1. Consumer-Driven Health Plans
Health Reimbursement Arrangements (HRA’s)
Flexible Spending Accounts (FSA’s)

2. Health Reimbursement Arrangement
HRA

3. Why HRA?
HRAs are a way for employers to give their employees freedom of choice in healthcare planning while controlling their own costs.
HRAs are similar to Flexible Spending Accounts (FSA) except that the employees do not lose their money at the end of the year. Unused dollars may be rolled-over into the next year.

4. Why HRA?
HRAs permit the employee to accumulate money for future healthcare needs.
HRAs allow employers to offer a high deductible plan and allocate the savings to the HRA for future employee-directed healthcare.
HRAs empower employees to make prudent healthcare decisions regarding the quantity, and quality of services that are deemed medically necessary.

5. The HRA Strategy
Employer sets an equal amount of the HRA for each employee
The employee can accumulate the unused amount from year to year
The employee now has “ownership” in making healthcare decisions
The HRA is a “Consumer-Driven” healthcare strategy designed to help manage Plan utilization

6. HRA Dollars Apply Toward:
HRA dollars only apply toward Major Medical Plan Deductibles
($1,000 individual / $2,000 family)

7. HRA Dollars Do Not Apply Toward:
Office Visit Co-Pays
Prescription Drug Co-Pays
Major Medical Co-Insurance
Out-of-Pocket Dental Expenses
Vision

8. Health Reimbursement Arrangement Single Employee Coverage
$250
Employee
Deductible

9. Health Reimbursement Arrangement Single Employee Coverage
$250
Employee
Deductible
$600 HRA
Employer
Dollars

10. Health Reimbursement Arrangement Single Employee Coverage
$250
Employee
Deductible
Employee Risk: $ 400
Employer Risk: $ 600
$600 HRA
Employer
Dollars
$150
Exposure
Major Medical Plan Deductible: $1,000

11. Health Reimbursement Arrangement Employee & Family Coverage
$500
Family
Deductible

12. Health Reimbursement Arrangement Employee & Family Coverage
$500
Family
Deductible
$1,200 HRA
Employer
Dollars

13. Health Reimbursement Arrangement Employee & Family Coverage
$500
Family
Deductible
Employee Risk: $ 800
Employer Risk: $1,200
$1,200 HRA
Employer
Dollars
$300
Exposure
Major Medical Plan Deductible: $2,000

14. Example of Office Visit:
Ear or Sinus Infection:
Office Co Pay: $ 30
Total Office Visit Charge: $ 75
Employee Pays Office Co Pay: $ 30
Insurance Plan pays balance of Office Visit: $ 45

15. Example of Office Visit with Preventive Services:
Preventive Routine Annual Checkup:
Office Co Pay: $ 30
Physician Office Visit Charge: $ 75
Lab, X-Ray and Diagnostic Testing: $300
Total Office Visit, Lab, X-Ray & Testing Charge: $375
Employee Pays Office Co Pay: $ 30
Insurance Plan pays balance: $345

16. Example of Office Visit with Medical Condition:
Diagnosis of High Blood Pressure:
Office Co Pay: $ 30
Total Office Visit Charge: $ 75
Insurance Plan pays balance of Office Visit: $ 45 Lab, X-Ray & Diagnostic Testing: $500 Applied to Deductible (Employee-Paid): $500
Employee receives Explanation of Benefits from Insurance Plan: $500 applied to employee’s $1,000 Annual Deductible. Employee forwards Explanation of Benefits to MediFlex. $250 is applied to HRA Deductible. Employee receives $250 HRA reimbursement check.

17. Example of $15,000 Medical Claim (Single Deductible)
Balance
Claim Amount: $15,000
Employee HRA Deductible: $ $14,750
Plan HRA Reimbursement: $ $14,150
Employee Balance (to $1,000 Maj. Medical): $ $14,000
Major Medical Coinsurance Plan –
Plan pays 80% (of next $10,000): $8,000 $ 6,000
Employee Pays 20% (of next $10,000): $2,000 $ 4,000
Plan Pays 100% of Claim Balance: $4,000 $
Employee Total Out-of-Pocket: $ 2,400
Plan Total Paid: $12,600

18. Example of $150,000 Medical Claim (Single Deductible)
Balance
Claim Amount: $150,000
Employee HRA Deductible: $ $149,750
Plan HRA Reimbursement: $ $149,150
Employee Balance (to $1,000 Maj. Medical): $ $149,000
Major Medical Coinsurance Plan –
Plan pays 80% (of next $10,000): $8,000 $141,000
Employee Pays 20% (of next $10,000): $2,000 $139,000
Plan Pays 100% of Claim Balance: $139,000 $
Employee Total Out-of-Pocket: $ 2,400
Plan Total Paid: $147,600

19. Health Reimbursement Arrangement Process
Employee sees Medical Provider for Services. Provider’s office sends claim to Insurance Claim Administrator. 1
Provider’s Office

20. Health Reimbursement Arrangement Process
Employee sees Medical Provider for Services. Provider’s office sends claim to Insurance Claim Administrator.
Insurance Claim Administrator adjudicates claim and sends the Employee an Explanation of Benefits to their home. 1 2
Provider’s Office
Claim Administrator
Providers Office
Explanation Of
Benefits

21. Health Reimbursement Arrangement Process
Employee sees Medical Provider for Services. Provider’s office sends claim to Insurance Claim Administrator.
Insurance Claim Administrator adjudicates claim and sends the Employee an Explanation of Benefits to their home.
Employee receives the Insurance Claim Administrator’s Explanation of Benefits and forwards it to MediFlex in their MediFlex envelope. 1 2 3
Provider’s Office
Claim Administrator
Providers Office
Send to MediFlex
Explanation Of
Benefits

22. Health Reimbursement Arrangement Process
Employee sees Medical Provider for Services. Provider’s office sends claim to Insurance Claim Administrator.
Insurance Claim Administrator adjudicates claim and sends the Employee an Explanation of Benefits to their home.
Employee receives the Insurance Claim Administrator’s Explanation of Benefits and forwards it to MediFlex in their MediFlex envelope. 1 2 3
Provider’s Office
Claim Administrator
Providers Office
Send to MediFlex
Explanation Of
Benefits
The MediFlex Administrator adjusts the Explanation of Benefits for the deductible difference and sends a new MediFlex Explanation of Benefits Report to the employee and the employer. 4
MediFlex

23. Health Reimbursement Arrangement Process
Employee sees Medical Provider for Services. Provider’s office sends claim to Insurance Claim Administrator.
Insurance Claim Administrator adjudicates claim and sends the Employee an Explanation of Benefits to their home.
Employee receives the Insurance Claim Administrator’s Explanation of Benefits and forwards it to MediFlex in their MediFlex envelope. 1 2 3
Provider’s Office
Claim Administrator
Providers Office
Send to MediFlex
Explanation Of
Benefits
The MediFlex Administrator adjusts the Explanation of Benefits for the deductible difference and sends a new MediFlex Explanation of Benefits Report to the employee and the employer. 4
The MediFlex Administrator drafts a reimbursement check to the employee based on the MediFlex report amount. 5
Employer Drafts Check
MediFlex

24. Health Reimbursement Arrangement Process Employee receives Check
Employee sees Medical Provider for Services. Provider’s office sends claim to Insurance Claim Administrator.
Insurance Claim Administrator adjudicates claim and sends the Employee an Explanation of Benefits to their home.
Employee receives the Insurance Claim Administrator’s Explanation of Benefits and forwards it to MediFlex in their MediFlex envelope. 1 2 3
Provider’s Office
Claim Administrator
Providers Office
Send to MediFlex
Explanation Of
Benefits
The MediFlex Administrator adjusts the Explanation of Benefits for the deductible difference and sends a new MediFlex Explanation of Benefits Report to the employee and the employer. 4
The MediFlex Administrator drafts a reimbursement check to the employee based on the MediFlex report amount.
Employee deposits the check and pays the Provider upon receipt of the Provider’s bill. 5 6
Employer Drafts Check
Employee receives Check
MediFlex

25. Flexible Spending Account
FSA

26. How the Flex Spending Plan Works for the Employee:
Without Section 125
With Section 125
Net Effect on Pay:
$149

27. Making Informed Healthcare Decisions
Ask your Doctor:
Find out which over-the-counter products to consider before your doctor prescribes costly prescription drugs
Determine whether or not “generic” prescriptions are available vs. more expensive “brand” drugs
If you are unsure of your physician’s recommendation, seek other qualified opinions

28. End of Presentation