Here are 6 Situations Where a Liferaft Health Reimbursement Arrangement is a No Brainer

In some situations, opening a Liferaft Health Reimbursement Arrangement is a no-brainer. Here we outline the top six use cases where a Liferaft account just makes sense.

September 16, 2022

What is a Health Reimbursement Arrangement?

A Health Reimbursement Arrangement is something an employer can set up to reimburse employees for out-of-pocket healthcare expenses. The funds in the account are not subject to taxes and can be used to cover a wide range of healthcare costs, including premiums, co-pays, and dental and vision expenses. They can also be used to supplement an existing health insurance plan, helping employees afford important treatments not traditionally covered by insurance, such as mental health care, fertility treatments, prescription drug costs, and more.

Compared to traditional group health insurance plans, a Health Reimbursement Arrangement is more flexible, affordable, and easier to administer. Plus, you can easily tailor plans to fit the specific needs of your employees.

Offering health insurance for the first time

For companies just starting to provide health benefits for their team, a Health Reimbursement Arrangement can be a great option. These plans allow employers to control costs, provide flexibility, and easily scale their benefits as their team grows. 

Most insurers require a certain percentage of eligible employees to participate in the healthcare plan (often 75 percent). These participation requirements often limit smaller employers to offering a single health plan. HRA plans have no participation requirements and give employees the freedom to choose the healthcare plan that works best for their region, family, and health situation. 

Smaller businesses have limited negotiating power and can be stuck with higher premiums than if their employees purchase health insurance through the individual market. As healthcare premiums continue to rise, employers stuck in a small group insurance plan don’t have control over increasing costs. Premium rate increases can present fiscal challenges for new businesses just beginning to offer benefits. 

With an HRA plan, employers decide how much to reimburse their employees, what expenses to repay, and how frequently to process reimbursements. This flexibility makes it easy to set up a plan that works for your business' nuances and budget.  

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Group health can be complex, restrictive, and costly. Liferaft offers something different.

Liferaft's 2023 Whitepaper on HRAs is the most comprehensive guide available, giving you what you need to determine if an HRA makes sense for your business.
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What you get in your guide:
• What is an HRA?
• HRA Requirements & Features
• Eligible HRA Expenses
• When an HRA Makes Sense
• Different HRA Types
• States Where HRA Works Best

Providing health insurance for a remote or distributed team

For employers with remote or distributed teams, it can be challenging to find a national carrier that provides high-quality, accessible and affordable in-network care for all team members. Often employers looking for a group plan have to compromise and provide a more expensive or lower quality plan that can cover all employees. 

A Liferaft Health Reimbursement Arrangements can save you up to 65% on healthcare costs and give your employees greater flexibility in choosing a plan. If you have remote employees or a distributed team, they can pick from any plan available on the individual exchange, then get a no-tax reimbursement from your Health Reimbursement Arrangement. 

Supplementing group insurance coverage

As premiums and healthcare-related costs continue to rise, providing additional coverage for out-of-pocket health expenses can attract top talent and boost employee retention.

Through a health reimbursement arrangement, employees can be reimbursed tax-free for costs like deductibles, co-pays, co-insurance, dental and vision premiums, and other qualified expenses not covered by their group health plan. This HRA further reduces the financial burden on employees when they have out-of-pocket health expenses or unexpected medical bills. 

2023 Year-End Report: 
HRA Trends & Insights

Liferaft's 2023 Year-End Report gives brokers and business owners the full breakdown of HRA market challenges, employer concerns, growth opportunities, and more, to help you can stay ahead of the curve.
You will automatically be redirected to your whitepaper download after submission.
This whitepaper includes:
2023 HRA Trends  |  Top Employer Concerns  |  Trends in HRA Account Types  |  Potential Pitfalls & Challenges  |  ICHRA Enrollment Stats & Trends  |  2024 Areas of Opportunity & Growth

Expanding coverage for specialty care

A Liferaft Health Reimbursement Arrangement is an excellent option for employers who are happy with their current group health insurance but want to provide additional coverage for specialty care

Frequently, employers will choose to expand coverage for treatments they deem essential that traditional insurance doesn’t typically fully cover. This can include mental health services, oral and IVF fertility treatments, birth control, prescription pill costs, abortion care and related expenses, and more. 

The employer has broad flexibility in determining what expenses are eligible for reimbursement in their Liferaft Health Reimbursement Arrangement, as long as they qualify according to the IRS Publication 502.

Supplementing your group health insurance sends a strong message that your employees' health and well-being are top priorities.

Resource-constrained company wants to subsidize coverage

If you're a resource-constrained company that can’t cover 100% of your employees' health insurance, a Health Reimbursement Arrangement is a great option. With Liferaft, you can allocate a specific amount to each employee with flexibility on different reimbursement amounts based on the class of employee, defined by hours worked, seniority, location, etc. 

Employees can use the account to pay for a variety of health-related expenses, including premiums, co-pays, and prescriptions. The account is easy to set up and manage—Liferaft handles the paperwork to get your account set up in the most tax-advantaged and affordable way.

This structure helps to control costs for the company while ensuring that employees have some financial assistance with their healthcare costs. Your employees will appreciate the extra help with their healthcare costs, demonstrating you care about their well-being.

Group insurance rates are more expensive than individual rates in your state

In many states, the rates for individual health care plans on the individual exchange are more affordable than those for small group plans. Companies can use a Liferaft Health Reimbursement Arrangement to reimburse employees directly for the cost of their health insurance premiums. This help employees save money on their healthcare costs, and it can also help companies save money on their overall healthcare budget.

States where there are big savings on the individual exchange include Rhode Island (88% cost savings), New Mexico (81%), Maryland (64%), Minnesota (62%), Massachusetts (61%), Colorado (56%), North Dakota (47%), New Hampshire (46%), Michigan (46%), Washington (43%), District of Columbia (40%), California (35%), and more. 

See how a Health Reimbursement Arrangement Works

Book your consult with Liferaft

Our team knows the ins and outs of the health insurance marketplace and will guide you towards the solution that make the most sense for your business and your team. Come with questions! Our experts are happy to dig into the details to get you the clarity you need.

During the call, Liferaft will run a cost-benefit analysis on your company's current healthcare spending and show you different ways you can save—without sacrificing plan quality. After your consult, Liferaft will design a unique plan for your employee's health insurance, including suggested plans and accounts, plan policy documents, and the annual budget.

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