Cons of a Health Reimbursement Account

Health reimbursement accounts are health care accounts set up by an employer for his employees. These HRAs can only be funded by the employer, but are often seen as a good, cost-effective route that employers can take to provide coverage while still saving the company income over more traditional plans.

Employers Control Plans

• One con of a Health Reimbursement Account is that the employers have full control of the plan. They have the right to cover or not cover anything they feel like, and employers can also change an HRA at anytime, meaning there is not a lot of security for the employees enrolled in the plan.

Lack Legal Funding Obligations

• Another con of an HRA is that there is a lack of legal obligations for the employer to make good on these accounts when the actual reimbursement time comes due. As of 2010, the Department of Labor does not have any penalties for employers who do not follow through with their promises to fund a Health Reimbursement Account. This means that any time when a bill is submitted for reimbursement, the company is not legally obligated to pay it even with an HRA in place.

Legal Dirty Tricks

• Another con of an HRA involves companies that take advantage of the lack of legal obligation. According to the Benefits Express website, reports exist of programs being changed right before a reimbursement was due, of terms of benefits changing in the interest of the employer and not the employee or of individuals losing all their coverage by being reduced to part-time hours. While these are not major issues with an honest company, there are many that may take advantages of these legal loopholes.