What is the insurance, HRA?

HRA insurance question?

• I just started on a health insurance plan and I really dont understand much about it. It says I have an anual HRA allocation of $687.50, a current HRA balance of $1187.50, and then an annual bridge of $750? It also says I have traditional health insurance that starts after $1500. Can anyone explain this to me in laymans terms please? Thanks!!

• Answer:

  You have an employer sponsored Health Reimbursement Account. HRA's are used to help keep the cost of medical insurance and care lower. The HRA funds will roll over each year and if your plan allows can be spent on qualified medical expenses besides the deductible. The funds are not portable and when changing jobs the employer keeps whatever is left in the account. It sounds like your employer is contributing $687.50 into your HRA each year. If your plan is a "First Dollar” or “Standard” the employer funded HRA dollars pay for your first medical expenses. If you have a medical bill the employer funded HRA will pay for your medical care up to the amount in the account. After the HRA account is empty you pay the rest up to the deductible. Since your HRA balance is almost $1,200 it sounds like you have had this plan for almost two years, If you have a medical bill for $5,000 the HRA will be depleted first then you owe the rest up to your deductible. Which in this case is would only be $313. Once the $1,500 deductible is met the insurance plan will start paying their portion which could be 80% or 100% depending on your plan design. If you have an HRA for several years and do not use much of the money the account could build up to be enough to cover 100% of your deductible. Your numbers are not adding up but in a typical HRA bridge plan, the bridge is a confusing way of saying after your employers HRA contribution of $750 you have a $750 bridge to meet your deductible of $1,500.