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Save Money on Healthcare with a Heath Reimbursement Arrangement!

Employers are turning to the new Consumer Driven Health Plans (CDHPs), which allow employees to choose between multiple health plans supplying different levels of benefits. This choice gives the employees more control over both the level and cost of their healthcare.

A crucial component of the CDHP is the Health Reimbursement Arrangement (HRA). For instance, a properly designed HRA encourages the employees to conserve healthcare costs by allowing unused employer contributions to be rolled over to be used in future years or at retirement.

We all agree that healthcare costs are out of control.

• Employers are paying too much
• Employees are not getting enough value
• Healthcare Providers have already reduced their fees as much as they can

The rising healthcare costs are affecting everyone and everyone wants the problem fixed now. However, what is the problem, and how do we fix it? The answer is that there is no one thing that is causing the spiraling costs; it is a combination of factors. Only by identifying the factors and tackling them one at a time can we begin to gain control of healthcare costs.

A primary factor is that employees have lost touch with the cost of healthcare. They go to the doctor, pay their co-pay, and get treated. The remaining costs are filed through the insurance plan provided by their employer. If the insurance doesn't cover it all, the employee pays the remainder, either out-of-pocket or out of their § 125 Health FSA.