Your Health Reimbursement Arrangement (HRA) is an employer-funded account designed to help you cover various medical expenses. It provides a way for your employer to reimburse you for eligible healthcare costs.
Core Coverage of Your HRA
HRAs are versatile accounts that employers establish to reimburse eligible healthcare costs. Unlike some other health savings accounts, HRAs are solely funded by your employer.
Eligible Medical Expenses
Generally, an HRA will reimburse you for medical expenses, which may include a range of healthcare costs. The specific items covered can vary based on your employer's plan design, but commonly include:
| Covered Item | Description |
|---|---|
| Medical Expenses | This is the broad category for which HRAs provide reimbursement. |
| Monthly Premiums | Your HRA may cover the payments for health, dental, or vision insurance plans you purchase, particularly if your HRA is offered as an alternative to a traditional group health plan. |
| Out-of-Pocket Costs | These are direct costs you pay for healthcare services. Your HRA can reimburse you for these expenses, which commonly include: - Copayments: A fixed amount you pay for a covered healthcare service after you've paid your deductible. - Deductibles: The amount you must pay for healthcare services before your insurance plan starts to pay. |
HRA as an Alternative to Group Health Coverage
In some cases, employers offer an HRA not as a supplement to existing insurance but as a direct alternative to providing a traditional group health plan. This means your employer might provide funds through an HRA for you to purchase your own health insurance.
When an HRA is offered this way, you may be required to buy a health plan on the individual insurance market, rather than enrolling in a plan directly through your employer.
Key Considerations for Your HRA
The exact items your HRA covers and the specifics of its operation can vary significantly based on your employer's plan design.
- Always review your specific HRA plan documents provided by your employer. These documents will outline the exact eligible expenses, reimbursement processes, and any specific rules that apply to your account.
