Health Reimbursement Arrangement (HRA)

A Health Reimbursement Arrangement (HRA) is an employer-funded health benefit plan that reimburses employees for eligible medical expenses. HRAs are designed to help employees pay for medical expenses not covered by their health insurance plan, such as deductibles, copayments, and coinsurance.

Here are some key features of an HRA:

• Employer-funded: HRAs are funded entirely by the employer, and employees do not contribute to the plan.

• Reimbursement for medical expenses: HRAs reimburse employees for eligible medical expenses, up to a certain amount determined by the employer.

• Eligible expenses: Eligible expenses may include deductibles, copayments, coinsurance, and other out-of-pocket medical expenses, as determined by the employer.

• Customizable: Employers can design their HRA to meet the specific needs of their employees, such as by setting different reimbursement amounts for different types of expenses.

• Portable: Unlike some other types of employer-sponsored health plans, HRAs are portable, which means that employees can take their HRA funds with them if they leave their job.

Example:

An example of an HRA is a plan in which an employer offers a reimbursement of up to $2,000 per year for eligible medical expenses. Eligible expenses may include deductibles, copayments, and coinsurance, as well as certain medical expenses not covered by the employee's health insurance plan, such as vision and dental care. The employer determines which expenses are eligible for reimbursement, and the employee submits receipts or other documentation to the employer to receive reimbursement for eligible expenses. The HRA is funded entirely by the employer, and employees do not contribute to the plan. The HRA is customizable to meet the specific needs of the employer and its employees, and the funds are portable, meaning that employees can take their HRA funds with them if they leave their job.