One of the growing strategies for employers in achieving lower healthcare costs includes the use of a Health Reimbursement Arrangement (HRA) with their underlying “core” medical plan. When an employer creates an HRA, they generally start by reducing the costs in their core medical plan by shifting more of the risk to plan members. Then, they allocate some portion of the resulting financial savings to the HRA Plan, which essentially operates as a limited self-funded plan, designed to assist plan members in offsetting some of their higher deductibles and co-payments.
HRAs may be constructed in a number of different ways depending upon the budget and philosophy of the employer. Without professional guidance, it is often difficult for employers to accurately project the claims utilization of their HRA plan(s) in advance.
Medcom Benefit Solutions offers a “turnkey” solution for employers in developing an actuarially sound projection of HRA costs as a part of our actuarial portfolio of services. Frequently, we work closely with employers in “modeling” several HRA plan designs up front so that they may develop the best solution for their program.