An HRA Administrator is an individual or entity responsible for overseeing the daily activities involved in managing a health reimbursement arrangement. Their primary responsibilities include:

Plan Design and Setup

The HRA Administrator is responsible for designing and setting up the HRA plan. This involves determining eligibility criteria, contribution amounts, covered expenses, and any plan limitations. A well-designed HRA plan is crucial to ensure it aligns with the business's goals and provides maximum benefit to employees.

Employee Communication

Effective communication is key to ensuring employees understand their HRA benefits. The HRA Administrator communicates the details of the HRA plan to employees, explaining eligibility requirements, reimbursement procedures, and any other relevant information. They address employee inquiries and provide support throughout the HRA enrollment process, ensuring employees are well-informed and can make the most of their HRA accounts.

Documentation and Record Keeping

Accurate documentation and record keeping are essential for maintaining compliance and ensuring seamless administration of HRAs. The HRA Administrator maintains records of employee eligibility, reimbursement requests, and HRA plan documentation. They ensure proper documentation is provided by employees for reimbursement claims, keeping track of all transactions and receipts for auditing and compliance purposes.

Compliance and Regulatory Requirements

HRAs are subject to various IRS regulations and other legal requirements. The HRA Administrator stays updated on changing regulations and ensures the HRA plan remains compliant. They adjust the plan as necessary to meet regulatory requirements and prevent compliance errors or penalties for the business.

Claims Processing and Reimbursements

One of the key responsibilities of an HRA Administrator is reviewing and processing reimbursement requests submitted by employees. They verify the eligibility of expenses, ensuring they align with the HRA plan guidelines. The Administrator coordinates with the appropriate parties to facilitate timely and accurate reimbursements, making the reimbursement process smooth and hassle-free for employees.

Reporting and Analysis

Generating reports on HRA plan utilization, expenses, and trends is essential for businesses to assess the effectiveness of their HRA plan. The HRA Administrator provides valuable insights through reporting and analysis, allowing employers to monitor costs, identify areas for improvement, and make informed decisions regarding plan adjustments or enhancements.

Vendor Management

In some cases, HRAs may be outsourced to third-party administrators or insurance providers. In such instances, the HRA Administrator oversees the relationship, ensuring effective communication, adherence to service level agreements, and addressing any issues that may arise. This ensures a seamless experience for the business while working with external partners.

Setting up an HRA with the assistance of an HRA Administrator typically involves the following steps:

1. Choose the HRA type

‍There are different types of HRAs available, such as the Qualified Small Employer Health Reimbursement Arrangement (QSEHRA), Individual Coverage Health Reimbursement Arrangement (ICHRA), Expected Benefit Health Reimbursement Arrangement (EBHRA), and Standard Health Reimbursement Arrangement. The HRA Administrator guides businesses in selecting the most suitable HRA type for their needs.

2. Customize the HRA benefits

The HRA Administrator helps customize the HRA benefits based on the chosen type. This includes determining the monthly allowance to offer, specifying eligible expenses for reimbursement, and establishing employee participation criteria.

3. Choose a start date

‍Businesses need to decide on a start date for the HRA plan to begin. This allows employees to plan their healthcare expenses accordingly.

4. Make any changes to current policies

Depending on the HRA type chosen, businesses may need to make changes to their existing group insurance policies. The HRA Administrator provides guidance on the necessary adjustments.

5. Generate legal plan documents

‍The HRA Administrator generates the required legal plan documents that outline the details of the HRA plan. These documents provide clarity to both employers and employees regarding the plan's terms and conditions.

6. Enroll employees in individual health insurance

‍Depending on the HRA plan type, the HRA Administrator may conduct one-on-one meetings with employees to enroll them in individual health insurance plans. This personalized assistance ensures a smooth transition for employees who are switching from group to individual plans or setting up benefits for the first time.

7. Initiate the reimbursement process

‍Once the HRA plan begins on the designated start date, employees can start submitting claims for reimbursement through the HRA Administrator's digital platform. The Administrator reviews and processes the reimbursement requests, ensuring they comply with the plan guidelines, and facilitates timely reimbursements.

Employing an HRA Administrator offers several benefits to businesses, including:

Expertise and Compliance

HRA Administrators have specialized knowledge and expertise in managing HRAs. They possess a deep understanding of IRS regulations and compliance requirements, ensuring the HRA plan is designed and administered in accordance with these regulations. This reduces the risk of compliance errors or penalties for the business.

Administrative Efficiency

Outsourcing HRA administration to a dedicated Administrator saves time and resources for businesses. The Administrator handles tasks such as eligibility tracking, claims processing, documentation management, and employee support, allowing the business to focus on its core operations.

Improved Employee Experience

An HRA Administrator enhances the employee experience by providing clear communication, guidance, and support regarding the HRA plan. They address employee inquiries, assist with reimbursement claims, and ensure timely and accurate reimbursements, contributing to employee satisfaction and engagement.

Cost Control and Budgeting

HRA Administrators help businesses control healthcare costs and budget effectively. They provide reporting and analysis on HRA plan utilization, expenses, and trends, allowing businesses to identify cost drivers and make informed decisions regarding plan design, adjustments, or cost-saving measures.

Vendor Management

If the HRA program involves working with third-party administrators or insurance providers, an HRA Administrator can handle the relationship and coordinate with vendors on behalf of the business. This includes ensuring compliance with service-level agreements, addressing issues, and streamlining communication, freeing up the business's resources.

Scalability and Flexibility

An HRA Administrator can adapt to the changing needs of the business. Whether it involves scaling up or down, making plan adjustments, or accommodating regulatory changes, the Administrator provides guidance on plan options and helps customize the HRA program to meet the specific needs and goals of the business.

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What qualifications are required to become an HRA Administrator?

There are no specific qualifications or certifications mandated by regulatory authorities for HRA Administrators. However, having a background or experience in benefits administration, healthcare, or human resources can be beneficial. Staying updated on relevant laws and regulations, such as IRS guidelines, and obtaining certifications in benefits administration can enhance one's expertise in this role.

What are the key responsibilities of an HRA Administrator?

The key responsibilities of an HRA Administrator include designing and setting up the HRA plan, communicating plan details to employees, managing documentation and record keeping, ensuring compliance with regulations, processing reimbursement claims, generating reports, and overseeing vendor relationships if applicable.

How can an HRA Administrator benefit my business?

An HRA Administrator brings specialized knowledge and expertise in managing HRAs, ensuring compliance, and reducing the risk of errors. They streamline administrative processes, enhance the employee experience through clear communication and support, control healthcare costs, provide vendor management, and offer scalability and flexibility to adapt to the changing needs of the business.

What distinguishes Liferaft as an HRA Administrator?

Liferaft stands out as an affordable and user-friendly HRA Administrator. They provide an easy-to-use platform, individual plan recommendations to employees, one-on-one enrollment assistance, and comprehensive support throughout the HRA administration process. Their focus on affordability and user experience sets them apart from other administrators.

What should businesses consider regarding compliance when using an HRA Administrator?

Businesses should ensure that the HRA Administrator has appropriate measures in place to ensure your HRA plan stays in compliance and protects the privacy and security of employee health information under HIPAA. They should also ensure compliance with IRS regulations, ERISA requirements (if applicable), discrimination rules, state and local laws, and maintain accurate benefit plan documents while regularly monitoring compliance to address any changes or adjustments needed.

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.