HRAs are fully owned and funded by the employer. Because the money contributed by your employer doesn’t count as income, there are no tax implications. It’s kind of like getting a raise. You can use the money in the HRA throughout the year for qualified medical expenses. Depending on your plan design, any leftover dollars may roll over from year-to-year (as long as you continue to be a member of the plan) or they may be forfeited. Check with your plan administrator or HR department for more information about your plan design.

HRAs are usually provided by employers to complement a higher-deductible health plan (HDHP), but can be paired with any type of health plan or offered alone.

Eligible expenses under an HRA plan are determined by your employer. Contact your human resources department or refer to the Summary Plan Description (SPD) for information about your HRA plan design and eligible expenses. Generally, the IRS allows the following expenses to be reimbursed from an HRA plan:

• Health insurance deductibles
• Co-insurance and copays
• Other expenses included in IRS Publication 502—Medical and Dental Expenses as eligible or qualified expenses
• Some insurance premiums

Eligible expenses must be incurred by the employee and/or eligible members of the employee’s family, and take place within the benefit plan year.

HRAs provide reimbursements for qualified medical expenses incurred by the employee, the employee’s spouse and qualified dependents as defined in the IRS Code Section 152.

If your HRA is an unlimited HRA, you are not eligible to participate in a HSA plan. If your HRA is a limited purpose HRA, you can utilize both the HRA and HSA.

Yes, your employer can offer either or both of these plans.

This depends on your employer’s design for your plan. If you have both an HRA and a Health FSA, review your Summary Plan Description (SPD) to find out which account pays first. Your expense will be reimbursed by the plan that’s set up to pay first, and when the money for that account is depleted, funds from the other account will be used toward future eligible expenses. Expenses reimbursed under your HRA may not be reimbursed under any other plan or program, including your Health FSA – and vice versa. Your HRA and health FSA, while separate accounts, provide reimbursement of qualified medical expenses that are defined by your employer and the IRS. This means you can’t submit a claim for an eligible Health FSA expense and then request reimbursement for the same expense from your HRA. There’s no “double-dipping.”

Each time a medical provider (i.e., doctor, hospital, etc.) submits claims to your health insurance carrier, you will receive an Explanation of Benefits (EOB) detailing what the health plan will pay and what you must pay. Admin America requires a copy of your Explanation of Benefits (EOB) along with a claim for reimbursement request form. Following the guidelines will ensure you receive your reimbursement without unnecessary delays.

Your plan participation will end automatically upon termination of employment. Expenses for services you have after your termination date typically are not eligible for reimbursement. Some HRA plans, however, do include a “spend-down” provision that allows HRA participants to submit eligible HRA expenses, incurred during a specific time frame, after termination. This assumes participants continue to meet all other requirements. The spend-down feature is not available for all plans; therefore refer to your Summary Plan Description for specific details related to your plan. You may be entitled to elect COBRA continuation coverage under the HRA and receive reimbursement for eligible HRA expenses incurred after your termination. You must be eligible and make the required COBRA premium payment.