Health Reimbursement Account

What is a Health Reimbursement Arrangement (HRA)?

A Health Reimbursement Arrangement is an employer-owned account that allows participants to be reimbursed for eligible out-of-pocket expenses, including co-pays, coinsurance and deductibles. Health Reimbursement Arrangements are typically tied to a Consumer Driven Health Plan, or High Deductible Health Plan (but they don’t have to be), typically creating lower health insurance premiums for employees and employers. Employers will contribute a predetermined dollar amount for each employee into the account and the employee will have a set amount of time in which the funds must be claimed.

Health Reimbursement Arrangements allow employees to be reimbursed for eligible expenses from a pool of funds set aside by the employer. In many instances, the employee has to meet a certain deductible threshold before the Health Reimbursement Arrangement will start to pay out. For example, your deductible is $1,500 and your employer’s Health Reimbursement Arrangement is set up to pay for any deductible expenses above $500. You must submit documentation showing valid deductible expenses that total at least $500.01 before any payments will be issued. You may submit claims as frequently or infrequently as you would like, however, no reimbursements will be issued until the $500 threshold has been reached.