Health Reimbursement Arrangement (HRA)

Health Reimbursement Arrangements (HRAs) are employer-funded group health plans from which employees are reimbursed tax-free for qualified medical expenses, up to a fixed dollar amount per year. Employers can utilize an HRA to address and offset deductibles and the rising costs of healthcare.

Learn More: FSA 101

Key Things to Know About HRA

The HRA is 100% employer-funded. It covers a portion of the employee's health plan deductible.
One way to save money on health benefits is to find plans that offer a higher deductible in exhange for lower premiums. When employers use this option they'll often pair it with an HRA to help offset the higher deductible.
The HRA applies only to the health plan., It cannot be paired with dental, vision, or other ancillary programs.
When the employee meets and exceeds their portion of the deductible, they'll submit their latest Explanation of Benefits (EOB) to Thrivepass, the HRA provider, for reimbursement.

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Here's a quick overview:

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Beginners: Start Here!

Are you taking advantage of your pre-tax savings accounts, such as FSA or HSA? Let’s break it down:

What are tax-advantaged benefit accounts
What is an eligible expense
How much to save
How they save you money

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Answers to Your Questions

A health reimbursement arrangement (HRA) is a health plan that the employer owns and contributes to for the benefit of employees. HRAs are 100% employer-funded and represent an employer’s commitment to pay for certain health care expenses or offset a portion of the deductible for employees.

If the employer chooses, employees’ dependents may also be covered.

Since it applies to your health plan deductible, the HRA can only be used in conjunction with health services covered under your medical insurane.

Once an employee reaches the threshold for HRA claims, they will complete a claim form and submit it with the health plan's explanation of benefits (EOB) to the HRA administrator.

How to Submit a Claim

Businesses can utilize HRAs in conjunction with a high-deductible health plan (HDHP) to control health care costs. The savings fund a portion of the employee’s deductible.

Employer reimbursements for qualified expenses are tax deductible for the employer and tax exempt for employees. Employers decide how to structure the plan, including:

How much to reimburse employees and in what order
When to reimburse – monthly, quarterly, or annually
Funding limits based on the account balance
What to reimburse – deductible, or other qualified expenses
If funds will rollover to the next health plan year
Who to cover – employee only or also dependents

Almost all employees can participate in an HRA, as long as they meet the IRS Section 152 definitions. “S” Corporation shareholders above the 2% ownership level and their immediate family members may not participate but may sponsor a plan for employees.

LLC, LLP, Partnership, and Sole Proprietors may not participate but may sponsor a plan for employees. If the spouse is a bonafide employee of the company, they may participate and use the benefit for the entire family.

Once the HRA plan is set up, the HRA administrator provides employees with details on the specific plan, account information, reimbursement amounts and rules, and tips to get the most benefit from the account.

The administrator pays medical bills when employees submit them and pays the provider directly or reimburses the employee quickly based on the employee’s preferred method, such as direct deposit or mailed check.

Yes. The two types of accounts run independently of one another and can be held concurrently.

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