What is a Healthcare Reimbursement Account (HRA)?
A Healthcare Reimbursement Account (HRA) is an account maintained by an employer to be used for reimbursement of qualified medical expenses of its employees. The best way to understand HRAs is to contrast them with Health Savings Accounts (HSAs). HSA accounts must be funded prior to use. HRAs need not be explicitly funded prior to use. An employer may simply pay for qualified medical expenses on a pay-as-you-go basis. HSA accounts belong to the employees and are fully portable. Employees can take the accounts with them when they leave an employer. HRAs belong to the employer, although each employee gets an allocation of dollars each year, and unused dollars roll over from year to year as long as the employee stays on at the company. Typically, the employee will lose the money in an HRA account if they leave the employer. An HSA may be funded by either the employer or the employee. An HRA may only be funded by the employer.
