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
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 employers liability is limited and the HRA
allows benefits to remain the same.
Maintain a competitive benefit program.
Increasingly, todays 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.