What to know about Health Reimbursement Arrangements

Health Reimbursement Arrangements (HRAs) are accounts funded by employers to help cover your health care costs that you’d normally have to pay for yourself.

HRAs are accounts that are owned and funded by your employer. This means they make the contributions to it, at the dollar amount they choose. It’s important to note — an HRA isn’t traditional health coverage through a job. And unlike flexible spending accounts (FSAs) or health savings accounts (HSAs), you aren’t allowed to contribute to an HRA.

Employees can use the money in HRA accounts to pay for medical costs up to a set amount each year. Unused funds may carry over from year to year, depending on the arrangement.^1,2

The IRS and your employer decide what medical expenses are allowed under an HRA. These costs can be different. Eligible expenses may include payments, medications and supplies: ³

Payments

• Payments toward a deductible
• Copays
• Routine doctor visits
• Hospital expenses
• Dental care
• Vision care

Medication

• Prescriptions

Supplies

• Blood glucose monitors 
• Blood pressure monitors
• Eyeglasses and contact lenses

HRA funds can be used and accessed in different ways, depending on your employer and the arrangement they’ve created.³

• Online account — providers are paid directly through an online HRA account portal
• Submit receipts — this setup requires you to pay for expenses yourself and then submit receipts to your employer for reimbursement
• Direct reimbursement — this is when plans reimburse your network doctor directly, meaning you don’t have to do anything

Like any health care benefit, there are rules, guidelines and recordkeeping to keep in mind. 

• Your employer owns the HRA and decides on the contribution amounts, along with what is covered
• Employees cannot voluntarily contribute to their HRA
• Employees are not allowed withdraw funds in advance to pay for medical expenses
• To use an HRA, employees must have health insurance. This includes a plan through the Marketplace, private insurance or Medicare.

It’s also a good idea to sign into your account regularly to check your account balance, view transactions and access health education resources if available.

When submitting a claim for reimbursement from your HRA, you’ll need one of the following:

• A detailed receipt from the pharmacy, doctor or other health care provider
• An Explanation of Benefits (EOB) from their health plan

• Reimbursed health care expenses, including the date of service, service detail and proof of payment
• HRA compliance documents for the Affordable Care Act and IRS regulation, including plan documents, notices given to employees, and any correspondence regarding the plan
• Small business record-keeping
• The IRS requires small businesses to keep records for up to seven years.

Health care costs add up quickly, and an HRA may help with the burden. Most of the time, you’ll enroll for an HRA during open enrollment. Contact your employer to find out if HRAs are available to you.