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Help understand HRA and HSA based Medical Plans

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Posted 1/30/2012 9:48 PM (GMT 0)
Ok, just when I thought I had this insurance stuff down I am starting a new job with insurance different than anything I have had before.

There are 2 options. A HRA - Health Reimbursement Account based Medical Plan or HSA - Health Savings Account based Medical Plan. Maybe I am learning impaired, but reading through this stuff I don't get it.

Is there a benefit to one over the other? I don't really understand the difference between the two.

Does anyone have any insight and currently use either one?
Posted 1/30/2012 11:18 PM (GMT 0)
Are they both employer funded?
Posted 1/31/2012 1:16 AM (GMT 0)
No only the HRA is emplyer funded. I don't have the cost info yet, but it does reference the monthly premium is higher for the HRA than the HSA. I guess part of it will depend how much it costs and how much the employer is putting in. It is confusing because some of the benefits of the HRA seem better and some of the HSA seem better and I have never dealt with either before.
Posted 1/31/2012 2:14 AM (GMT 0)
My husband is an insurance broker. He is asking what the deductibles for each are. Are they HMO,EPO, POS or PPO plans? Is there any employer match on the HSA? Are they offered through the same carrier? Do you have a max annual benefit on either plan? Are there specific exclusions on either plan?
Posted 1/31/2012 3:09 AM (GMT 0)
I have an HRA and was offered either the HRA or HSA plan through my employer.  they are similar plans but have different deductables and such.  basically, you are self insuring (with or without money added by your employer) then once you reach your deductable, co-insurance takes over and pays 80 or 90 percent, depending on the plan.  On my HRA, my primary care visits are only $25, but any tests they order I pay for up to my deductable which happens to be $4,000 individual or $8,000 max which them the coinsurancce picks up 100%.  depending on your plan you can put money into the HRA to use to pay the deductable.  or you can use a flex spending account.  These are based on in network. 

The idea with these plans is you are paying for some of the costs, so you should want to be a consumer and ask questions about the reason for a test and its costs.  However the downfall is when you go into the hospital. I did for pneumonia and was there for 4 days....not much questioning of why when your doctor sends you to hospital in a ambulance from her office!!!  Oh well, I will max out my deductable just from this visit so I will be at the 80% pay. 

I hope this helps.  I am a little scared becasue these plans are more geared for healthy people, not for people with cronic issues that they cannot change or prevent!!! 

Posted 1/31/2012 2:09 PM (GMT 0)
miropwl - your plan sounds similar to mine.

petitarte To answer a few of your questions.

They are the same carrier. The HRA does not allow me to contribute it is ER contributions only. It has a $2,000 deductible and $4,000 max out of pocket.

The HSA allows me to contribute but the ER does not contribute or match. It has a $3,000 deductible and $5,000 max out of pocket.

I think the plans are either PPO or POS, I know it is not an HMO.

A big difference I see is the HRA plan pays 100% out of the reimbursement account, then I pay 20% after deductible is met. The HSA pays 10% after the deductible is met, but there is no reimbursement account you owe the full deductible until the 10% kicks in.

I get the info next week that shows what each premium is and how much the ER is putting in the reimbursement account. They also have a wellness program where you can earn Health and Wellness dollars for completing certain activities and programs. The ER will deposit wellness dollars in either account.
Posted 1/31/2012 3:19 PM (GMT 0)
The way I understand it is the HRA account allows you to set aside pre-tax dollars for out of pocket expenses. Sometimes your employer will contribute, but sometimes not.   Your employer sets up the account and will take the funds directly from your paycheck and deposit it into your HRA account.  The downfall of this is that it's a "use it or lose it" kind of thing.  If there are funds left at the end of the year, you lose it.  The HSA account is an account you set up and you direct your own funds into it.  The good thing about the HSA account is that it rolls over from year to year so you never lose it, and it's also portable.  So if you leave your employer, you still keep your funds.  The bad thing about the HSA is that you can't enroll in it if you have insurance through your spouse or parents.  Is there an option for a flexible spending account (FSA or Section 125)?  If so, my experience says that's the way to go.  There is usually a much higher limit for contributing and can be used for all kinds of things (medical, dental, vision, OTC meds).
Posted 1/31/2012 3:53 PM (GMT 0)
Except FSA is use it or lose it also. If you have a healthy year, you could get burned.

Most HRA's do not allow the e'ee to contribute, as cupcake as noted hers does not.

I think the best way to approach is this:
Look at the math for the following 3 scenarios:
medical expenses = to the deductible
medical expenses = to what would trigger max out of pocket
medical expenses = to an in between point.

What is your total cost (premium + out of pocket med costs) in each scenario?

Another thing to look at is the premium difference between the HRA plan and the HSA plan. There is a "reimbursment account" with an HSA plan...it is your self-funded account. If your HRA premium is $100/mo and your HSA premium is $50/month, then you could contribute $50/month, or $600/year, to your own "reimbursement account" and still be making the same payment as you would just in premiums for the HRA.

These $$ amounts and details can vary from employer to employer, so it is tough to advise which plan you should take, in general. With more details, your specific situation would become clearer.
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