Employees submit claims for health insurance premiums and other medical expenses to ZaneHRA online, via fax, or mail. Once submitted, claims are processed by ZaneHRA (typically in a few hours), and employers click a button periodically to reimburse employees via check, payroll addition, or direct deposit. ZaneHRA never touches the employer's money—all reimbursements go directly from the employer to the employee at the time and method chosen by the employer. All claims are kept HIPAA-protected and all receipts are stored digitally in compliance with HIPAA for 10 years as required by the IRS for company and personal audit purposes.
The U.S. federal government has specific regulations that employers must comply with in order to reimburse employees for individual health insurance premiums without triggering ERISA plan status for the individual health insurance policies, violating HIPAA-privacy rules, or violating federal income tax regulations. ZaneHRA has built-in patent pending safeguards and protections that automatically make employers compliant with these federal regulations.
Federal regulations prohibit employers from paying directly for employee's medical expenses, including health insurance premiums, outside of an HRA or other ERISA-qualified group health benefits plan. ZaneHRA automatically makes employers HIPAA and ERISA compliant with these regulations. For example, to comply with ERISA, ZaneHRA assures that all employees in a given class receive the same level of benefits and that benefits are disclosed to employees. To comply with HIPAA, ZaneHRA protects employee privacy by assuring that employers are not aware of which specific medical items, including personal health insurance policies, are purchased by employees.
The federal government has guidelines for employers who want to allow insurers or their representatives access to their employees without triggering ERISA plan status and the associated liabilities. While ZaneHRA is designed to comply with these guidelines, each employer bears ultimate responsibility for complying with these regulations.
Compliance includes the following restrictions on the actions of employers:
Employers must not be involved in employees' decision to purchase individual health insurance, or their decision on which insurer or plan to use. They must not get involved in any negotiations with an insurance carrier over price or benefits of individual health insurance plans, and must not provide employees with claim forms or other materials related to their individual health insurance policies.
Employers may not directly pay premiums on individual health insurance policies. They must not receive any compensation from an insurance carrier in connection with an employee's individual health insurance policy.
Employers must not become involved in any claim dispute between an employee and an insurance carrier; all inquiries must be directed to the insurer.
To comply with point (1) above, while still making contributions to an HRA that can reimburse for individual health insurance premiums, employers must follow these additional guidelines:
Employers must not pressure employees to use the money in their HRA to pay for individual insurance coverage. Employers may require HRA participants to have health insurance coverage to participate in their HRA provided this requirement is waived for participants medically unqualified to obtain health insurance (e.g. rejected, uprated, excluded).
In addition to reimbursing for health insurance premiums, employers should also allow the use of HRA funds for qualified medical expenses.
Employers must limit their role to simply verifying that a qualified medical expense (such as an individual health insurance premium) was incurred, and then reimbursing such amount from the HRA.
If, upon audit, an HRA plan is found to not comply with ERISA rules, then the employer must provide the same level of benefits to all employees, regardless of their class, from the time the HRA was created to the date of the violation. As health care reform will be changing the landscape of health benefits. New regulations, guidelines and notices must be taken into account and incorporated into your HRA plan.