Health Reimbursement Account (HRA)

Health Reimbursement Accounts (HRAs) are employer-funded accounts designed to help you pay for health care.

HRA designs and their advantages will vary from employer to employer. Employers will determine how much money is in the account, what expenses are eligible, and if plan funds rollover from year to year.

Your employer will provide 100% of all the funding. You will never use your own money to fund an HRA.

Frequently funds are available to you on the first day of your plan year. Sometimes unused funds can roll over from year to year.

 

Funding the Account

Your employer will provide the HRA to help you cover the costs of your health care. Some employers fund the account throughout the plan year. Others will only provide funding at the beginning of the plan year.

Eligible Expenses

Your employer determines what expenses are eligible to be covered through the HRA. These often include deductibles, co-payments and coinsurance amounts. Some HRAs also cover services and items not covered by insurance, such as over the counter medications and supplies. 

Using the Account

HRAs often include a debit card to make paying for care fast and convenient. In addition, you can submit reimbursement requests online. You may be asked for receipts to show that the expenses were eligible within your employer’s Plan rules. Keep in mind that there may be a time limit for using the funds. The HRA information provided by your employer will explain, for example, whether you need to use all the funds during the plan year or can continue using them in future plan years. Also, if you leave your employer before using all available funds, the remaining money stays with the employer.

 
All eligible expenses are defined by IRS rules and your employer’s plan. Your employer should provide you with a Summary Plan Description (SPD) which will include a list of expenses they have deemed eligible or direct you to a website where you can view a list. Specific expenses can include the following examples but be sure to check your Plan’s documentation for expenses eligible for reimbursement from your HRA:

  1. Insurance premiums
  2. Copays for doctor’s office and pharmacy visits
  3. Health expenses such as prescriptions, physical therapy, addiction support, acupuncture
  4. Dental expenses such as routine preventative care, oral surgery, orthodontics
  5. Vision expenses such as routine eye examinations, eyeglasses and contact lenses
  6. Transportation used primarily for medical care

 

Enrolling

You can sign up during the open enrollment period or new employee sign up period. Once enrolled, most HRAs have an online portal where you will be able to access your account.

Adding Money

Your employer will be the sole contributor to your HRA. In some cases, you may have the option to choose a contribution level. Regardless, it is your employer which will make all the deposits and ultimately determines the contribution amount. You will never use your own money to fund an HRA.

 
There are several ways to use the funds in your HRA to pay for qualified health expenses.

Debit Card

You can use your debit card at most doctors’ offices and pharmacies to pay for qualified health expenses directly from your HRA. When you are paying for an expense, just use the card as you would a credit card or debit card. However, your debit card will not work at ATMs or provide “cash back” at retailers.

Provider Payments

In the event you receive a bill, you can ask that payment be made directly from your HRA account to your healthcare provider. Or if preferred, you can also request reimbursement for expenses and provide the proper substantiation.

Reimbursements

Reimbursement options include having the employer pay the provider directly, or the employer reimburse the participant (i.e. you) directly. You can always pay for your healthcare expenses out-of-pocket with a credit card, cash or a check. Afterwards, log in to the portal and follow the steps to submit a claim online. If you do not have access to the portal, you can also mail or fax in your claim. However, if you use either of these methods, more time may be required to process your claim. In any case, be sure to have an EOB statement or a copy of the receipt or bill that includes the service provider’s name and the date and amount of the service.