An employee’s health reimbursement arrangement (HRA) account is funded solely by employer contributions. Balances within these accounts become a tax-free benefit when utilized to reimburse eligible employees for qualified out of pocket medical, dental, pharmaceutical and health insurance premium expenses.
HRA Account Creation
On October 1, 2018, balances within an employee’s hour bank were combined with whatever balance existed within their MRP account to create the HRA.
HRA account creation for newly eligible employees and/or reinstated employees on or after October 1, 2018.
An HRA account will be established for you only after 450 hours (or pro-rated if traveling) of employer contributions are received within the first or any subsequent calendar quarters after obtaining initial eligibility or reinstatement of eligibility. In other words, only employer contributions received within the first calendar quarter after obtaining initial eligibility or reinstatement of eligibility, that are in excess of 450 hours (or pro-rated if traveling) will be used in the calculation of any monies to be credited to an employees account.
HRA Account Maximums
The Trustees determine both the maximum balance that can be accrued within a journeyperson’s account as well as the amounts permissible to be rolled-over from year to year. The maximum amount an active employee is eligible to amass in their HRA account is $17,000.00.
When your HRA account is credited.
HRA accounts are credited at the same frequency in which your eligibility is credited. Meaning: the amount of excess contributions earned in a work quarter will be tallied and subsequently credited to an employee’s HRA account during the corresponding quarter of coverage.
|Work Quarter||Quarter of Coverage|
|January, February, March||July, August, September|
|April, May June||October, November, December|
|July, August, September||January, February, March|
|October, November, December||April, May June|
Please note that the middle column is deliberately left blank to emphasize the fact that there exists an administrative “lag quarter” that separates a work quarter from its corresponding quarter of coverage. Meaning: Excess contributions received in any work quarter does not get credited in the subsequent calendar quarter of coverage. Rather, it skips a quarter.
Traveling, Reciprocated Health and Benefit Contributions and your HRA account.
Reciprocated contributions received for hours worked as a traveler in another Local’s jurisdiction will be included in the HRA’s quarterly calculation of excess hours. However, participants are advised that if they work in another I.B.E.W. Local Union’s jurisdiction in which the hourly contributions are less than the hourly I.B.E.W. Local 697 Health and Benefit Plan contributions in effect at the time those hours were incurred, then should those contributions be reciprocated, then the minimum number of required hours needed to be exceeded will be pro-rated.
When this occurs, the Plan will utilize the following formula to calculate the quarterly hourly requirement needed to be exceeded before your account is credited.
450 (Hours Needed) x Local 697 Inside Journeypersons rate
the reciprocated hourly rate
= Quarterly Hours needed before your account will be credited.
For example, if you worked a calendar quarter in another I.B.E.W. Local’s jurisdiction that had a $9.50 an hour Health and Benefit Plan contribution rate, the number of hours needed to have contributions made to your Health Reimbursement Arrangement (HRA) account would be 473.
Meaning; Contributions reciprocated in excess of 473 hours will be credited to your Health Reimbursement Arrangement (HRA) account.
For this example, the formula would look like as follows:
450 x $10.00 / $9.50 = 473.68
HRA Debit Cards
Because HRAs are tax-advantage accounts, the IRS requires that all debit card transactions be validated or substantiated to confirm that the funds were used for qualified medical expenses.
In most cases, the substantiation occurs automatically at the time you use the card. However, some transactions cannot be verified automatically. When a transaction cannot be automatically substantiated, either the Plan or its third-party administrator will request that you submit a copy of the receipt or explanation of benefits of the transaction in question.
Should this occur, participants will be provided a sixty (60) day period of time from the date of the notice to submit the requested supporting documentation. During the sixty-day period your HRA card will temporarily be deactivated and will remain deactivated until such time as that documentation is submitted and deemed appropriate. For this reason, the Plan:
- A. Strongly recommends keeping the paper receipts of every debit card purchase you make. And,
- B. Reminds all participants that the “R” in “HRA” stands for reimbursement. Meaning; debit cards are not to be used for the prepayment of any out-of-pocket expense associated with any service, treatment or durable medical goods.
The issuance and use of a debit card are not a right under this Plan. Rather it is a privilege. As such, should you:
- Misuse the card or,
- Fail to submit any requested documentation during that sixty (60) day period,
- If you lose eligibility under this Plan, your HRA debit card will be deactivated. You will have sixty (60) days to submit claims for reimbursable expenses that:
- a) Were incurred while a covered participant under this Plan, and
- b) Were incurred no more than three hundred and sixty-five days prior to the date of termination of eligibility.
Your debit card will be permanently deactivated and going forward you will have to submit claims manually. Further:
HRA and Shortage of Hours
If, due to a shortage of hours, you are in danger of losing your eligibility under the Plan, and have an HRA benefit balance in an amount greater than the quarterly total of your shortage of hours, your HRA benefit balance will be automatically debited to be used to coverer the full quarterly shortage of hours so that you and your family maintain eligibility with the Plan.
The day and time that a participants HRA benefit balance will be automatically debited is solely determined by the Plan and will vary as needed to ensure that the Participants shortage of hours payment arrives on or before its due date. Further, the Plan’s automatic debit will supersede any other pending debit or HRA request.