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Home > Press > The HRA and Travis Systems - What We Are Doing to Help You Administer HRAs

The HRA and Travis Systems - What We Are Doing to Help You Administer HRAs

Houston, Texas October 21, 2002 - When the IRS issued guidance this past June formally allowing Health Reimbursement Arrangements (HRAs), they answered several questions about how these newly-blessed accounts may be used. However, many questions remain about the use of HRAs, particularly how they are to be administered. And while there is considerable interest about HRAs among employers, employees and in the benefits community, many groups seem to be taking a "let's wait and see" attitude.

Travis Software isn't taking a "wait and see" attitude about HRAs - we've already added an HRA Plan Document and Summary Plan Description to our TravisFlex/Doc system (for those who believe there is an ERISA requirement for an HRA Plan document/SPD) and are adding HRA administration capabilities to both Release 7.0 of TravisFlex and Release 7.0 of TravisCobra, both scheduled to be sent to customers by the end of 2002.

However, we do understand why there's a wait-and-see attitude about HRAs - there sometimes seem to be more questions than answers about these new accounts. While questions about the administration of the accounts for active employees are numerous, the questions concerning how to administer HRAs during COBRA continuation seem to outnumber the answers!

Nevertheless, we think it's important to include HRA administration capabilities in our systems because we believe their usage will inevitably grow. At this time we are programming extra features into our "HRA handling" modules of TravisFlex and TravisCobra because of the unknowns. Many of these capabilities will be in our systems initially because of differences of opinions that exist in the benefits community at this time regarding how HRAs should be administered. In the future, we may actually need to reduce the HRA administration options in the systems as more becomes known and procedures are clarified by the IRS, rather than increase those capabilities as is typically the case.

Specifics of the features we are adding to each system are described below. In cases where options are being offered for a particular capability, a brief explanation of the logic about how the options are being programmed is presented as well:

TravisFlex:
When an HRA benefit plan is set up in TravisFlex, several questions will be asked;

  1. Is the HRA "linked" to another health benefit plan? If so, what is the Plan Code?
  2. If the employee also has a Flexible Medical Spending Account (FSA), how is the "wallet management" to be handled, assuming a claimed expense is allowable under both the HRA and FSA
  3. FSA must be exhausted first before HRA? Y/N, or
  4. HRA must be exhausted first before FSA? Y/N
  5. What expenses are allowed under the HRA?
  6. All Sec. 213 Expenses (as in FSA)
  7. Specific Expenses: Only expenses applicable to insurance plan deductible, Medical, Dental, Vision, Other

If the account to be exhausted first cannot completely fund a submitted claim, should TravisFlex automatically split the claim and enter the remainder as a claim into the other account? Additionally, Discrimination Testing under Section 105 is being added to TravisFlex to properly test the HRA.

Contributions to and claims submitted against HRA's will be handled much as is currently available within TravisFlex. Both check printing and Direct Deposit will be supported, as they are for FSA claims at present. And reporting is being modified to include HRA activity, as is the TravisFlex/Web system.

TravisCobra:
The implications of properly supporting the administration of the Cobra continuation for HRAs are even more complicated than those involved with TravisFlex, because of the lack of definition of known rules for HRA continuation. As a result, some of the features being added to TravisCobra in Release 7.0 may actually have to be simplified in later releases, when more information is known about precisely how to administer HRAs during a continuation period.

Here's what is being added to TravisCobra in its Release 7.0:

  1. If an HRA account is added, TravisCobra will ask if the HRA is "bundled" (linked) with an insured/self funded Health Plan. If so, the system will ask for the carrier and plan code?
  2. The user will be asked to enter the HRA balance as of the Qualifying Event Date, if the Employer or the Employee is to make the monthly contribution during the continuation period and, if so, at what amount. Also, the user will be asked if contributions to the HRA by the Employer/Employee are contingent on the continuee's election of an insurance plan linked with the Health Plan under COBRA.
  3. A paragraph has been added to the Cobra election notice printed by TravisCobra if an HRA is one of the plans offered to the continue. The paragraph will describe the HRA and mention that it may be used to pay eligible medical expenses, Cobra or individual health premiums, and may be available after the normal Cobra election period. As always, the standard wording of this new paragraph the letter may be modified by the user.

Several transactions are also being added to TravisCobra for HRA's that have never been required in the Cobra system previously. They are:

  1. Employee paid-in contribution,
  2. Employer paid-in contribution,
  3. Claim paid, with the amount and date paid,
  4. Cobra premium paid from the HRA,
  5. Adjustment (+ or -), and Individual health premium paid from HRA.

By adding these capabilities, we are trying to put TravisCobra users in the position so that if a continuee calls and asks for the current balance of his/her HRA, the administrator will not only be able to provide the balance amount but also will be able to give the continue the transactions that resulted in that balance, by simply inquiring into the TravisCobra system.

These are not the only new features related to HRA's for the TravisCobra and TravisFlex systems, but rather highlights of those features. Release 7.0 is scheduled to be shipped to customers subscribing to the Support and Update Plan for the system(s) by the end of 2002, and we are on track for shipping in that timeframe.

If you would like more information about the changes being made to these systems for HRAs, or would like any other information about TravisCobra or TravisFlex, please call TravisMarketing at (800) 521-5409.

Contact Info:
Travis Software
Garth Williams
Vice President
(281) 496-3737