The HRA allowance as an annual benefit that is "unlocked" on a monthly basis. Your employees' annual allowance is prorated throughout the year.
What that means is that any given month throughout the year, if they do not claim their full allowance, any unclaimed reimbursement allowance rolls over to the next month and accumulates to build up a balance of unclaimed reimbursements.
This means that if your employee has not claimed their full reimbursement in one month or more this year, they could have an accumulated allowance available to them to claim.
Let's go over some examples.
ABC Company's HRA
ABC Company is offering its employees a reimbursement of $300 per month. John Smith became eligible for ABC Company's HRA on January 1, 2020.
Here are some situations where ABC Company's Reimbursement Statement may show John is owed more than $300:
John doesn't complete onboarding to claim reimbursement for his premium until February. If John doesn't set up his premium as a recurring claim until February, then you won't see that he's owed any reimbursements on your January Reimbursement Statement. This means that his $300 allowance from January will roll over to February, so he has $600 total available to him in February to claim in reimbursement. Once he set up his premium claim, which is more than his allowance, you'll see that your Reimbursement statement in February shows he is owed $600, and then each statement after that will show he's owed $300 per month.
You are reimbursing for Premiums + Medical expenses, and John's premium is only $200.
In this scenario, John can set up his premium as a recurring claim to automatically claim $200 per month for his premium reimbursement. Each month, if he does not submit any other claims, he'll have an additional $100 in allowance that will roll over and accumulate. By June, he'll have $600 available in unclaimed allowance after he claims his June premium of $200.
If John goes to the hospital in June and gets a large bill for $1k at the ER, he can submit it through our system to claim reimbursement up to the $600 in accumulated allowance in June. (Note - here is a reminder of what happens with that $1k bill over time!)
Still not sure where to start? Check out our Admin Resource Center for more resources and support.