Health Reimbursement Arrangement
A Health Reimbursement Arrangement (HRA) is a tax-favored arrangement whereby the employer agrees to reimburse a set amount of eligible medical expenses not covered under other insurance. Unlike Flexible Spending Accounts, the account is not pre-funded and the employee does not contribute funds. The funds can rollover year-to-year. Many employers use this type of plan in conjunction with a health plan with a high deductible in order to save premium costs.
The employer is able to deduct claim reimbursements while the employee is not taxed on the eligible disbursements.
Doctor’s office and prescription drug co-pays
Medical deductibles and co-insurance
Approved over-the-counter items
Vision and dental costs