Although advantages of HRAs and HSAs can be substantial, employers will want to do their homework prior to setting them up. Effective implementation will require a clear understanding of consumer directed healthcare plan that best fits your organization as well as administrative requirements. Employee education will be essential. Companies will also need to look into how creation of a HSA or HRA may affect their HIPAA medical privacy compliance requirements.

Just like most endeavors, successful implementation of a HSA or HRA will greatly depend on how much research your organization does on pro’s and con’s of each alternative. The type of consumer directed health plan that best fits your company will depend on a combination of your corporate structure as well as overall objectives of your group health insurance plan.

Although consumer directed healthcare plans are becoming very familiar to human resource managers and other benefit professionals, remember that your employees and their dependents will need a substantial amount of education and communication.