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A Guide to Health Reimbursement Accounts

Administration Software for a Health Reimbursement Account

Health Reimbursement Account Administration Software provides companies with:Administration Software for a Health Reimbursement Account

  • simple administration,

  • a compliant benefit, and

  • personalization in plan design.

This section outlines 13 features to look for with Health Reimbursement Account (HRA) Administration Software.

(1) Automated compliance and software updates

Your administration tool should keep your benefit plan up to date and compliant with applicable rules and regulations by including, at minimum, the following:

  • A legal plan document and SPD
  • Collection and storage of electronic enrollment signatures
  • Verification and compliance with HIPAA privacy laws
  • ERISA compliance
  • Proof of minimum essential coverage
  • Internal and external documentation appeal process
  • Dependent coverage for adult children up to age 26
  • Notice automation as required

(2) Online administrative access

Your company should be able to manage the entire HRA online. The cloud-based software should allow your plan administrator to easily add and remove employees, modify plan rules, record reimbursements, and access reporting tools.

(3) Real-time accounting

Your administration tool should automatically keep track of monthly allowances, verified expenses, reimbursements, and balances. It should provide real-time access to accounting details, including total allowances, total reimbursements, and outstanding liability to the company in aggregate and on an employee-by-employee basis.

(4) Streamlined employee enrollment

Your administration tool should allow for easy employee management. It should automatically email a welcome letter and other plan administration information. For terminated employees, the system should automatically track a run-out period and notify the employee they’ve been removed.

(5) Employee reimbursement and record-keeping

Your administration tool should allow the plan administrator to record reimbursements individually or on a periodic batch basis. Reimbursements are paid via check or payroll. The system should leave a well-organized and permanently available audit trail. Additionally, it should send email notifications to employees when their reimbursement request is approved, and again confirming when (and how) it will be reimbursed.

(6) Automated renewals

One of the benefits of an HRA is eliminating the labor-intensive annual renewal process of traditional group policies. Your administration tool should allow you to automatically renew online. There should be no paperwork required and no renewal fees. The process should be quick and easy for the plan administrator, and it should not affect employees.

(7) Online access and balance tracking for employees

Your administration tool should provide each employee with secure online access to view their allowances and expenses and to request reimbursements. It should also provide access to the required plan documents.

(8) Employee welcome letters

When employees are added to the HRA, your administration tool should automatically customize and distribute employee welcome letters. These welcome letters instruct employees on how to use the HRA.

(9) Access to a health benefits advisor

Your administration tool should provide employees with online access to individual health insurance resources. You should have the option of directing employees to a health insurance broker or a website for health insurance information. The software should not restrict employees from purchasing individual coverage from any source, whether through a broker, through the health insurance Marketplace, or directly from an insurance company. Look for an administration tool that helps employees shop for and purchase individual health insurance policies, ideally directing employees to a designated broker or online comparison site for quotes.

(10) HSA compatibility

Your administration tool should be compatible with health savings accounts (HSAs), allowing employees to contribute to an HSA while participating in your HRA. Even better, your administration tool should have relationships with top HSA providers to help employees open an HSA.

(11) Easy reimbursement requests

Your administration tool should allow employees to request reimbursement online and immediately acknowledge their request and provide a link to monitor request status. The software should have all documentation permanently available for convenient employee access.

(12) Fast reimbursement request review service

Your administration tool should provide an independent service to review employee reimbursement requests and provide a recommendation to the plan administrator within one business day. Employees should be able to inquire about their request online, through email, or by telephone. Employees receive an email with information on perfecting a reimbursement request if the submitted documents do not match the request.

(13) Reimbursement of large expenses over time

Your administration tool should make it easy for employees to track reimbursement requests and balances. If an employee's reimbursement request exceeds his or her balance, the software should not reject it. Rather, employees should continue to receive partial reimbursements until the entire expense has been reimbursed.

The Comprehensive Guide to the Small Business HRA