HRAs Good or Bad?

Richard Cantu
October 24, 2008 — 2,936 views  
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Employers looking to reduce the costs of offering group health care to their workers are quite happy with HRAs, as they offer a lot of advantages, not the least of which is they aren't like a plan and don't have the same level of intense management other health care plans do.

Another feature employers seem to like is the ability to place caps on the amount of money they are willing to pay out for employee's health care expenses. The system is fairly easy to administer, just post notices in the workplace letting people know what is available, have them sign up and they're in business. The only thing employees need to know is what categories the employer will pay in and the amounts.

HRAs are portable which makes employees happy, but they might not like the caps employers put on them. However the simplicity of just submitting receipts after paying for medical services using pre-taxed dollars is pretty enticing overall.

One of the most sought after perks in the workplace is health care coverage and if employers want to keep their workers, they need to offer something that will be of a major benefit to them. However, with the rising costs of health care, offering the traditional plans are becoming harder to justify due to the expense.

Whether you realize it or not, health care costs go up every year, and double on average every five years. If you don't own and run a business you may not realize what kind of impact that has on the bottom line. Wages becomes a major issue when the higher costs of health care are figured into the equation.

Are HRAs worth it? In a word, yes they are worth it. They will wind up becoming the wave of the future as more and more employers are searching for ways to mitigate health care costs. Employees on the other hand will have a plan that is personalized, portable, priced just right and paid with pre-taxed dollars. What more could you ask for?

About the Author

Richard Cantu is with Texas Health and Life, a Texas health insurance and Texas life insurance agency in Texas. To learn more, visit

Richard Cantu