A health reimbursement arrangement (HRA), also known as a health reimbursement account, is a health spending account provided by an employer. The money in this account, which is funded by an employer, reimburses employees for out-of-pocket medical expenses that are not covered by company-sponsored health insurance.
What expenses are covered by HRAs?
A health reimbursement arrangement (HRA) is a tax-advantaged reimbursement account, so the IRS determines the types of expenses that are covered by the money in this account. Generally, qualified expenses include medical equipment, medications, cosmetic procedures, reconstructive procedures, doctor visits, dental and vision care, and other qualified medical expenses that require a prescription.
How does an HRA work?
The employer funds an HRA account each year. The money is available to employees at the beginning of each year and can be used to pay for qualified medical expenses determined by the employer. An employer not only identifies the type of expenses the money will cover, but also when the money is used.
Is there a limit to the amount of money an employer can contribute?
There is a limit to the amount of money an employer can contribute to health reimbursement arrangements (HRAs).
Is an HRA taxed?
HRA money is not included in your gross income because it’s an employer who contributes it. This money is, therefore, not taxed if it is used to pay for qualified medical expenses.
Eliminate the Hassle of Medical Reimbursement
Advanced Reimbursement Solutions is one of the most reputable medical reimbursement companies that can help eliminate the hassle involved in medical reimbursement. If you want to learn more about a health reimbursement account (HRA) or any other health accounts, feel free to contact us today and speak with one of our experts in Wilmington or Phoenix.