Health Reimbursement Arrangement
What Does Health Reimbursement Arrangement Mean?
A Health Reimbursement Arrangement (HRA) is an IRS-approved medical reimbursement plan initiated and funded by an employer. It reimburses employees for individual health insurance premiums and out-of-pocket medical expenses, such as deductibles, coinsurance, and copayments.
It is also referred to as a Health Reimbursement Account.
Insuranceopedia Explains Health Reimbursement Arrangement
An HRA is similar to a Health Savings Account (HSA); however, it does not have a limit on employer contributions. Both are good ways to supplement the benefits of health insurance, as they allow tax-free withdrawals and the balance rolls over from year to year. Additionally, an HRA can be paired with a high-deductible health plan (HDHP) to help employees cover the cost of the deductible before the insurance coverage begins.
