Health Reimbursement Arrangements (HRA)

A Health Reimbursement Arrangement (HRA) is an employer-funded plan that reimburses employees for qualified medical expenses. Unlike an HSA or FSA, only the employer contributes to an HRA, and employees can use the funds for out-of-pocket healthcare costs without needing to contribute themselves.

 

HRAs provide businesses with a cost-effective way to support employees’ healthcare needs while maintaining control over benefit expenses. They can also be paired with high-deductible health plans (HDHPs) to provide additional financial relief for employees.

Key Benefits of an HSA:

Employer-controlled contributions

Employers decide how much to contribute each year.

Tax-free reimbursements

Employees receive tax-free funds for eligible medical expenses.

Flexible plan design

Employers can tailor HRAs to fit their budget and workforce needs.

No “use-it-or-lose-it” requirement

Employers may allow unused funds to roll over, depending on the plan design.

Eligible Expenses Covered by an HRA:

Medical deductibles, copayments, and out-of-pocket expenses

Prescription medications and specialist visits

Dental and vision care, including orthodontic treatments

Select medical equipment and preventive care services