What is an HRA?
Typically, your employer provides a high-deductible health plan (HDHP) and establishes an HRA in your name, using employer funds to pay for your eligible out-of-pocket medical expenses. These plans provide you with an incentive to be conservative in your healthcare spending, because funds left at the end of the year can be rolled over and saved for your future medical expenses, if your employer allows.
An HRA is a ‘Health Reimbursement Arrangement’ which is an employer-sponsored arrangement. Unlike an HSA, this is not an account that funds are paid into, but rather an arrangement between the employer and employee. The HRA is set up to fund a portion or all of an employee’s deductible, out of pocket, co-pay etc. By the employer taking a plan with a higher deductible or out of pocket these premiums are generally less freeing up money to help the employee fund this extra out of pocket.
Related Questions
- My husbands insurance just changed to a HIGH DEDUCTIBLE HSA/HRA plan. How does this change from the traditional deductible that we had in the past?
- Can I avail income-tax deduction for house rent allowance (HRA) as well the home loan interest?
- May an organization limit CHT access to members who complete an HRA?
