Implementing a Standard HRA in the benefits package can bring significant advantages for both employees and employers. It helps reduce health insurance costs, provides flexibility in plan options, offers tax benefits, promotes employee health and productivity, and contributes to increased employee retention and effective recruitment efforts. By incorporating a Standard HRA into their benefits package, employers can create a supportive and appealing work environment while employees gain access to financial assistance for their healthcare needs.
Greater flexibility in health insurance plans
Unlike other types of health accounts, such as Health Savings Accounts (HSAs) that require enrollment in a High Deductible Health Plan (HDHP), a Standard HRA can be paired with any kind of group health insurance plan. This flexibility allows employers to offer a range of plans that suit their budgets and accommodates the diverse needs of their employees. Employees can choose the health plan that works best for their families, knowing that their participation in the HRA won't be affected.
Employer reimbursements through a Standard HRA are considered tax-deductible business expenses. This tax advantage provides additional savings for employers and encourages them to offer comprehensive healthcare benefits to their employees.
Healthier and more productive employees
With a Standard HRA in place, employees have a means to pay for their medical expenses, which promotes proactive healthcare behavior. Employees are more likely to seek medical attention promptly when health issues arise, rather than waiting for emergencies to occur. Regular medical care leads to better overall health, resulting in more productive employees who can perform at their best.
Lower health insurance costs for employers
By including a Standard HRA in the benefits package, employers can experience reduced health insurance costs. When employees utilize their HRA funds for eligible medical expenses, fewer claims are filed with the insurance carrier. This, in turn, helps maintain or lower insurance premium rates, providing cost savings for employers.
Increased employee retention and effective recruiting
Employee turnover can be costly for businesses, with expenses ranging from 1.5 to 2 times an employee's annual salary. By offering a Standard HRA that helps employees cover out-of-pocket medical expenses, employers create a supportive work environment that fosters loyalty and increases employee retention. When employees feel supported and valued, they are more likely to stay with the company. Additionally, a comprehensive benefits package that includes a Standard HRA can be an effective recruiting tool. It showcases the employer's commitment to employee well-being and attracts top talent seeking comprehensive healthcare benefits.