This is a continuation of our recent series about all things HRAs. If you need to get caught up, check out What is an HRA and What are the Benefits of an HRA? Let us show you the easiest way to get started with an HRA (Health Reimbursement Arrangement).
Quick Refresher: HRA 101
An HRA or Health Reimbursement Account (and sometimes known as a Health Reimbursement Arrangement) is an employer-funded health account for out-of-pocket medical expenses.
More technically, an HRA is an employer-funded health account that allows for tax-free reimbursement of out-of-pocket medical expenses. These accounts are owned by the employer, not the employee. As such, when an employee leaves their employer the funds stay with the employer. Your HRA is not your healthcare plan. HRA limits are set annually by the IRS. For 2017, employer contribution for small business HRAs are $4,950 for individuals and $10,000 for families
HRA Day 1
Unlike an HSA or FSA, only your employer can contribute to an HRA. There are no individual contributions. The good news is, if your employer offers an HRA (and you are enrolled in their healthcare plan), you can start using your HRA immediately for all qualified out of pocket medical expenses.
How to Use Your HRA
- Receipt upload/reimbursement – if you make a purchase without your HRA debit card, you can reimburse yourself for the out-of-pocket expenses. Save those receipts!
- (Optional) Debit card – some HRA companies provide individuals with a debit card to easily pay for qualified out of pocket health expenses. HRA debit cards are a great way to access available funds without the necessity of offline form completion. Plus, there is no wait time to get reimbursed.
HRA use is limited to expenses that occur within plan year (based on purchase date), so be conscious of this when submitting reimbursement requests.
HRA Final Tip
HRA’s are 100% free for employees to use for qualified out-of-pocket health expenses. Take advantage of this premier HR benefit from your employer to help cover health expenses. Your bank account will thank you!
If you need more help with health account decisions, check out our blog. We will make you a healthcare benefits expert in no time, without any extra work or effort on your end.
Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.