How is the HRA funded when a new employee is hired?
When a new employee becomes eligible for coverage, we (as the administrator of the HRA) will allocate the prorated amount to the employee’s HRA fund for application to future medical claims. Since employers pay only for what their employees use (up to the total allocation amount), there is no requirement to advance funds at the time of hire. Groups under 200 have monthly prorated allocations for newly eligible members. The amount is based on the number of months left in the plan year. Groups of at least 200 have the option of monthly, quarterly or no proration (a full year’s funding regardless when they start).
