Startup Q&A
CEO and Founder of Kruze Consulting
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We’ve recently started to see startups offer an alternative form of healthcare benefits - HRAs. An HRA, or Health Reimbursement Arrangement, is an IRS-approved employer-funded health benefit account that can be used to reimburse employees for qualified medical expenses. Importantly, employers can choose to offer an HRA as an alternative to traditional group health insurance, or as a supplemental benefit to group health insurance.
The biggest reason we’ve seen clients adopting this form of health insurance is that it’s cheaper than traditional benefits, which, honestly, are getting out of hand from an expense standpoint.
In a typical Health Reimbursement Arrangement:
We’ve only seen startups offer this through a platform, which brings up the next question:
An HRA platform fee is a health benefits related expense. These platform fees are charged by the companies that provide the software and services that employers need to administer their Health Reimbursement Arrangement plans.
These fees can cover a variety of expenses, such as:
The cost of HRA platform fees varies depending on the size and complexity of the HRA plan, as well as the features and services offered by the HRA administrator. However, HRA platform fees are typically much lower than the cost of traditional group health insurance premiums.
Remember, this alternative healthcare solution isn’t a one-size-fits-all answer, but it can offer financial predictability and flexibility that can be particularly beneficial for startups.
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