by the Plan Administrator to receive, substantiate and recommend whether a claim should be approved for reimbursement or rejected by the Plan Administrator in accordance with the Plan Documents.

Classes  - A group of one or more employees that are similar with respect to job title, geography, hire date, part-time or full-time status, collective bargaining status or other objective business criteria. There are 11 different types of employee classes for an Individual Coverage Health Reimbursement Arrangement.

COBRA - COBRA stands for Consolidated Omnibus Budget Reconciliation Act. It's a federal law that was created in 1985 that gives individuals who experience a job loss or other qualifying event the option to continue their current health insurance coverage for a limited amount of time. Employers outside the federal government with more than 20 employees are required to offer COBRA coverage to those who qualify.

Coinsurance - Generally your employee's health insurance pays a higher and you lower percentage of your claims.

D

Deductible - The amount you pay before your health insurance will pay claims

Defined Contribution Program – a consumer-driven health care arrangement in which employers choose a set dollar amount of contribution towards an employee’s healthcare.

Dental/Vision Health Reimbursement Arrangement - Designed exclusively for employers who want to reimburse for Dental and Vision expenses. Can roll over year to year.

Dependent - Any individual who qualifies as an IRS Section 152 tax dependent. Generally a child or spouse.

E

Effective Date - the date which the plan or HRA starts

Employee Class - A group of one or more employees that are similar with respect to job title, geography, hire date, part-time or full-time status, collective bargaining status or other objective business criteria. 

Excepted Benefit Health Reimbursement Arrangement (EBHRA) - Must be offered in conjunction with a traditional group health insurance plan, although employees are not required to be enrolled in the group health insurance to participate in the EBHRA. 

F

Flexible Spending Arrangement (FSA) - FSAs allow employees to make contributions toward health care and dependent care expenses on a pretax basis.

Full Flex Plans - With Full Flex Plans, employers make contributions for all plan-eligible employees, and employees use those contributions to buy various benefits. Employees can then make pre-tax contributions towards any benefit that the employer contributions do not fully cover.

Fully Insured - is a traditional way to structure an employer-sponsored health plan

G

Group Coverage Health Reimbursement Arrangement (GCHRA) - Also referred to as an Integrated HRA. Must be offered in conjunction with a traditional group health insurance plan – usually a high-deductible plan. It reimburses for employees tax-free to help cover their deductibles, co-insurance amounts, and other approved medical expenses. Can roll over year to year.

H

Health Reimbursement Arrangement - Allows employers to make a tax-free contribution of for individual health insurance and for other qualified medical expenses.

HRA - an abbreviation for Health Reimbursement Arrangement. it allows employers to make a tax-free contribution of for individual health insurance and for other qualified medical expenses.

I

Individual Coverage Health Reimbursement Arrangement -  Allows employers of any size to make a tax-free contribution of any size for individual health insurance and for other qualified medical expenses. ICHRA’s satisfy the ACA employer mandate for ACA compliance if set up correctly.

ICHRA -  an abbreviation for Individual Coverage Health Reimbursement Arrangement. This HRA allows employers of any size to make a tax-free contribution of any size for individual health insurance and for other qualified medical expenses. ICHRA’s satisfy the ACA employer mandate for ACA compliance if set up correctly.

M

MEC - Minimum Essential Coverage is any insurance plan that meets the Affordable Care Act requirement for having health coverage.

P

Plan administrator -The Company, who has full authority, discretion, and responsibility to manage and direct the operation and administration of the Plan, or the third party, entity, or person whom the Company designates to direct one or more elements of such operation and administration.

Q

Qualified Small Employer Health Reimbursement Arrangement  - Allows small employers under 50 employees to reimburse tax-free for individual health insurance and also for coverage under a spouse’s group health insurance plan, short-term medical plans, and sharing ministry plans. 

QSEHRA  - An abbreviation for Qualified Small Employer Health Reimbursement Arrangement. It allows small employers under 50 employees to reimburse tax-free for individual health insurance and also for coverage under a spouse’s group health insurance plan, short-term medical plans and sharing ministry plans. 

R

Retiree HRA - Designed to help retired employees pay for plan-eligible medical expenses during retirement. Retirement expenses can include COBRA premiums, and premiums for Medicare Part A, B, and D, and a Medicare Advantage Plan or Medicare Supplement plan.

S

Section 125 Plan - A Section 125 Plan, also known as a Cafeteria Plan, is a written plan that allows employees to receive part of their compensation as an employee benefit, paid for with pretax dollars.

SPD - A Summary Plan Description describing the terms or the Plan

Spouse - An individual who is legally married to an employee as determined under applicable state law. 

W

Waiting Period - A period of time as determined by the employer an employee must wait to become eligible for the companies health benefits. This duration must not exceed 90 days.