A TRA is a commitment to your employees’ future
A Tuition Reimbursement Account (TRA) supports a strong recruitment and retention strategy to let employees know their employer cares about their professional development and career path.
Determining whether to continue their education or training is a big decision for an employee. Committing that amount of time, energy, and money can feel scary. Offering a Tuition Reimbursement Account (TRA) shows that you support them and their dedication to improve their skillset. Employers fund this tax-savings program for employees to help cover certain educational expenses. Administration of this account is easy and provides the employee with various options on how to spend their funds.
What’s Covered
Eligible expenses follow Internal Revenue Code (IRC) Section 127. Most common examples of TRA expenses include:
Why TRAs matter to your employees
Tuition Reimbursement is widely viewed as an important incentive program for current employees as well as job-seeking candidates. Employees are attracted to organizations that foster a culture of learning and self-improvement.
As reflected in the 2023 HSA Bank Health and Wealth Index report, 44% of respondents said that inflation impacted their ability to save for retirement. For those just entering the workforce or continuing their education, a Tuition Reimbursement Account can help to cover some costs that could result in debt or prevent them from saving for retirement. When employees are forced to carefully allocate their funds, enrolling in a class or training may not be as highly prioritized as voluntary benefits or retirement. Employers can make a difference in their organization’s level of expertise and confidence by implementing a Tuition Reimbursement Account.
How it works
-
Set the guidelines - First, the employer determines which expenses are eligible for reimbursement.
-
Pass the course - Typically, employees must complete the course with a passing grade before they can request reimbursement.
-
Submit the grade - Upon completion, employees submit expenses for reimbursement with the Tuition Reimbursement Claim Form.
-
Receive reimbursement - Once expenses are approved, employees may get reimbursed up to the maximum contribution limit per calendar year.
Contribution limits
Similar to other accounts, the IRS dictates and maintains the Tuition Reimbursement Account contribution limits allowed by federal regulations. An employer may contribute additional funds beyond that limit, however they will be viewed as taxable wages.
Ready to get started?
Complete the form and we'll have someone reach out to provide more information on how to add Tuition Reimbursement Accounts to your benefit plan.