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Health Reimbursement Arrangements (HRAs)

Description: This quiz will test your knowledge on Health Reimbursement Arrangements (HRAs).
Number of Questions: 14
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Tags: healthcare financing health reimbursement arrangements hras
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What is a Health Reimbursement Arrangement (HRA)?

  1. A type of health insurance plan

  2. A tax-advantaged account used to reimburse employees for qualified medical expenses

  3. A government program that provides health insurance to low-income individuals

  4. A type of savings account that can be used to pay for medical expenses


Correct Option: B
Explanation:

A Health Reimbursement Arrangement (HRA) is a tax-advantaged account that employers can offer to their employees to help them pay for qualified medical expenses. HRAs are funded by employer contributions and can be used to reimburse employees for a variety of expenses, including deductibles, copayments, and coinsurance.

Who is eligible for an HRA?

  1. All employees

  2. Only employees who are enrolled in a group health insurance plan

  3. Only employees who have a high deductible health insurance plan (HDHP)

  4. Only employees who are self-employed


Correct Option: C
Explanation:

To be eligible for an HRA, employees must be enrolled in a high deductible health insurance plan (HDHP). An HDHP is a health insurance plan with a deductible of at least $1,400 for individuals and $2,800 for families.

What are the contribution limits for HRAs?

  1. $3,650 for individuals and $7,300 for families

  2. $5,000 for individuals and $10,000 for families

  3. $7,000 for individuals and $14,000 for families

  4. $10,000 for individuals and $20,000 for families


Correct Option: C
Explanation:

The contribution limits for HRAs are $7,000 for individuals and $14,000 for families in 2023.

What types of expenses can be reimbursed with an HRA?

  1. Medical expenses, dental expenses, and vision expenses

  2. Prescription drug expenses, over-the-counter drug expenses, and medical supplies

  3. Hospitalization expenses, surgery expenses, and doctor's visits

  4. All of the above


Correct Option: D
Explanation:

HRAs can be used to reimburse employees for a variety of expenses, including medical expenses, dental expenses, vision expenses, prescription drug expenses, over-the-counter drug expenses, medical supplies, hospitalization expenses, surgery expenses, and doctor's visits.

How can employees access their HRA funds?

  1. Through a debit card

  2. Through a check

  3. Through a reimbursement request form

  4. All of the above


Correct Option: D
Explanation:

Employees can access their HRA funds through a debit card, a check, or a reimbursement request form.

What are the tax advantages of HRAs?

  1. Employer contributions to HRAs are tax-deductible

  2. Employee contributions to HRAs are tax-free

  3. HRA distributions are tax-free

  4. All of the above


Correct Option: D
Explanation:

HRAs offer a number of tax advantages. Employer contributions to HRAs are tax-deductible, employee contributions to HRAs are tax-free, and HRA distributions are tax-free.

What are the disadvantages of HRAs?

  1. HRAs are only available to employees who have a high deductible health insurance plan (HDHP)

  2. HRAs have contribution limits

  3. HRAs can be complex to administer

  4. All of the above


Correct Option: D
Explanation:

HRAs have a number of disadvantages. They are only available to employees who have a high deductible health insurance plan (HDHP), they have contribution limits, and they can be complex to administer.

What is the difference between an HRA and a Flexible Spending Account (FSA)?

  1. HRAs are only available to employees who have a high deductible health insurance plan (HDHP), while FSAs are available to all employees

  2. HRAs have higher contribution limits than FSAs

  3. HRAs can be used to reimburse employees for a wider range of expenses than FSAs

  4. All of the above


Correct Option: D
Explanation:

HRAs and FSAs are both tax-advantaged accounts that can be used to reimburse employees for qualified medical expenses. However, there are a few key differences between the two accounts. HRAs are only available to employees who have a high deductible health insurance plan (HDHP), while FSAs are available to all employees. HRAs have higher contribution limits than FSAs, and HRAs can be used to reimburse employees for a wider range of expenses than FSAs.

What is the difference between an HRA and a Health Savings Account (HSA)?

  1. HRAs are funded by employer contributions, while HSAs are funded by employee contributions

  2. HRAs have higher contribution limits than HSAs

  3. HRAs can be used to reimburse employees for a wider range of expenses than HSAs

  4. All of the above


Correct Option: D
Explanation:

HRAs and HSAs are both tax-advantaged accounts that can be used to reimburse employees for qualified medical expenses. However, there are a few key differences between the two accounts. HRAs are funded by employer contributions, while HSAs are funded by employee contributions. HRAs have higher contribution limits than HSAs, and HRAs can be used to reimburse employees for a wider range of expenses than HSAs.

What are some of the recent trends in HRAs?

  1. The use of HRAs is increasing

  2. Employers are offering HRAs with higher contribution limits

  3. HRAs are being used to reimburse employees for a wider range of expenses

  4. All of the above


Correct Option: D
Explanation:

There are a number of recent trends in HRAs. The use of HRAs is increasing, employers are offering HRAs with higher contribution limits, and HRAs are being used to reimburse employees for a wider range of expenses.

What are some of the challenges facing HRAs?

  1. The complexity of administering HRAs

  2. The high cost of HRAs

  3. The lack of awareness of HRAs among employees

  4. All of the above


Correct Option: D
Explanation:

HRAs face a number of challenges, including the complexity of administering HRAs, the high cost of HRAs, and the lack of awareness of HRAs among employees.

What is the future of HRAs?

  1. The use of HRAs will continue to grow

  2. Employers will offer HRAs with even higher contribution limits

  3. HRAs will be used to reimburse employees for an even wider range of expenses

  4. All of the above


Correct Option: D
Explanation:

The future of HRAs is bright. The use of HRAs will continue to grow, employers will offer HRAs with even higher contribution limits, and HRAs will be used to reimburse employees for an even wider range of expenses.

What are some of the best practices for employers who offer HRAs?

  1. Communicate the HRA to employees clearly and effectively

  2. Make it easy for employees to access their HRA funds

  3. Offer HRAs with high contribution limits

  4. All of the above


Correct Option: D
Explanation:

There are a number of best practices for employers who offer HRAs. These include communicating the HRA to employees clearly and effectively, making it easy for employees to access their HRA funds, and offering HRAs with high contribution limits.

What are some of the best practices for employees who have HRAs?

  1. Contribute the maximum amount to their HRA

  2. Use their HRA funds to reimburse themselves for qualified medical expenses

  3. Keep track of their HRA expenses

  4. All of the above


Correct Option: D
Explanation:

There are a number of best practices for employees who have HRAs. These include contributing the maximum amount to their HRA, using their HRA funds to reimburse themselves for qualified medical expenses, and keeping track of their HRA expenses.

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