HRA
An employer-funded account that reimburses employees for out-of-pocket medical expenses and individual health insurance premiums on a tax-free basis.
HRAs are funded entirely by the employer — employees never contribute. Reimbursements are tax-free when used for qualified medical expenses. Some HRAs (such as the QSEHRA and ICHRA) can reimburse individual health insurance premiums.
Also known as
Related terms
- ACA (Affordable Care Act)
A federal law (signed 2010) that expanded access to health insurance by creating the Health Insurance Marketplace, establishing income-based subsidies, and requiring insurers to cover pre-existing conditions.
- HSA
A tax-advantaged savings account available to individuals enrolled in a High-Deductible Health Plan (HDHP), used to pay for qualified medical expenses on a pre-tax basis.
Take the next step
Frequently asked questions about HRA
What is a Health Reimbursement Arrangement (HRA)?+
An HRA is an account set up by your employer. It helps you pay for medical costs and health insurance with money they provide. The best part is, you don't pay taxes on this money. It's a great way to handle healthcare expenses.
Who can get a Health Reimbursement Arrangement?+
Generally, your employer sets up an HRA for you. You qualify if your employer offers one as part of their benefits package. It's not something you sign up for on your own; your employer makes it available to their employees.
How do I use my HRA funds?+
Once your employer sets up an HRA, they will tell you how to use it. You usually submit receipts for medical expenses or insurance premiums. Then, your employer or the plan administrator reimburses you from your HRA.
What can HRA money be used for?+
HRA funds are typically used for approved medical expenses that aren't covered by your regular health plan. This can include things like deductibles, copayments, prescriptions, and sometimes even individual health insurance premiums. Your employer decides what is covered.