You may be wondering: is it possible to pay for health insurance premiums with an HRA? We say, yes, you absolutely can. But before you do anything else, you might be thinking of some questions. What in the world is an HRA? What is a health insurance premium? Would any of these affect me at all? You might be confused with all that information. And that is when we come in to clear things for you. We’ll dive straight into HRAs and other related content, simplified so you don’t have to spend hours learning all about them.
First Off, What Is A Health Insurance Premium?
A health insurance premium is the amount of money that you pay to keep your health insurance plan afloat every month. We are positive that you are familiar with streaming sites and monthly subscriptions. You need to pay monthly for the services. A health insurance premium is something similar. It is like a subscription that adds up to your bills every month. Unlike other plans, a premium is something you need to pay every month. And it always has a set price – it stays the same no matter what happens. Because it remains constant, insurance premiums are incredibly easy to incorporate into a custom monthly budget template or bill tracking software.
How Much Is My Premium?
Health premium payment cost depends on a couple of determinants. Do take note that these may differ from one location to another.
- Premium plan type
- An individual’s age
- ZIP code
- Smoking status
- Health history
Premium rates tend to go up, especially once healthcare prices start skyrocketing. So, you can save on cash if you consider these factors before setting up a plan.
What About An HRA?
A health reimbursement arrangement, or HRA, is an agreement or arrangement between workers and employers. The HRA allows an individual to reimburse medical expenses or insurance premiums. Using an HRA to pay insurance premiums is relatively easy, and it comes without any additional charges. The arrangement is tax-free. Don’t get us wrong. An HRA is not a bank account of sorts. Many people confuse the health arrangement for an account. And thus, they try to utilize it as such.
Types Of Health Reimbursement Arrangements
There are currently two kinds of HRA: the QSEHRA and the ICHRA. Each can reimburse insurance premiums. However, you have to take note of what makes them different.
QSEHRA stands for qualified small employer HRA. It is ideal for companies with fewer than fifty employees on their rosters. This type of HRA can also cover other medical expenses.
ICHRA stands for individual coverage HRA. Employers do not need to count their employees for this HRA. ICHRA can cover a company, regardless of its size. Another feature of ICHRA is that an employer has no limit as to how much reimbursement is available.
An employer has to take note of some requirements to make the company eligible for one or both types of HRA.
- For QSEHRA
Employees must not be under the age of 25 and do not have 90 days of employment. A QSEHRA is also available for part-timers and seasonal workers. Non-resident aliens who do not have source income can also go for a QSEHRA.
- For ICHRA
Workers who work full-time, part-time, and per season can avail an ICHRA. Those who are under a collective bargaining arrangement can also apply. And this arrangement is also available for employees who work on an hourly paid basis.
I Don’t Want TO Pay For My Premium. What Happens Then?
Most premium plans have a grace period to allow individuals to catch up on payments. However, if you ignore the premium for at least three months or ninety days, your authorized company might terminate your plan. So, take our advice, and use that HRA to your advantage.
Making Sense Of All This Info
Premiums are your monthly tickets to continuously covered health insurance, and an HRA can help you with that. It would be wise to do some research. You can go ahead and compare plans if you are not sure about what you have to go with at all.