| Horizon MyWay HRA |
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Horizon MyWay HRA combines a high-deductible health plan with a Health Reimbursement Arrangement (HRA). This product strikes a balance between coverage, cost, and increasing demands for freedom of choice.
HRAs are employer-funded accounts, which means that the employer makes payments into each HRA fund. Employees can then use their HRAs for all qualified medical expenses, including deductibles. Once an employee depletes her/his HRA, there may be a gap or bridge amount that must be paid before the deductible is met. However, once the deductible is met, regular coverage kicks in.
Money in an employee's HRA at the end of the year may be carried over to the following year if the employer elects to offer that option. Otherwise, unused funds are returned to the employer.
HRAs are employer friendly and involve fewer rules and regulations than do other Consumer-Directed Health (CDH) plans. Employers that provide HRAs benefit in a number of ways. For example: HRAs are employer owned, so monies do not belong to the employee. The payments an employer makes into an HRA are tax-deductible business expenses, and - in addition - HRAs do not require the establishment of a separate funding account.
HRA funds can be a "notional" account, meaning that HRA monies remain with the employer until a distribution is granted. Since only employer funds are involved, your employer makes the decisions regarding the amount that will be reimbursed every year, how much can be carried over each year, when reimbursements are made, whether the employer or employee pays first, what happens when employees leave the company, what the maximum amount is that employees can accumulate and whether specific types of the 213d eligible expenses are covered. Since the employer funds claims only as they are paid from the HRA, the unused account balances may not affect the company's cash flow.
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