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For Employers Pay less in taxes. Pre-tax dollars directed into a HRA are not subject to Federal Income, Social Security (FICA) or federal unemployment (FUTA) taxes. HRAs allow an employer to reduce health insurance cost without reducing benefits. For example, a HRA can be used by an employer to self-insure a specific expense, eg. a hospital co-pay. Health plan costs are significantly reduced while the employer’s liability is limited and the HRA allows benefits to remain the same. Maintain a competitive benefit program. Increasingly, today’s employees view benefit options as being more valuable than conventional benefits. Many employers, especially those in highly competitive industries, have found that HRAs can help them gain an advantage in attracting and retaining valuable employees. |
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