This content is for general informational purposes and does not constitute medical, legal, or financial advice. Healthcare rules and costs change annually. Last reviewed: January 1, 2025. Always verify current details with your insurer, employer, or a licensed healthcare navigator.
HRA (Health Reimbursement Arrangement)
An employer-funded account that reimburses you for qualified medical expenses tax-free.
Full Definition
A Health Reimbursement Arrangement (HRA) is an employer-funded benefit that reimburses employees for qualified out-of-pocket medical expenses and, in some cases, individual health insurance premiums. Unlike an HSA or FSA, only employers can contribute to an HRA — employees cannot. Funds don't belong to you; unused amounts may or may not roll over depending on the plan. Two main types: the traditional HRA (paired with employer coverage) and the Individual Coverage HRA (ICHRA, which helps employees buy their own marketplace plans).
Real-World Example
Your employer sets up an HRA with $1,500/year. You pay your deductible and out-of-pocket medical costs, then submit receipts to be reimbursed from your HRA balance — fully tax-free for both you and your employer.
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