In this section we will cover design requirements for Health Reimbursement Plans (HRPs).
A Health Reimbursement Plan (HRP) is designed for individual health insurance reimbursement.
Because of the Affordable Care Act's new "market reforms," an HRP is structured to reimburse employees for:
health insurance premiums up to a specified monthly healthcare allowance, and
unlimited preventive care with no cost sharing.
To help limit the preventive care liability, an employer could require employees to show proof of having non-grandfathered minimum essential coverage to be eligible for the HRP. That way, the employee receives 100% preventive care services via their own health insurance plan.
Designing a Health Reimbursement Plan is simple. Here are questions to ask as you design a Health Reimbursement Plan:
When will the HRP plan start?
What monthly healthcare allowance will we provide? Will we provide the same allowance to all employees, or offer different allowances based on employee class or family status?
What makes employees eligible for the benefit?
Who will administer the HRP?
Do we understand the compliance rules with the HRP?