If your employee has a claim that is only partially reimbursed, in short, it means that they have used up their allowance year-to-date.
Let's break it down:
The HRA allowance is an annual benefit which is unlocked on a monthly basis and prorated for the number of months your employee has been eligible.
When the total reimbursement claims YTD are more than the total available allowance YTD, it will leave a portion of the claims "unreimbursed."
Our system will apply each month’s new allowance to the oldest claim first.
The “Reimbursed” column represents how much of a claim has been reported to you on your Reimbursement Statement. We assume you reimburse your employees after you have your statement run each month.
The sum of the "Reimbursed" column is equal to your employee's prorated allowance YTD, or at least as of the date of your last Reimbursement Statement.
We will continue to track your employee's unreimbursed claims over time and continue to apply each month's allowance to them until they are paid in full.
Here are a few examples of times when you may see this happen.
Example #1 - Employee's premium is larger than the monthly allowance
For this example, let's use the following:
You offer an HRA allowance or $400 per month
Your employee's monthly insurance premium is $600 per month
Employee sets up their recurring premium claim for $600 per month
In this case, our system will automatically create a $600 claim on your employee's behalf each month. So in January, it's easy, right? You know January's $400 allowance is applied to the $600 claim for January.
But remember, each new allowance will be applied to the oldest claim first. That means that the February $400 allowance will first be applied to the remaining balance on the January premium claim until it's reimbursed in full.
This doesn't mean that in January, you reimburse them $600, and in February you reimburse them $200. It just means that year-to-date as of February, you have reimbursed your employee will reimburse $800 total, and the $800 was applied to your employee's claims in order of their submission.
Example #2 - Your employee submits a large medical bill for reimbursement
Let's take a look at what happens an employee submits a medical bill that is larger than the monthly HRA allowance.
For this example:
You are offering an allowance or $400 per month
Your HRA went into effect January 1st
In January, your employee goes to the ER and has a $1,000 bill that they submit for reimbursement. As of January, he or she only has $400 available in reimbursement allowance. We will automatically apply the January $400 allowance to this claim, and your January Reimbursement Statement will show that your employee is owed $400. But for the rest of the month after your Reimbursement Statement runs, you'll see that it shows only $400 has been reimbursed.
Then in February, another $400 of HRA allowance will get unlocked. Even if your employee has submitted a new claim, the February allowance of $400 will get applied to the older claim first. So now January & February's $400 allowances are applied to the $1,000 hospital bill. In March the remaining balance of the ER visit will be marked as reimbursed ($200) and the additional medical expense of $132.75 that was approved previously will now be reimbursed with the available funds.
Still not sure where to start? Check out our Admin Resource Center for more resources and support.