Overview: A Health Reimbursement Account or Arrangement (HRA) is an employer funded benefit plan used to reimburse employees for approved medical expenses, typically on a pay-as-you-go basis. The employer contributes on behalf of all eligible employees. No employee contributions are allowed.
HRAs have advantages for both the employer and the employee. Advantages for the employer include:
Some advantages for employees include:
Unlike health savings accounts (HSAs), an HRA is owned and operated by the employer. As a result, it is the employer's responsibility to ensure that the HRA is used only for qualified medical services.
Author: Tracy Morley, SPHR, Legal Editor
The 21st Century Cures Act will allow certain qualified small employer health reimbursement arrangements (QSEHRAs), create W-2 reporting requirements, and include notice requirements.
Employment glossary definition of HRA (Health Reimbursement Arrangement).
HR guidance on the benefits of Health Reimbursement Accounts (HRAs) for employees and employers.