What is a Health Reimbursement Arrangement?

Authorized under Section 105 of the Internal Revenue Code, a Health Reimbursement Arrangement (HRA), also known as a Health Reimbursement Account, is a type of employer funded program that may be offered either in conjunction with a health plan, or as a standalone plan to reimburse qualified out-of-pocket medical expenses.

Although HRAs can be established in conjunction with any type of health plan, most often they are paired with a High Deductible Health Plan (HDHP). This pairing allows an employer to fund employees' individual Health Reimbursement Accounts using premium savings realized by switching from a low deductible health plan to a more economical high deductible plan.

HRA funds are then available to reimburse some portions of employers out of pocket deductible expenses and in some cases other eligible medical expenses.

Last update on May, 16 2013 by Administrator.

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