NASE Blogs

HRAs: A Way to Give Back

Jun 12, 2013

Posted by Javan Porter - As a micro-business owner, you must make difficult decisions that carry ramifications that reach far beyond your office walls. Although the high health insurance costs that your employees face may worry you, an opportunity for you as the business owner to offer assistance is through a Health Reimbursement Arrangement (HRA).

An HRA allows an avenue for an employer to contribute towards an employee’s health insurance costs. The employer can simply add the contribution amount they decide on directly to the employee’s paycheck. HRA plans have no participation requirements, so businesses of any size can create one.

You want to be running your business, not in the health insurance business, and an HRA plan helps you do just that. Upon implementing a stand-alone HRA, you can let your employee pick the health plan that’s right for them, while knowing they will have a tax-free allowance to help pay for it.

As the Affordable Care Act is fully implemented, small-business owners may be forced to drop group coverage. However, HRA plans may help fill this void. HRA’s may help small businesses cut health insurance cost by more than 50 percent. If you’re interested in learning more about if an HRA plan is right for your business, check out the NASE HRA 105 program.