Financial

Giving Remote Teams More Flexibility in their Health Plan

With a remote workforce all around the country, finding a plan everyone liked was challenging. Through Liferaft, employees purchased the best plan available, then were easily reimbursed through the 100% digital platform.

September 16, 2022

Problem

This business struggled to find a national carrier that provided high-quality, accessible and affordable in-network care for all its remote team members working across the country. Team members on the East Coast preferred a different plan than those on the West Coast, but neither plan was available in both region. They had settled for a national carrier that was more expensive and had a smaller network of preferred providers. The team was unsatisfied.

How a Liferaft Health Expense Account Can Help

Often employers looking for a group plan have to compromise and provide a more expensive or lower quality plan that works nationally to cover all employees.

Liferaft Health Expense Accounts 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 Expense Account.

The Plan

This business chose to set up a Liferaft Health Expense Account that provided a no-tax reimbursement for each employee to purchase a healthcare plan on their state’s exchange. The Liferaft team recommended the best health insurance options for each employee based on their location, age, family circumstances, and the plan’s provider network quality. This allowed employees to confidently choose the best possible coverage for their needs and budget. 

The team was more satisfied with their choices of health care providers and the business ended up saving on their overall health expenses each year.

States Where You Can Save Big With a Health Savings Account

While a Liferaft Health Expense Account has many different use cases, it can be particularly effective in providing major medical insurance in states where the rates for health insurance on the state’s exchange are cheaper than group health insurance rates. 

Through the Health Expense Account, employers can reimburse the individual for their own health insurance premiums rather than paying for a group plan. The chart below shows the states that have the most significant cost differences when comparing individual versus group plans.

When moving to a Health Expense Account for your company’s major medical insurance, the Liferaft team will analyze your employee census and make a unique plan recommendation for each employee. Plan recommendations will consider each employee's specific location, age, family circumstances, and the plan’s provider network quality. This guidance will allow employees to confidently choose the best possible coverage for their needs and budget.

How it works

A Liferaft Health Expense Account is fully customizable based on what makes the most sense for your organization. Our team will handle all the paperwork to properly set up your account—making it easy for you to benefit from all available tax advantages. 

  • Design your benefit: Decide how much tax-free money to offer each month, which expenses should be eligible for reimbursement, or offer various benefits to different employee groups.
  • Employees purchase qualifying expenses: Allowances can be used for qualifying medical expenses and healthcare services, including prescription glasses, healthcare premiums, physical therapy, and more.
  • Employees reimbursed: Our user-friendly 100% digital experience makes it easy for you and your employees to submit a claim and get reimbursed for eligible expenses.

Frequently Asked Questions

Are Health Expense Accounts considered income?

According to the IRS, employer-issued reimbursements are not considered income and are exempt from federal income and payroll taxes. This is one of the significant tax benefits of distributing employee benefits through a Liferaft Health Expense Account. 

What happened to unused funds? Do they roll over?

One of the central values of a Liferaft Health Expense Account is flexibility, and the answer here depends on the employer’s specific policies. Some companies may have a "use it or lose it" policy regarding account funds, meaning that any funds not used by December 31st will be forfeited and cannot be carried over into the new year. Other employers allow employees to roll over a certain amount of money from one year to the next. Put plainly—it’s up to you! 

What are some disadvantages of an HRA?

Because the funds in a Liferaft Health Expense Account are employer-funded, the employer owns the money in the account even though it is for the individual to use. If the person leaves the company or their job is terminated, the account funds stay behind with their former employer.  Employers can offer a retirement account that allows former employees to utilize funds after leaving the company.

Additionally, different employers often have different rules for reimbursement, which can be a problem for employees if they switch companies. Aside from mandatory requirements like COBRA continuation, ERISA and HIPAA, plans can vary widely. 

Which employees are eligible for a Liferaft Health Expense Account?

Liferaft Health Expense Accounts can be offered to any employee, as long as each job class is treated equally. This means you can easily provide benefits to part-time and seasonal employees. However, depending on what type of expenses you plan on reimbursing, there are specific IRS requirements. After learning about your business and goals, Liferaft will make a plan recommendation for the most tax-advantaged, affordable way to structure your account. 

Interested in Getting Coverage?

If you're interested in learning more about how to save money on your business' healthcare expenses, sign up for a free 15-minute consultation with our team at Liferaft. Many of our clients have also found Liferaft's free Guide to Health Reimbursement Arrangements a comprehensive overview of how health expense accounts work and why companies are using them.

Keep Reading