Rising group health premiums are pushing employers to take a fresh look at plan design. KFF reports that average employer-sponsored family premiums reached $28,303 in 2026, up 5% from the year before. At renewal, brokers and employers can look beyond the premium quote and consider how the plan’s deductible and employee cost-sharing fit together.

One strategy is to compare the current plan with a lower-premium option that has a higher deductible, then use an employer-funded Health Reimbursement Arrangement (HRA) to reimburse eligible expenses. If the premium savings allow the employer to add HRA support, the employer may be able to hold its total budget steady or reduce costs while giving employees help with out-of-pocket expenses. The right outcome depends on actual plan quotes, HRA claims, administration costs, and the plan’s carryover rules.

The HRA can Soften the Deductible Change for Employees

An HRA does not change the deductible written into the insurance policy. It can, however, reduce what an employee ultimately pays for eligible expenses when the HRA reimburses those costs, narrowing the deductible gap from the employee’s point of view. The support can make a higher-deductible plan feel more manageable and preserve meaningful value in the employer’s group health plan.

For example, an employer might select a plan with a lower premium and higher deductible, then use part of the premium difference to fund an HRA. Employees still have the plan’s stated deductible, but the HRA can reimburse eligible deductible expenses under the HRA terms. Before recommending the change, compare the premium savings with the amount the employer is willing to make available, expected claims, and possible future liabilities from carryover.

Compare More Than the Premium and Deductible

Compare the current plan with the alternative side by side. For the employer, consider premium costs together with HRA reimbursements, administration fees, and balances that may carry forward. The HRA allowance is a maximum, not a guaranteed payout: some employees may not reach the deductible or use all available HRA funds in a given year, while carryover can extend costs into future years. For employees, look at payroll contributions and likely out-of-pocket costs under realistic care scenarios, not just the deductible. Consider routine prescriptions, recurring visits, and a year with a larger medical expense. Check whether the provider network, prescription coverage, copays, coinsurance, or out-of-pocket maximum change. A lower premium can create room for HRA support, but the design should still fit the employer’s budget and the workforce’s coverage needs.

HRA Design can Match the Employer’s Goals

An HRA does not have to reimburse every eligible expense in the same way. Employers can choose which expenses to cover, when reimbursement begins, and how much support is available, subject to the plan documents and applicable rules. A few design approaches can help frame the conversation:

  • First-dollar support: The HRA can reimburse specified eligible expenses from the start of the plan year. This gives employees immediate assistance. A general-purpose HRA that reimburses medical expenses before the applicable minimum deductible is met can make an otherwise HDHP-covered employee ineligible to contribute to an HSA, subject to specific exceptions.
  • Deductible-layer support: The employer can set an allowance for eligible deductible expenses, helping employees with a defined portion of the deductible without reimbursing every dollar they may owe.
  • Tiered cost-sharing: A plan could require the employee to pay the first $1,000 of eligible costs, reimburse the next $1,000 through the HRA, and then reimburse 50% of the next $2,000 in eligible costs. In this illustration, the HRA would pay up to $2,000, subject to the written plan terms and substantiated expenses.

These are examples of how an employer might allocate support, not a one-size-fits-all recommendation. Brokers and employers can assess each design against the insurance deductible, coinsurance, out-of-pocket maximum, employee needs, employer budget, and HRA rules. Clear employee communication is essential so people understand what the HRA reimburses and what they may still owe. For more on Flyte’s HRA administration, visit our HRA page.

Post-deductible HRAs and HSA Compatibility

A post-deductible HRA can be designed to preserve an employee’s ability to contribute to an HSA when the employee is otherwise eligible. To do that, the HRA cannot reimburse medical expenses before the applicable minimum annual deductible for HSA-qualified coverage is met. The employee must also meet the other HSA eligibility rules, and the underlying group plan must qualify.

“After the plan deductible” and “after the minimum deductible required for HSA eligibility” are not always the same point. An HRA that starts reimbursing after a lower plan deductible may still make an employee ineligible to contribute to an HSA until the HSA minimum is satisfied. Employers can also choose a post-deductible design that is not intended to preserve HSA eligibility. The plan documents and reimbursement rules should state clearly when HRA payments can begin.

Technology and Administration Help Bring the Design to Life

A thoughtful design needs an administration process that employees and employers can use. Flyte supports HRA administration through plan documentation, claims review, reimbursement support, and participant service using Flight Health Account Manager.

  • EDI feeds: Flyte can accept EDI feeds from any source. Whether a carrier can provide a feed for a specific group depends on the carrier and the group. When available, the feed can support claims administration.
  • Participant tools: Employees can use Flight Health Account Manager to access their account information and submit or track eligible expenses, based on the plan’s workflow.
  • Ongoing support: Employers and brokers can work with Flyte on plan setup, reimbursement rules, employee communications, and day-to-day administration.

Questions to Consider at Renewal

  • How do the current plan and alternative compare on premiums, employee contributions, and expected out-of-pocket costs?
  • Which expenses will the HRA reimburse, when will reimbursements begin, and how will the allowance relate to the deductible and out-of-pocket maximum?
  • Does the design preserve HSA eligibility for employees who want to contribute, and can the carrier provide an EDI feed for this group?
  • How will administration fees, carryover terms, and employee communication affect the overall value?

Ready to Explore HRA Options?

Whether you are a broker advising a client or an employer reviewing your plan, Flyte can help you consider HRA design, claims administration, and participant support. Let’s talk about how an HRA could fit your group health plan.