DataPath and HRAs

Shortly after IRS issued guidance on HRAs in 2002, benefit consultants and TPAs started getting calls from employers. In the beginning, the employers were asking about that “new kind of FSA with rollovers” where they could provide employees with funds for such things as vision and dental expenses, prescription drugs, and wellness benefits. The calls are still coming, but now the employers are wanting complex HRA arrangements—sometimes plan designs that the benefit consultants and TPAs hadn’t considered.

When this interest in HRAs began, DataPath was already ahead of the game. We had been in the Defined Contribution market since 1996 when we released Max105, designed for use by Personally Producing General Agents (PPGAs). With Max105, the PPGAs could offer employers the ability to purchase high deductible health coverage (HDHC) for the employees and to self-insure the difference between their current insurance and the HDHC. The employees would have the same coverage as before while the employer would save money overall.

As soon as the IRS gave sanction to HRAs, DataPath formed an HRA team covering the market demand, pertinent HRA regulations, and programming design. The purpose of this team was to create an HRA administrative system which could administer both a simple stand-alone HRA and a cutting-edge health reimbursement arrangement offering multiple HRAs—all of which could be administered easily and efficiently.

With this team, extensive research, and our previous Defined Contribution experience, DataPath 105-HRA was developed, offering the flexibility needed to administer all types of Health Reimbursement Arrangements. We also included a proposal system illustrating the various plan types available and the cost-savings of each design to make it easier to show employers the cost-saving possibility of HRAs.

DataPath 105-HRA administers Health Reimbursement Arrangements with one or more underlying HRAs. The features below are just examples of the flexibility of DataPath 105-HRA. For more details, see our website for explanation of HRAs and DataPath 105-HRA features.

• The HRAs under an arrangement can be either stand-alone, linked, or a combination of both.
• Any carry-over can be limited to a percentage of unused funds or a stated amount. A cap can also be placed on the accumulated carry-over.
• If a spend-down option is offered, it can also be limited to a percentage of unused funds or a stated amount.
• Co-pays, co-insurance, and tiers can be set for each HRA.
• Employer contributions can be accrued monthly to lessen employer risk.

The same HRA team (covering market demand, pertinent HRA regulations, and programming design) came together again to develop the plan documents. The team's goals were (1) to have one Plan Document and one SPD which would handle any type of Health Reimbursement Arrangement and (2) to ensure that the plan documents and DataPath 105-HRA correlated. Once we decided what the documents should contain, we turned it over to the attorneys to create the documents.

After much discussion among ourselves and with the attorney, we accomplished our goals. The documents are as follows:

Plan Document

• Establishes Health Spending Arrangement with one or more underlying Health Reimbursement Accounts (HRAs)
• Complies with ERISA, COBRA, HIPAA, USERRA, and other pertinent regulations.
• Appendix: Summary Plan Description with appended Adoption Agreement.

Summary Plan Description (SPD)

• Informational document for employees.
• Contains detailed criteria for meeting government regulations
• Appendix: Adoption Agreement

Adoption Agreement

• Signatory Document adopting the Plan
• Holds variables applying to Arrangement and to underlying HRAs
• Incorporates system-generated report detailing each HRA.

With DataPath 105-HRA, you can give your clients what they want—single stand-alone HRAs or complex multi-HRA Health Spending Arrangements with linked HDHC policies. Plus we have the following related products and services you can offer your clients:

      myRSC.com:  Web Portal:  Resource Service Center

      myResourceCard^®:  The Financial Vehicle of Choice

      E.F.T.S.  Electronic Funds Transfer Service (Direct Deposit

      DataPath COBRA:  Cobra Administration System

Call us at 1-800-633-3831 or email us today, and join the HRA world!

In This Issue

Marketing in These Changing Times
myResourceCard^®  Status Report
DataPath COBRA:  Status Report
HIPAA Privacy Packet Coming!
IRS Documents, Publications, and Links