What is the Health Reimbursement Account Plan (HRA)?

 

The HRA Medical Plan is a medical plan with a Health Reimbursement Account funded by Roanoke City Public Schools.  This account is used on an employee’s behalf by UnitedHealthcare (UHC).

 

  • When an employee enrolls in the HRA Medical plan, there is a Health Reimbursement Account, (HRA) that is a part of the plan. This HRA is a tax-exempt account established by Roanoke City Public Schools and it can be funded only by employer contributions, and not through a Section 125 cafeteria plan. The contributions to the fund are excluded from the employee's gross income, and are not subject to FICA or FUTA taxes. The disbursements from the fund used to pay for qualifying medical expenses are also excluded from the employee's gross income.

  • The assets in the fund, HRA dollars, can only be used to pay the eligible medical expenses of the employee, the employee's enrolled spouse, and the employee's enrolled dependents. Roanoke City Public Schools’ HRA allows expenses that apply to the deductible along with coinsurance, the out-of-pocket maximum, and Rx co-pays as eligible expenses to be paid for by the HRA. 

 

How the Health Reimbursement Account Works

 

  • HRA Dollars- These are dollars provided by Roanoke City Public Schools to an employee’s HRA account. HRA Dollars are only distributed to providers by UnitedHealthcare.

  • HRA Dollar Access Point- The HRA Dollar Access Point is reached when an employee incurs $1,000 in eligible patient expenses. UnitedHealthcare will know when to distribute HRA dollars because they track employee expenses and know when an employee reaches the HRA Dollar Access Point, $1,000, in eligible patient expenses. After reaching the $1,000 Access Point, eligible patient expenses begin to be paid by UnitedHealthcare with dollars available in the HRA.

  • HRA Dollars Available-

    • Employee Only Coverage: Each plan year, $1,000 HRA dollars are available in the HRA. The maximum HRA dollars an employee can accumulate in the HRA in a plan year is $2,000. This includes the plan year HRA dollars ($1,000) and unused HRA dollars rolled over from the year before (maximum of $1,000). An employee may use any or all HRA dollars available once the access point is met. If an employee terminates employment, HRA dollars are not portable.

    • Employee + Child, Employee + Spouse, and Employee + Family Levels of Coverage: Each plan year, $2,000 HRA dollars are available. The maximum HRA Dollars an employee can accumulate in a plan year is $4,000. This includes the plan year HRA Dollars ($2,000) and unused HRA dollars rolled over from the year before (maximum of $2,000). Whichever family member reaches the access point first may use any or all HRA dollars available in the HRA account. If an employee terminates employment, HRA dollars are not portable.

      • Since the maximum total deductible for the family plan is $4,000, it is possible that if the first family member reaches the access point of $1,000 and uses all available HRA dollars, and a second family member reaches the access point, of $1,000, they will be required to meet the full deductible of $2,000 before qualifying for co-insurance of 80% paid by UHC and 20% paid by the member.

 

 

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