Why is a ConsumerDirect HRA important?

ConsumerDirect may provide lower premiums

ConsumerDirect HRA plans are often used by companies with more than 50 employees. They may provide an affordable health plan option with more control over the savings vehicle. A High Deductible Health Plan (HDHP) is generally combined with a Health Reimbursement Arrangement (HRA). An HDHP exchanges a higher deductible for a lower premium.

Employers have more control with an HRA

Health Reimbursement Arrangements (HRAs) are funded solely by the employer. There are no contribution limits. HRAs can be funded with hard dollars, or with notional credits that are converted to hard dollars when a claim is verified. Employers have discretion to allow any unused funds to roll over to the next plan year.

HRA funds can be used for eligible expenses

An HRA savings vehicle helps employees pay for IRS-qualified medical expenses before the deductible is reached. Employees can use their HRA funds for any IRS-qualified medical expenses that are defined as eligible in the Summary Plan Document. Eligible expenses may include deductibles, co-pays, coinsurance, doctor fees, and dental care.

ConsumerDirect may promote healthy lifestyles

Employers can help motivate healthy lifestyles by linking HRA funding to wellness programs. An increased focus on wellness may result in increased productivity and reduced absenteeism. ConsumerDirect HRA plans are also designed to promote health consumerism with employees.