Which of the following is a plan that is funded solely by employers and gives you a pool of money to spend on health care?
Question
Which of the following is a plan that is funded solely by employers and gives you a pool of money to spend on health care?
Solution
The plan that is funded solely by employers and gives you a pool of money to spend on health care is known as a Health Reimbursement Arrangement (HRA). Here are the steps to understand this:
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Employer-funded plans: These are health care plans where the employer is the sole contributor. They set aside a specific amount of money for employees' health care costs.
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Health Reimbursement Arrangements (HRAs): This is a type of employer-funded plan. In an HRA, the employer allocates a certain amount of money for each employee. The employee can then use this money to pay for eligible health care expenses.
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Use of HRA funds: The funds in an HRA can be used for a variety of health care expenses. This can include things like deductibles, copayments, and coinsurance. However, the specific expenses that can be reimbursed are determined by the employer.
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Benefits of HRAs: One of the main benefits of an HRA is that the funds are tax-free for the employee. This means that they can be used to pay for health care expenses without any additional tax burden.
So, the answer to your question is a Health Reimbursement Arrangement
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