What is a Health Reimbursement Arrangement?
A Health Reimbursement Arrangement (HRA) is an employer-funded spending account that can be used to pay qualified medical expenses.The HRA is 100% funded by your employer. The terms of these arrangements can provide first dollar medical coverage until the funds are exhausted, or insurance coverage kicks in. The contribution amount per employee is set by the employer, and the employer determines what the funds can be used to cover and if the dollars can be rolled over to the next year. In most cases, if the employee leaves the employer, they cannot take remaining HRA funds with them.
Typically, your employer provides a high deductible medical plan and establishes an HRA in your name to help pay for your eligible out-of-pocket medical expenses. The HRA is funded by your employer. You may not contribute to the funding of your HRA. If use all of your funds and incur additional medical expenses that are your responsibility, you will be required to pay for these additional expenses out of your own pocket.
These plans provide an incentive to become actively involved in your health care spending. If you are conservative in your use of health care funds leftover at the end of the year are rolled over to the next year. Unused HRA funds may be saved for future medical expenses. Please consult your human resources department to determine if there are any limitations on the amount of funds you may rollover to the next plan year.
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