A health reimbursement arrangement (HRA) is an employer-funded account that reimburses you for qualified medical expenses or, in some designs, for insurance premiums. You do not contribute your own paycheck dollars the way you do with an FSA or HSA. The employer sets the allowance, the eligible expenses, and whether unused amounts roll over.
HRAs sit next to HSAs and FSAs in benefits booklets but follow different rules. Side-by-side basics: HSA and FSA basics. Plan shopping context: Health insurance open enrollment.
HRA vs HSA vs FSA (quick contrast)
| Feature | HRA | HSA | Health FSA |
|---|---|---|---|
| Who funds it | Employer only (typical) | You and/or employer | You (and sometimes employer) |
| Portable when you leave? | Usually no (exceptions vary) | Yes, you own it | Generally no |
| Needs HDHP? | Depends on HRA type | Yes for eligibility | No |
| Common use | Reimburse expenses / sometimes premiums | Save/invest for care | Same-year expenses |
Deductible and out-of-pocket math still come from the health plan, not the HRA label (Health insurance deductibles; Premiums vs deductibles).
Common HRA flavors you may see
Names vary by employer and insurer (UnitedHealthcare, Aetna, Cigna, Kaiser, Blue Cross Blue Shield plans, and others partner differently). Federal rules recognize several designs; employers pick one:
- Group Coverage HRA / traditional integrated HRA: pairs with the employer’s group medical plan; reimburses deductibles, coinsurance, copays, or other allowed expenses up to an annual cap.
- Individual Coverage HRA (ICHRA): employer offers an allowance toward individual Marketplace or other individual coverage you buy; notice and offer rules apply.
- Excepted Benefit HRA / QSEHRA (small employer): specialized designs with their own caps and notice requirements.
- Retiree HRA: for former employees; different from active-worker COBRA continuation (COBRA health coverage).
Always read your summary plan description (SPD). Marketing one-pagers skip eligibility traps.
How reimbursement usually works
- You incur a qualified expense and pay the provider (or the plan applies cost-sharing).
- You submit a claim through the HRA administrator (often WageWorks/HealthEquity, WEX, Optum, or the carrier’s portal) with an itemized receipt or EOB.
- The HRA reimburses up to your remaining balance, tax-free when rules are met.
- Expenses already paid by the plan, another account, or a flexible spending double-dip are usually ineligible.
Keep EOBs from medical bills and insurance workflows; administrators often want them.
Worked example: $2,000 HRA + deductible
Alex’s employer offers a group plan with a $3,000 individual deductible and a $2,000 annual HRA that reimburses deductible and coinsurance expenses for in-network care.
Alex has outpatient surgery. Allowed amount after network rates: $4,500. Alex owes the $3,000 deductible first, then 20% coinsurance on the remaining $1,500 = $300. Total member cost-sharing before OOP max nuances: $3,300.
Alex submits to the HRA and receives $2,000 back. Out-of-pocket cash for this event: about $1,300, not $3,300. The HRA did not erase the deductible; it funded part of it.
If Alex had an HSA-eligible HDHP instead, the employer might offer HSA contributions rather than (or in addition to) an HRA - designs are mutually constrained by IRS rules. Do not assume you can max an HSA and a full-purpose HRA on the same coverage without checking.
Open enrollment questions to ask HR
- Annual HRA allowance and whether unused funds roll over
- What expenses and premiums are eligible (and excluded)
- Whether the HRA is integrated with only one medical option
- Claim deadlines and substantiation rules
- What happens to the balance if you leave mid-year or go on COBRA
- Interaction with FSA or HSA if both appear in the enrollment system
Checklist
- Find the HRA dollar cap and eligible expense list in the SPD.
- Compare HRA + plan deductible before picking a rich PPO vs HDHP.
- Save EOBs and itemized receipts for every claim.
- Confirm HSA eligibility before contributing if an HRA is also offered.
- Ask HR what happens to unused HRA funds at year-end and at termination.
- Re-read notices if your employer switches to an ICHRA model.
Educational only. Not tax, legal, or benefits advice. HRA types, caps, and IRS rules change. Rely on your plan documents and a qualified benefits or tax professional for enrollment decisions.