HRAs are special employer-funded accounts set up to reimburse specific medical expenses directly to employees. They came into being when the IRS issued Notice 2002-45 and Revenue Ruling 2002-41. Because individual health insurance premiums are much less expensive than group coverage, HRAs can allow employees of a small business to obtain much less expensive, permanent individual health insurance coverage that is not tied to their employment.

"This is working best for small businesses where all employees and their family members can easily pass the health questionnaire that is part of applying for individual coverage," says Wiley Long, president of HSA for America. "The employer no longer has to worry about administering a group health insurance plan, and the employee no longer has to worry about losing their coverage if they quit their job."

HRAs are sometimes referred to as Section 105 plans after the section in the U.S. Tax Code that governs them. The employer establishes the expenses, along with the annual caps, that will be reimbursed. Qualified expenses could include health insurance premiums, preventive expenses such as check-ups or smoking cessation programs, and other out-of-pocket medical expenses. The reimbursement is considered to be a tax-free fringe benefit for the employee.

Many small business employees are also setting up an HSA within their Health Reimbursement Arrangement. "Health Savings Accounts are allowed with an HRA, as long as the HRA does not reimburse expenses that would otherwise go toward the deductible of the HSA-qualified health insurance," added Long.

Health Reimbursement Arrangements require very little administration, and are simple and inexpensive to set up. HSA for America is conducting a free teleseminar on Thursday, March 29, at 2pm Eastern, titled "Individual Health Insurance For Small Business Employees". To sign up for the teleseminar and to get more information on how small businesses are using HRAs, visit: http://www.HSAforAmerica.com/HRA.htm

HSA for America is a nationwide brokerage firm specializing in individual and family health insurance plans that are qualified to work with Health Savings Accounts. HSA for America represents many different insurance companies, offers instant online quotes, online applications, and comparisons of HSA administrators.