Health Reimbursement Arrangements (HRA)

What is an HRA?

  • The HRA is an employer-sponsored plan that can be used to reimburse a portion of employees’ out-of-pocket medical expenses, such as deductibles, coinsurance and pharmacy expenses.
  • The employer designates and funds contribution amounts that will be credited to each employee’s account based on eligibility requirements for the plan. (Only employers can contribute to an HRA)
  • The employer determines which out-of-pocket qualified medical expenses the plan can be used for
  • If permitted by plan design, unused account balances will be rolled over to the following plan year.

What are the Benefits of an HRA for the Employer?

  • Commonly offered with a high deductible health plan, lower premium costs on the HDHP can reduce the overall healthcare costs for the employer.
  • Employer contributions to an HRA are tax-deductible.
  • Flexible plan design options allow employers to customize the plan to fit the unique healthcare needs and wellness initiates for your employee population.