Health Reimbursement Arrangement

Updated: 09 June 2023

What Does Health Reimbursement Arrangement Mean?

A health reimbursement arrangement (HRA) is an IRS-approved medical reimbursement plan initiated and funded by an employer that reimburses employees for individual health insurance premiums and out-of-pocket medical expenses, such as deductibiles, coinsurance, and copay.

It is also known 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. A good way to supplement the benefits of health insurance, both allow tax-free withdrawals and credits roll over from year to year. Moreover, an HRA may be paired with a high deductible health plan (HDHP) to help the employee cover the cost of the deductible before the insurance kicks in.

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