For years, Health Reimbursement Arrangements (HRAs) were one of the most underutilized tools in employer healthcare. That’s starting to change. We’re now seeing a new evolution of HRAs, and it’s reshaping how some employers think about managing healthcare costs.
Traditional HRA Use
Traditionally, HRAs were fairly simple. Employers paired them with a group health plan and used them to reimburse things like deductibles, copays, or other out-of-pocket expenses. Helpful, but limited.
Modern HRAs Drive Smarter Decisions
Today, HRAs are increasingly being designed and paired with search engines to guide employees toward more efficient care. Instead of just reimbursing expenses after the fact, some newer HRA strategies are being structured to reward smarter healthcare decisions.
Impact on Provider Selection
One area where this is becoming particularly powerful is specialist, surgeon, and facility selection. We know that the cost and quality of care can vary dramatically between providers within the same city, even within the same hospital. Two surgeons may perform the same procedure, but the outcomes, complication rates, and total cost of care can be very different.
How Employers are Leveraging HRAs
Forward-thinking employers are starting to use HRAs to help employees:
- Identify high-quality, high-efficiency care
- Compare expected total costs for procedures
- Access reimbursement incentives when choosing high-value providers
- Reduce unnecessary variation in care
HRAs as Strategic Cost-Management Tools
In other words, HRAs are evolving from a passive reimbursement tool into a strategic cost-management lever. When paired with strong provider-quality data and decision support tools, they can help employees navigate one of the hardest parts of healthcare: choosing the right doctor for the right procedure. The result?
- Employees get access to better information
- Employers reduce unnecessary healthcare spend
- Healthcare purchasing starts to function a little more like every other market
HRAs may not be new, but how they’re being used is evolving quickly. For more information about how to evaluate HRAs as an alternative to traditional medical plan structures, contact an MMA advisor.
