HRA administrators for small businesses

[Guest jrodgers32]

A client of mine wants to establish an HRA for his single employee. The TPAs I've seen seem expensive for that small of an arrangement. Is anyone familiar with inexpensive ways of setting these up? Know of TPAs that can set up an inexpensive HRA for this situation?

[Guest cuazman]

A client of mine wants to establish an HRA for his single employee. The TPAs I've seen seem expensive for that small of an arrangement. Is anyone familiar with inexpensive ways of setting these up? Know of TPAs that can set up an inexpensive HRA for this situation?

This is a good question. As a small business owner, I want to setup a HRA for my employees (2) and would like to know if I'm able to self- administrate this account? I thought I had read somewhere that I would need third party verification of expenses. Any help?

[Guest TXCafe]

I know basically nothing about HRAs but I feel pretty safe in telling you that when you see third party verification of documentation is required, the third party means someone besides the participant/employee and the provider of the service. So if you self-administered the plan, you would be the third party. It's basically so the employee can't just say whatever he/she wants is eligible for reimbursement...somebody has to check him/her. Hope that helps a little bit anyway.

[leevena]

Being a smaller sized employer, say under 10, is difficult situation. The costs for administration of a HRA plan tend to be relatively high compared to the cost of the actual plan. A couple of thoughts/comments.

An owner/company can self administer an HRA. The downside is you need to make sure you do it correctly, such as adjudicate claims, construct the benefit design, identify which expenses would be covered, issue the correct documents, etc. There is no need for a 3rd party verification. So the question I would ask the owner/company is "do you know what is required and can you do it properly"? Usually the answer is no.

Since I do not know any of the particulars for either of these groups ( the 1 person group and the 2 person group) you might want to consider a HSA instead. There are pros and cons about this approach also.

Good luck.