Do HSAs work for sick people?
For the employee with expenses exceeding $1,200 — particularly for the high risk employee in a “bad” year with acute or chronic illness whose expenses reach their out of pocket maximum of $5,000 or more — there is another safety net called a Health Reimbursement Account (HRA). The HRA is an employer-funded line of credit for medical expenses that exceed the HSA balance but haven’t reached the out of pocket maximum. The employer pays to assist the sick or injured employee only when their health-care expenses require it. For 80-percent of employees during a given year, this credit line is not used. For 10-percent of employees, the gap in expenses to be covered by the HRA is less than $1,800. For the high risk employee, the HRA would need to cover $3,800 to protect the employee from the financial disaster of high out of pocket expenses. This amount, used by just 10-percent of employees in a typical year, still allows the employer reduced health-care costs. Overall, they enjoy much lower m
