2023 | Do I need an HRA software provider?

Health reimbursement arrangement (HRA) administration software makes implementing your business health care plan simple. Bet you didn’t think health coverage and simple could go together in the same sentence, did you? You can breathe easy knowing you have experts in your corner working hard to administer your HRA plan. When running a business, you become a pro at learning what to keep on your plate and what to outsource. So as you consider your health coverage options, ask yourself – do I need an HRA software provider? 

Do I need an HRA software provider?

What is an HRA?

A health reimbursement arrangement is a benefits solution that provides reimbursement to employees for health-related expenses. Since the IRS first acknowledged HRAs in 2002, many companies have turned away from traditional health insurance plans in favor of HRAs for a few big reasons.

There are tax advantages. Because employers can deduct these reimbursements from taxes, employees can take advantage of tax-free health care reimbursements..
Spending is flexible. With an HRA, the employer sets the allowance, and the employee submits claims for qualified medical expenses. HRAs are not pre-funded, so this makes healthcare spending more flexible. 
HRA compliance is heavily regulated. HRA software administrators are required to keep up with policy compliance. This assures employees that their reimbursement claims are being reviewed based on predetermined legal guidelines.  
There is less waste all around. Because employees can use HRA funds at their discretion (as long as claims fit qualified medical expenses), employees and employers alike experience a decrease in the amount of money wasted on health care.

While there are a few types of HRAs, two arrangements are most common:

QSEHRA (Qualified Small Employer HRA)

QSEHRA is an arrangement specifically designed for small businesses and nonprofits with fewer than 50 employees. When a business offers a QSEHRA, it may not also provide health insurance coverage to its employees. However, it allows their employees to qualify for reimbursement for approved healthcare costs.

Everything you need to know about QSEHRA.

ICHRA (Individual Coverage HRA)

ICHRA, on the other hand, is available to employers of all sizes and allows their employees to submit reimbursement requests for health insurance premiums and additional approved healthcare costs.

Everything you need to know about ICHRA.

Check this out if you need more information on determining if an HRA is right for your business!

While each company can determine the terms for their own HRA, employees can generally apply for reimbursements for:

Medical diagnoses, cures, treatments, and preventions
Personal care products
Health insurance premiums
Qualified long-term care services
And many more

For a complete list of approved expenses, take a look at this article. 

What is an HRA software provider?

Because of the high margin for error when administering your own HRA plan, many businesses have opted for using an HRA software provider to ensure accuracy and to minimize the headache of doing so themselves.

An HRA software provider is a one-stop shop for setup, compliance, onboarding, policy changes, and all documentation about your HRA plan.

HRA software providers support your plan administrator by: 

Plan set up. HRA software providers work with you to develop a plan that best fits your and your employees’ needs. They send out and collect the documentation needed to onboard all employees.
Monitor the movement of funds. By automatically tracking HRA funds, you’re able to have a real-life view at your business’s healthcare expenses.  
Reviewing all reimbursement requests. An HRA software provider will review all reimbursement requests submitted by your employees. Not only does this ensure your employees get a quick turnaround on their requests via convenient notifications, but they feel comfortable knowing their private medical information is only being reviewed through a secured account.
Record maintenance. The IRS requires all personnel records to be stored for seven years. Having all your health records in the same place means you don’t have to think twice about whether your files are complete or up to date.
Taxes. The annual tax filing is made so much easier by having all your tax records in one place, ready for reporting when the time comes!
HIPAA requirements. HIPAA laws protect all medical records, so it’s important to take necessary precautions to ensure you’re up to code. Through an HRA software provider, the records are secured, and your employees don’t need to worry about personal information being leaked to their boss.
Compliance with IRS regulations. Because HRAs are relatively new in the world of health care, the IRS is regularly updating laws. Instead of endlessly reading up on healthcare legislation to ensure your HRA system is up to code, HRA software providers are consistently updating their database to keep up with the newest requirements.  

With anything that involves legal compliance, it’s essential to find a reputable software provider you can trust with your administration.  

Don’t worry if this feels overwhelming– the support staff at Take Command is here to help! 

What to look for in your HRA software

Because the penalty for failing to comply with HRA policy requirements is $100 per person per day, finding the right fit for an HRA software provider is a task that should involve some thoughtful research.

When choosing the best HRA software for you, some important considerations are: 

Do they ensure compliance with IRS regulations? The last thing you want to do is commit to a provider that doesn’t guarantee up-to-date functions. When looking for the software provider that best meets your needs, you should prioritize one that automatically updates alongside policy changes.  
Are they employee-friendly? Employees should be able to quickly and easily make and track reimbursement requests. There’s little point in implementing an HRA plan if your employees can only access and navigate the required software with reference stacks of user manuals. 
Will it alleviate stress? The ideal HRA software should have a responsive and helpful support system, cloud-based access, provide automated notifications, and allow your software administrator to accurately and efficiently manage your business’s HRA plan.

If you have questions about how to ensure your HRA software will work for you, feel free to reach out.

Our team will be happy to take you step by step through the process!

How do I find the best HRA administration software?

It’s absolutely possible to administer your HRA without the help of HRA administration software. However, considering the headache associated with maintaining records, staying up with compliance standards, and tiptoeing around HIPAA, we recommend looking into the benefits of using an HRA administration software. 

When looking for the best HRA administration software, consider the following:

Record Maintenance. As we mentioned earlier, the IRS requires all employee records be stored for 7 years.  
Privacy Laws. All medical records are protected by HIPAA. As a result, an employer is not permitted to administer their own HRA plan.  
Frequent Policy Changes. The IRS regularly updates policies around HRA administration. It’s essential to stay up to date with compliance terms to avoid legal ramifications and to protect employees.
Check out this article to learn more about how to select the best HRA administration software for you!

Getting started with your HRA administration software

After you’ve found the best HRA software for your business, getting started is the easiest part!  

Step 1: Design your plan.

Meet with one of our experts to determine your budget, start date, and who on your team will be eligible to participate!  

Step 2: Onboard your team. 

We’ll reach out to your employees to help them with the onboarding process by:

Helping them select the plan that best fits their needs
Completing and filing all necessary paperwork
Giving them access to their personal portal
Answering any questions they may have about their plan or future access

Step 3: Begin!  

As soon as your team is onboarded, they can begin submitting reimbursement requests. We get to work immediately reviewing requests, maintaining records, and staying on top of all changing IRS regulations.  

And for you? We’ll send you complete reports regularly so you can keep a bird’s eye view of your HRA plan while staying out of the nitty-gritty details.