HRA Administration Services in Phoenix, AZ
Tax-Advantaged Health Reimbursement Solutions for Every Business Size
HRA Administration from Cafe Health transforms how employers provide health benefits through tax-advantaged Health Reimbursement Arrangements that offer flexibility, cost control, and exceptional employee value. As a specialized benefits administrator serving employers nationwide from Phoenix, Arizona, we manage the complete lifecycle of HRA programs including QSEHRA for small businesses, GCHRA for group health plan supplementation, EBHRA for excepted benefits, and retiree HRAs for post-employment coverage. Health Reimbursement Arrangements allow employers to reimburse employees tax-free for qualified medical expenses and, depending on the HRA type, individual health insurance premiums, creating powerful alternatives or supplements to traditional group health insurance. With predictable budgets, simplified administration through our digital platform, and expert compliance management, Cafe Health makes offering HRAs effortless while delivering meaningful financial relief to your workforce through every stage of their healthcare journey.
Understanding HRA Types and Applications
Health Reimbursement Arrangements have evolved significantly since their introduction, now encompassing multiple distinct types designed for specific employer situations and objectives. Unlike Health Savings Accounts (HSAs) that employees own and fund themselves, or Flexible Spending Accounts (FSAs) with restrictive use-it-or-lose-it provisions, HRAs are entirely employer-funded and employer-controlled accounts that reimburse employees after they incur eligible medical expenses. This fundamental structure gives employers precise control over healthcare spending while providing employees tax-free access to funds for their medical needs.
QSEHRA
Qualified Small Employer HRA
Created specifically for small businesses with fewer than 50 full-time equivalent employees who don't offer group health insurance. Employees purchase their own individual health coverage and receive tax-free reimbursement up to IRS annual limits ($6,450 individual / $13,100 family for 2026).
Ideal For: Small businesses seeking affordable health benefit alternatives
GCHRA
Group Coverage HRA (Integrated HRA)
Supplements existing group health insurance plans by reimbursing employees for out-of-pocket expenses like deductibles, copays, and coinsurance. Must be offered alongside group coverage, making high-deductible health plans more attractive and manageable for employees.
Ideal For: Employers with group plans wanting to reduce employee out-of-pocket costs
EBHRA
Excepted Benefit HRA
Provides reimbursement for excepted benefits including dental, vision, short-term coverage, and other specified expenses. Must be offered with group insurance but employees don't need to enroll. Annual contribution limit of $2,200 (2026).
Ideal For: Supplementing group plans with additional dental/vision coverage
The Strategic Advantages of HRA Programs
Implementing an HRA through Cafe Health delivers compelling benefits for both employers and employees. For Phoenix-area businesses navigating the challenging healthcare landscape, HRAs provide budget certainty that traditional group insurance cannot match. Employers set fixed monthly allowances based on their financial capacity, eliminating the surprise of double-digit annual premium increases that plague conventional group plans. You only pay for the medical expenses your employees actually incur, and any unused allowance remains with your organization rather than being forfeited to insurance carriers.
Predictable Costs
Establish fixed monthly allowances aligned with your budget. Unlike group insurance with unpredictable renewal increases, HRAs provide complete cost certainty and control over your healthcare investment
Tax Advantages
Employer contributions are tax-deductible business expenses, and employee reimbursements are tax-free when structured correctly. Both parties save on payroll taxes, creating mutual financial benefits.
Administrative Simplicity
Eliminate complex carrier negotiations, enrollment meetings, and participation requirements. Cafe Health's platform automates reimbursement processing, expense substantiation, and compliance documentation seamlessly.
Employee Flexibility
For QSEHRA and ICHRA, employees choose individual health plans matching their specific needs, doctors, and medications rather than being forced into one-size-fits-all group coverage options.
From an employee perspective, HRAs deliver meaningful financial relief and healthcare choice. Employees with QSEHRAs or ICHRAs gain the freedom to select individual insurance plans that cover their preferred healthcare providers, include their necessary medications, and match their family's specific medical needs. For employees covered under GCHRAs, the employer reimbursement substantially reduces their out-of-pocket burden when facing high deductibles or ongoing medical expenses. All HRA reimbursements arrive tax-free, maximizing the value of every healthcare dollar while providing access to the wide range of medical services listed in IRS Publication 502.
Comprehensive HRA Administration Services
Cafe Health manages every operational aspect of your HRA program from initial design through ongoing daily administration and annual renewals. Our comprehensive service approach ensures your HRA delivers maximum value while maintaining rigorous IRS compliance and minimizing administrative burden on your HR team. We begin by assessing your current benefits situation, workforce demographics, budget parameters, and strategic objectives to recommend the optimal HRA type and structure for your specific circumstances.
Program Design and Implementation
Our benefits consultants work closely with your leadership to architect an HRA that aligns with organizational goals and employee needs. We determine appropriate allowance levels based on industry benchmarks and local healthcare costs in Phoenix and your other locations, establish eligibility criteria that comply with non-discrimination rules, create comprehensive plan documents that satisfy IRS requirements, and develop clear communication materials that help employees understand their new benefit. Whether you're transitioning from traditional group coverage to QSEHRA, adding GCHRA supplementation to offset high deductibles, or implementing EBHRA for dental and vision, we manage the complete setup process with minimal disruption to your operations.
Implementation includes technical integration with your payroll systems and HRIS platforms to automate data flows and eliminate manual processes. Cafe Health's platform connects seamlessly with major payroll providers to receive employee demographic updates, process reimbursements through payroll, and generate tax reporting automatically. We also provide employees secure access to our mobile-friendly portal where they can submit claims, upload documentation, track reimbursement status, and access educational resources about eligible expenses and proper substantiation requirements.
Ongoing Administration and Compliance Management
Once your HRA launches, Cafe Health handles all day-to-day operations including claim processing, expense substantiation, eligibility verification, and compliance monitoring. Employees submit reimbursement requests through our digital platform by uploading receipts and expense documentation. Our team reviews each claim against IRS Publication 502 guidelines and your plan document restrictions to ensure compliance before approving reimbursements. We verify that QSEHRA participants maintain minimum essential coverage as required by law and track GCHRA eligibility to confirm employees remain enrolled in your group health plan.
Compliance extends beyond individual claims to encompass broader regulatory requirements including non-discrimination testing, annual contribution limit tracking for QSEHRAs and EBHRAs, and integration with ACA reporting obligations. Cafe Health generates all necessary year-end tax documentation including Form 1095-B or 1095-C reporting for applicable HRAs, providing both employers and employees the information needed for accurate tax filing. Our proactive compliance monitoring alerts you to regulatory changes that might impact your HRA design, ensuring your program remains compliant as healthcare laws evolve. For organizations managing multiple benefit programs, our HRA administration integrates seamlessly with ICHRA Administration and HRA/HSA/FSA Management services for unified benefits oversight.
HRA Integration with Broader Benefits Strategy
Health Reimbursement Arrangements deliver maximum impact when strategically coordinated with your complete employee benefits portfolio. Cafe Health specializes in creating cohesive benefits ecosystems where HRAs complement your health insurance, retirement plans, wellness programs, and other offerings to form a compelling total rewards package. For employers with high-deductible health plans, pairing group coverage with a GCHRA transforms what employees perceive as inadequate benefits into valuable, comprehensive protection that covers both insurance premiums and out-of-pocket costs.
We also help navigate complex benefit interactions such as coordinating HRAs with Health Savings Accounts, where specific rules govern which HRA types can coexist with HSA eligibility. Our expertise ensures you structure benefits correctly to preserve tax advantages across all programs while avoiding prohibited combinations that could trigger IRS penalties or disqualify employees from valuable tax savings. When combined with our Cafeteria Plan Setup, COBRA Administration, and Compliance Review & Reporting services, you gain a fully integrated benefits administration solution that simplifies management, reduces vendor complexity, and enhances the employee experience through unified access and communication.
Why Phoenix Employers Trust Cafe Health for HRA Administration
Based in Phoenix's thriving business community, Cafe Health brings local market knowledge combined with nationwide HRA administration expertise. We understand the unique challenges Arizona employers face from seasonal workforce fluctuations to multi-state operations, and we design HRA solutions that accommodate these complexities while maintaining straightforward administration. Our Phoenix team has successfully implemented hundreds of HRA programs across industries ranging from technology startups to established manufacturing companies, healthcare practices to professional services firms.
What distinguishes Cafe Health is our unwavering commitment to responsive, personalized service that reflects our belief benefits administration should support your business growth rather than consuming your HR team's limited time. When employees have questions about eligible expenses or need help submitting claims, they reach real benefits experts who provide immediate, knowledgeable assistance through our 24/7 support channels. When your HR team needs strategic guidance about HRA design changes or compliance requirements, we deliver expert consultation promptly without ticket systems or tiered support structures. This service excellence, combined with our sophisticated technology platform and satisfaction money-back guarantee, makes Cafe Health the trusted HRA administration partner for forward-thinking employers who demand more from their benefits providers.
Frequently Asked Questions About HRA Administration
What is an HRA and how does it differ from an HSA or FSA?
A Health Reimbursement Arrangement (HRA) is an employer-funded account that reimburses employees tax-free for qualified medical expenses. Unlike HSAs that employees own and fund with their own contributions, HRAs are entirely employer-funded and employer-owned. FSAs allow employee contributions but have strict use-it-or-lose-it rules, while HRAs can roll over unused funds at employer discretion. HRA reimbursements happen after employees incur expenses, unlike pre-funded HSAs or FSAs, giving employers predictable cost control.
Which type of HRA is right for my company size and situation?
QSEHRA works for small businesses under 50 employees without group insurance, allowing reimbursement for individual health premiums with IRS annual limits. GCHRA (integrated HRA) supplements existing group health plans for any size employer, reimbursing out-of-pocket costs like deductibles. EBHRA provides additional coverage for dental, vision, and excepted benefits alongside group plans. ICHRA offers maximum flexibility for any size employer, allowing different allowances by employee class. Cafe Health consultants help identify the optimal HRA structure for your specific workforce and budget.
What medical expenses qualify for tax-free HRA reimbursement?
HRAs can reimburse expenses listed in IRS Publication 502 including doctor visits, prescriptions, dental care, vision care, mental health services, medical equipment, and preventive care. Depending on HRA type, individual health insurance premiums may qualify. QSEHRA and ICHRA reimburse premiums, while GCHRA and EBHRA cannot. Employers may further restrict eligible expenses within their plan documents. Over-the-counter medications, certain wellness items with medical necessity letters, and dependent care qualify under expanded CARES Act provisions.
How does Cafe Health ensure IRS compliance for HRA administration?
Cafe Health maintains expert knowledge of IRS Section 105 regulations, ACA integration requirements, and annual contribution limits. Our platform automatically verifies employee eligibility, substantiates expenses with proper documentation, tracks minimum essential coverage requirements for QSEHRA participants, and generates compliant year-end tax reporting including Form 1095-B/C. We monitor regulatory updates continuously and adjust your plan administration proactively to maintain full compliance, protecting you from IRS penalties and ensuring all reimbursements qualify for tax-free treatment.
Can employees carry over unused HRA funds to the next year?
HRA rollover policies are employer-determined and vary by HRA type. Employers can allow unlimited rollovers, set rollover caps, or implement use-it-or-lose-it provisions. Unlike employee-owned HSAs, unused HRA funds remain with the employer when employment ends, though
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