HEALTH REIMBURSEMENT ARRANGEMENT (HRA) FAQs

What is a Health Reimbursement Arrangement (HRA)?

• An HRA is an employer-owned account to reimburse employees’ qualified medical-related expenses not covered by insurance on a non-taxable basis. This plan is governed by IRC Section 105. The employer has complete control of the rules in determining when the funding takes place, what expenses qualify for reimbursement and how much unused funds are accumulated for possible future use and what happens to the funds upon termination or retirement. The HRA can help reduce Health premiums without major reductions in health benefits.

Who is eligible to claim expenses under an HRA?

• Expenses under an HRA can be for current, former or retired employees, including spouses and dependents. Please see your employer’s HRA plan materials for specific details on your HRA administration.

Can my HRA funds be rolled over from one Plan Year to the next?

• Funds may be rolled over from one Plan Year to the next. Please see your employer’s HRA plan materials for specific details on your HRA administration.

How do I benefit from being a participant in my employer’s HRA plan?

• HRAs enable you to use tax-free dollars to be reimbursed for qualified medical expenses. The parameters of the HRA administration (funding, eligible expenses, etc. are determined by your employer. Please refer to your employer’s HRA plan materials for detailed information.

What medical expenses are covered under an HRA?

• Your employer determines what will and will not be reimbursable under the HRA plan. Eligible expenses can be anything under the scope of IRC Section 213(d). Many employers decide to limit the eligible expenses to certain types of expenses; for example, deductibles, co-pays and co-insurance. Other employers will offer a wide-range of eligible expenses. Please see your employer for specific details about your HRA plan.

Is an HRA eligible under COBRA?

• An HRA is considered a "group health plan" for purposes of the health care continuation coverage requirements under COBRA. A participant electing COBRA coverage must be eligible to receive the maximum amount of reimbursement that was otherwise available at the time of the COBRA qualifying event.