BPA HRA ADMINISTRATION

Commonly referred to as a Health Reimbursement Arrangement, BPA HRA is an employer-paid reimbursement program for health care benefits. It allows employers to annually set aside a specific amount of money for employees to pay for health care expenses as defined by the plan. All employer contributions to the Plan are tax deductible to the employer, and tax-free to the employee.

With this plan, employers can switch to a less costly, high-deductible insurance plan. The amount of money saved by reduced premiums is used to fund the BPA HRA account, which reimburses the employee for out-of-pocket health care expenses.

For the employee, choice is maintained and he or she is free to search for the best and most efficient health care. For the employer, BPA HRA offers the ability to pay only for the services that are actually used.

How will your company benefit from BPA HRA?

BPA HRA offers employers and employees a win-win situation when it comes to saving money. By offering BPA HRA, employers are able to realize a number of benefits, including:

• Savings. By adjusting their health insurance coverage, implementation of an HRA can generate a savings in overall health benefits for the employer.
• Better Consumers. One key solution to the rising costs of health care is to put more choices in the hands of the consumers. By doing this, employees search for the most effective and cost efficient care.
• Improved Employee Morale. The employer's expenditures for health care are visible and clear to employees.
• Recruit and Retain Quality Employees. An employer is viewed in a positive light by current and prospective employees because the benefit package is being provided with the employees' interests in mind.

How will your employees benefit from BPA HRA?

• The Plan is 100% employer paid.
• All contributions to the Plan are received tax free by the employee.
• Employees have more control over their health care choices and become better health care consumers, saving everyone money.
• More choices and more flexibility. You can customize the Plan according to employee needs. Unused dollars can be carried over from year-to-year (dependent upon Plan design.)

                                                   Benefit Plan Administrators, Inc.
                                                HRA/Consumer Driven Health Plan



The employer purchases a high deductible catastrophic health plan, reducing their traditional health premiums by as much as 25-30%. There is no statutory plan design.

The employer redirects all or a portion of the premium savings into notional HRA accounts for individuals and/or families. There is no minimum or maximum HRA amount. The employee is able to rollover, tax free, any unused HRA balances, which may be used for future expenses. For example, if the employee starts with $1,000 in their HRA and incurs no expenses, they may rollover $1,000 to next year and start next year with $2,000 in their HRA. While an HRA is generally not portable, portability, vesting and investment options may be incorporated into the plan by generous employers.

The HRA accounts are notional to the extent that the money always stays on the balance sheet of the employer, until claims are presented for payment. HRA accounts are owned by the employer unless the employer develops a vesting schedule.

Employees are free to use the HRA funds in "their" account for medical expenses not covered under the high deductible health plan. These are normally routine and preventive expenses.

Eligible expenses are defined under IRS Code Section 213 (d), but in most instances, expenses are limited to those defined as eligible under the Plan Document. If expenses exceed the amount available in the HRA, excess eligible expenses are paid under the high deductible health plan.

The employee is able to rollover, tax free, any unused HRA balances, which may be used for future expenses. For example, if the employee starts with $1,000 in their HRA and incurs no expenses, they may rollover $1,000 to next year and start next year with $2,000 in their HRA.

The "use it or keep it" process generally leads to more informed purchasing of medical services by a plan participant. While an HRA is generally not portable, portability, vesting and investment options may be incorporated into the plan by generous employers.

Benefit Plan Administrators administers HRA accounts for health plans that are administered by Benefit Plan Administrators and in conjunction with other high deductible health plans. There are Consumer Guides located at www.bpatpa.com whick will assist employees in making wise health decisions with their HRA dollars.