When HRA (health insurance reimbursement) is first set up by a company, one question is frequently asked: is there a required (or specific) time frame for employee health expenses reimbursement? Employees, likewise, frequently ask what kind of time frame they have within which to get paid for their health expenses. For the most part, deadlines for health insurance reimbursement are HRA plan document defined.
Reimbursement for a Plan’s Normal Lifespan
To qualify for tax advantages, an HRA needs formal plan documents. They set forth the deadline for health insurance reimbursement (in addition to additional requirements). Frequently, within 90 days of approval, companies must reimburse an expense. A “benefit year” is the time that businesses set up for their plans to run. Included in the plan documents is this date range.
Typically, 12 months equals one benefit year; but, depending on how the HRA is set up by the business, it can be longer or shorter. For instance, the first benefit year may be set up by a company to stretch from August through December. Subsequent years, however, could stretch from January to December.
90 Day Runout Period
Sometimes, however, an employee’s expenses must be reimbursed by a company even after they are no longer eligible for benefits (or, after the plan ends, during the run out period). After an employee loses plan eligibility or a benefit year ends, expenses for reimbursement can be submitted within 90 more days. (Plan loss by an employee could happen if they no longer qualify, are fired, or leave the company.) The expense must have been incurred by the employee during the time when it was approval eligible; or incurred during the benefit year (in order to qualify).
A grace period for reimbursements must be allowed by the company, dependent upon the plan documents. For instance, employees may be given a 90 day runout period during which expenses can still be submitted because the company extended the deadline for health insurance reimbursement by 90 days in excess of the benefit year.
Employee Deadlines for Submission
When submitting for reimbursement, how long can an employee wait? Deadlines for health insurance reimbursement are spelled out by the plan document. Frequently, however, at any point during the benefit year expenses can be submitted by the employee.
Example: a benefit year runs from January to December. Expenses can be submitted all the way through the end of December. There’s a possibility that if a runout period is included in the plan, expenses can be submitted for yet another 90 days.
Whatever information needs to be submitted along with an expense is also specified in the plan document. This can be any form of documentation such as an explanation of benefits, an invoice, or something else. Best practice, however, is for expenses to be submitted shortly after an employee incurs them. An employee could lose out on the deadline for health insurance reimbursement if they wait too long after the end of the year.
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