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A Guide to Health Reimbursement Plans

Frequently Asked Questions about Health Reimbursement Plans

This section answers frequently asked questions (FAQs) about Health Reimbursement Plans.

What is a Health Reimbursement Plan?

A Health Reimbursement Plan allows companies to reimburse employees tax-free for individual health insurance premiums.

How does a Health Reimbursement Plan work?Health_reimbursement_plan_questions

With a Health Reimbursement Plan:

  • The company sets monthly healthcare allowances.

  • Employees purchase their own health plan.

  • Employees submit a reimbursement request.

  • One the request is approved, the company reimburses employees for the approved expense via payroll, check, or direct deposit.

How is a Health Reimbursement Plan Structured?

A Health Reimbursement Plan is a Section 105 Self-insured Medical Reimbursement Plan. It is structured to reimburse employees for health insurance premiums up to a specified monthly healthcare allowance, and basic preventive health services as required by Public Health Services (“PHS”) Act Section 2713.

How much time does it take the company to administer a Health Reimbursement Plan?

With the right Administration Software, an HRP takes less than 5 minutes per month to administer online. Companies use the software to add approved reimbursements to payroll. There are no time-consuming annual renewals, and employees maintain a direct relationship with the insurance company of their choice.

How does a Health Reimbursement Plan work for employees?

Employees select and purchase an individual health policy that best fits their families' needs, choosing any plan, from any carrier.

Employees submit a reimbursement request for their premium expense, and are reimbursed up to the amount available in their balance. Employees can keep their same network and doctors, and pick a coverage level that fits their health needs. Individual health plans cost 20% - 60% less than traditional group plans, and tax credits may be available to qualifying employees.

Is a Health Reimbursement Plan health insurance?

No. A Health Reimbursement Plan is not health insurance. A HRP is a Self-insured Medical Reimbursement Plan, allowed by Section 105 of the IRS code.

What type of healthcare expenses are reimbursable through ZaneHealth?

Healthcare expenses that may be reimbursed through a Health Reimbursement Plan include qualified health insurance premiums and basic preventive health services.

Is there a minimum or maximum number of participants that must enroll in a Health Reimbursement Plan?

No. Companies of all sizes can use a Health Reimbursement Plan. Additionally, there are no required minimum participation requirements, and the company determines the eligibility requirements during implementation.

Additional questions on Health Reimbursement Plans? Contact us. We’d be happy to help.

How to Navigate Health Insurance