Using a benefits card is convenient, but paying upfront can create a paperwork headache down the line if your provider does not submit the correct code for the service you received. For example, if your provider submits a code that is not approved by your plan, BPAS will not authorize the transaction. You would then be responsible for requesting documentation from your provider and submitting it to BPAS to support your claim. Failure to do this by a certain date can lead to your card being frozen and declined the next time you use it.
What is an HRA?
An HRA, or Health Reimbursement Arrangement, is a tax-free account funded by your employer that you can use to pay for out-of-pocket medical expenses. It is not a savings or insurance program, but rather a financial reimbursement plan that covers eligible medical, vision, and prescription costs up to your deductible.
There are different types of HRAs. The type you have is a Voluntary Employees’ Beneficiary Association or VEBA HRA.
How does my VEBA HRA account work?
Your VEBA HRA is funded by contributions from your employer. The amount, frequency, and type of contributions depend on your group plan. Contributions go into your individual VEBA account at BPAS. BPAS was hired by the Trust to administer your VEBA HRA account. You can find details about your VEBA HRA account by logging into your online account. Note: You cannot make a personal contribution to your HRA.
What are the benefits of a VEBA HRA?
A VEBA HRA is a unique kind of HRA that has two main advantages. The first is that unused funds in your VEBA account roll over from year to year, which gives you the option to invest a portion of this money in the stock market and save for retirement. The other benefit is that a VEBA HRA saves you money because you pay no tax on what your employer contributes, your account earnings, or the funds you withdraw for medical claims.
What if I’m new to the job?
If you are new to the job and your HRA has not accumulated enough to cover your out-of-pocket expenses, the Trust may be able to advance you the funds, as you will accrue the money eventually.
Some members prefer to pay for their own medical expenses and use their HRA to save for retirement instead. It is up to you. Your VEBA HRA is investable, tax-free, and rolls over from year to year, so you can choose to leave your HRA alone and grow over time.
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