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Frequently Asked Questions
Health Reimbursement Arrangement
What is the MercyHRA™ plan?
How does the HRA plan work?
Who can set up an HRA?
What are
the advantages of an HRA?
How
do I find out what expenses are considered “eligible”?
Are
preventive care services covered?
When does my employer
put money into my HRA?
What happens to my HRA funds not used by the end of the plan year?
What happens to my HRA funds if my employment with my company is terminated?
What is the MercyHRA™plan?
MercyHRATM is a consumer-directed health plan
offered by Mercy Health Plans. Consumer-directed plans are designed to educate
you about healthcare options and empower you to take control of your health
and the dollars you spend towards your care. With MercyHRATM,
your employer makes healthcare dollars available for you in a Health Reimbursement
Arrangement (HRA) to help you pay for medical expenses not covered under
your employer’s health plan.
MercyHRATM also includes traditional health coverage
just like a typical health plan, which will protect you against further
healthcare expenses. In addition, MercyHRATM provides access
to health information and educational tools to help you manage your health,
health decisions, and healthcare dollars.
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How does the
HRA plan work?
First, your employer makes annual contributions to your
HRA, either with full contributions up front, or with installments through
the year.
You use your account to pay for eligible healthcare expenses,
including your medical plan deductible and copayments. If you do not spend
all of your HRA dollars, and you have money remaining in your HRA at the
end of the year, it stays in your HRA for as long as you’re enrolled in
the plan to help pay for future healthcare needs.
As you incur healthcare expenses, you pay for them upfront.
You will be reimbursed for claims up to the amount available in your account,
with no taxes due on the reimbursements you receive.
If you spend all your HRA funds, you will pay a limited
amount out of pocket to satisfy your deductible before your traditional
health insurance coverage begins.
Some preventive care is covered under your MercyHRATM
plan. MercyHRATM covers nationally recommended preventive care
with no deduction from your HRA and no out-of-pocket costs to you, as long
as you receive care from a provider who participates in Mercy Health Plans’
network.
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Who can set up an
HRA?
Employers establish and maintain HRAs for those employees
determined eligible by the employer. An HRA is a benefit subject to certain
federal laws such as the Internal Revenue Code and, if the company is privately
owned, the Employee Retirement Income Security Act (ERISA).
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What
are the advantages of an HRA?
There are several advantages to using an HRA.
Choosing a health plan with an HRA option still
provides the security and protection needed for large or unexpected expenses.
An HRA provides tax-free money that helps pay for
eligible healthcare expenses.
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How
do I find out what expenses are considered “eligible”?
You can use HRA funds to pay for your own or your dependents’
eligible health care expenses, such as a copayment at your doctor’s office
or prescriptions at the pharmacy.
According to the IRS tax code, eligible expenses may include
the costs for healthcare providers like physicians, surgeons and specialists,
and materials like eyeglasses, contact lenses and prescription and over-the-counter
drugs.
In addition, you can use HRA funds on a tax-free basis to
pay for*:
Standard medical services such as office visits,
annual medical physicals and more
Prescriptions, over-the-counter medicines and health
care products
Preventive and restorative dental care, as well
as orthodontia for children and adults
Eyeglasses, contact lenses and solutions, and laser
eye surgery
Copayments, coinsurance and deductibles
Acupuncture, chiropractic services and many more
medical expenses not typically covered by health plans.
*Contact your employer for a description of expenses
actually covered by your HRA. Your employer may limit the scope of expenses
covered under the HRA.
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Are
preventive care services covered?
MercyHRATM covers preventive care services like
routine physical exams, immunizations and mammograms. The cost for these
services is not deducted from your HRA and you do not have to pay anything
out of pocket.
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When does my employer
put money into my HRA?
Your employer will either contribute to your HRA in one
lump sum at the beginning of the plan year, or will prorate the contribution
over the course of the year. See your HR department for specific information.
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What happens to my HRA funds not used by the end of the plan year?
One of the great features of an HRA is that your unused funds may roll over from year to year. Unlike Health FSA's, amounts allocated to your HRA may roll over to the extent permitted by the employer. This allows you flexibility to save for future medical expenses, such as a surgery or the birth of a child. However, if you terminate employment (and do not elect COBRA), you generally forfeit the amount remaining in your account.
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What happens to my HRA funds if my employment with my company is terminated?
Because your HRA is funded and maintained by your current employer, you will forfeit any unused balance upon termination. Your employer will reclaim the balance of your HRA.
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