Health Reimbursement Arrangements, or HRAs, are a type of account that is provided by employers as part of a health care benefit program for their employees. Although they are not insurance, HRAs are offered in conjunction with high-deductible health insurance plans. They are designed to help employees manage and pay for certain qualified health care expenses using funds that they have set aside in the HRA account each year.
An HRA can allow employees to pay for medical services such as routine physicals, preventive care, immunizations and other types of doctor visits that may not otherwise be covered by their standard health insurance plan. Companies of any size can offer HRAs as part of their benefits program. The enrollment process and employee eligibility requirements generally vary, depending on the health insurance plan provider. Even self-employed individuals can use an HRA to enable them to reimburse medical expenses, as well as health insurance premiums, from their business.
Employees in an HRA program who do not use their allotted funds within a given year are allowed to roll over those dollars to the following year. However, if an employee leaves the company due to termination, the employer is allowed to keep the funds remaining in the employee’s HRA account.
HRAs can truly help employees and self-employed business owners cover a wide array of medical and preventive care costs without having to file extra paperwork or wait for insurance company approval.