As healthcare costs continue to rise, employers are considering consumer-driven healthcare. What is it? Consumer-driven healthcare (CDHC) is a concept which results in employees being more proactive consumers through a process of making informed purchases at the point of care.

Employers across the country are searching for ways to reduce healthcare coverage costs through a variety of consumer-driven healthcare alternatives, including medical reimbursement flexible plans, health savings accounts (HSAs), and health reimbursement arrangements (HRAs).

HitesmanLaw has widespread experience working with and educating human resources professionals, third party administrators, and business owners regarding health reimbursement arrangements, which are considered defined contribution health plans. Our attorneys counsel clients regarding all aspects of HRAs, including:

• How HRAs reduce health plan costs for employers
• What’s in an HRA for employees
• Who can and cannot participate in an HRA
• How HRAs are funded
• The difference between cafeteria plans and HRAs
• What flex rules apply to HRAs including “use it or lose it”
• Why HRAs allow roll-over of unused balances
• What expenses are eligible under an HRA including health expenses and health premiums, long-term care insurance premiums
• If HRA dollars can be cashed out
• How cafeteria plans and HRAs can both be used by employers
• HRAs and the Internal Revenue Code
• How ERISA rules apply to HRAs
• Required reporting and documentation
• Following non-discrimination rules
• Offering HRAs under COBRA
• Bundled and un-bundled accounts
• Deductibles
• Combining HRAs with a Voluntary Employees’ Beneficiary Association (VEBA)