What is an HRA?

Answer:
HRA stands for Health Reimbursement Arrangement

which is a type of plan offered for use in conjunction with a high deductible health plan. HRAs allow employers to fund accounts for participating employees. The employees may use these funds to pay for medical expenses such as deductibles and other out of pocket fees.

HRA funds can be used for a variety of qualifying medical expenses including: co-pays, deductibles, prescription co-pays, over the counter medications, dental co-pays, eye glasses and exams, COBRA premiums, long term care premiums, and expenses covered under FSA reimbursement rules.

While an HRA is similar to an FSA, there are key differences. First, an HRA is funded by the employer while the FSA is funded by the employee. Next, the money in an HRA rolls over from year to year while the money in an FSA must be used in the designated calendar year or be forfeited.

If you leave the company, you may forfeit access to your HRA funds depending on whether you are fully vested in the plan or your company’s policy regarding HRA funds and separation.


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