Iowa Bankers Association Iowa Bankers Mortgage Corporation
Iowa Bankers Insurance
and Services
8800 NW 62nd Avenue
PO Box 6210
Johnston, IA 50131
Toll-Free: 800-532-1423
Fax: 515-286-4214

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105 Plan Health Reimbursement Arrangement (HRA)

105 Plan Health Reimbursement Arrangement (HRA)

A 105 Plan is an employer-sponsored, employer-funded benefit plan that you offer to your employees under Section 105(h) of the Internal Revenue Service (IRS) Code.  A 105 Plan enables you to control increasing health care costs.

How the 105 Plan Works

You purchase a higher-deductible, lower-premium group health insurance plan (the employer plan) through the Iowa Bankers Benefit Plan (IBBP) and offer your employees a plan with a lower deductible and lower out-of-pocket limit (the employee plan). You partially self-funds claims in the 105 window, which is the difference in deductible and out-of-pocket maximum between the two plans. The 105 Plan enables you to contain costs while providing your employees with the benefit of health insurance with a lower deductible and lower out-of-pocket maximum. It also enables the sharing of health care costs between you, your employees, and the health insurance company.

Note: The employer plan can also be referred to as the purchased plan or the insured plan.  The employee plan can also be referred to as the buy-down plan or the partially self-funded plan.

Benefits of the 105 Plan

Benefits to Your Employees

Benefits to You as an Employer

  • Their health insurance plan (the employee plan) has a lower deductible and out-of-pocket maximum than the plan for which the premium is paid (the employer plan).

  • Generally, reimbursements received through the 105 plan for covered medical expenses are tax-free.
  • The premium for the employer plan is lower because it has a higher deductible and out-of-pocket maximum.
  • The 105 reimbursements paid to your employees and premiums paid to the health insurance company can be deducted from taxes.

Reimbursement  from the 105 Plan

Participants do not need to submit 105 claims to IBIS. Wellmark electronically sends claim information to Iowa Bankers Insurance and Services (IBIS) once each week, and IBIS runs the 105 claim process once each week. Participants are reimbursed by direct deposit to their designated accounts on the Friday of the week in which IBIS processes their claims through the 105 Plan.

Note: An employee must complete an Employee ACH Form and submit it with a voided check to designate or change the checking or savings account to which his or her 105 reimbursements will be deposited. An employee cannot be reimbursed for a 105 claim unless this form has been submitted to IBIS.

Forms, Resources, and Questions

If you provide your employees with a 105 Plan Health Reimbursement Arrangement (HRA) in conjunction with the health insurance you offer through the Iowa Bankers Benefit Plan (IBBP), you can access related forms and other resources by logging into the IBIS Group Benefits Portal.

If you have questions about the 105 Plan HRA, please contact your IBIS Marketing Representative at (800) 532-1423 or IBIS Customer Service at (800) 258-1415.

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