Health Reimbursement Arrangement

A Health Reimbursement Arrangement (HRA) is a federally approved program enabling employers to reimburse employees, with tax-free dollars, for qualified medical, dental and vision care expenses as defined by IRC Section 213(d), including over-the-counter drugs and supplies, certain health based insurance premiums and COBRA premiums.  

• Contributions to the HRA can be made by employers only
• The Employer decides if the plan will be funded or unfunded
• Funds may accumulate and roll from year to year 
• May include a “spend down” provision for former employees
• May include employees, former employees and retirees
• Plan must be in writing, non-discriminatory & only requires IRS Form 5500 if more than 100 participants
• Contributions may be prorated and reimbursements may be limited to funds available in the account.

HRAs plans can be added to any employee benefits plan design.   This plan allows employers to save significant premium dollars by taking advantage of lower cost high deductible or coinsurance plans and self insuring a portion of their employees’ out-of-pocket exposure.