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Principal Adds HRA Alternative

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NU Online News Service, Feb. 3, 2004, 1:17 p.m. EST – Principal Financial Group Inc., Des Moines, Iowa, has come up with an alternative to health reimbursement arrangements.[@@]

Principal has designed its new Principal Reimbursement Arrangement accounts for small and midsize employers that want to contribute to personal health arrangements for employees.

The accounts resemble HRAs. Principal will sell the arrangements along with high-deductible health insurance, and employees can roll unused funds over from one year to the next. But the arrangements are different from HRAs because Principal will fund the accounts using the employer’s premium payments.

Use of premium funding means that employers can split the cost of funding the accounts with employers, Principal says.

The federal government requires employers that use HRAs to provide all of the funding themselves.