Health reimbursement account

A Health Reimbursement Arrangement, also known as a Health Reimbursement Account (HRA),^[1] is a type of US employer-funded health benefit plan that reimburses employees for out-of-pocket medical expenses and, in limited cases, to pay for health insurance plan premiums.^[2]

An HRA is not truly an account, since it does not place funds under a separate legal title. Instead, it is an agreement under which the employee can submit qualified health expenses to the employer for reimbursement.^[3]

Following implementation of the Affordable Care Act, HRAs must be integrated with a qualified employer-sponsored group health insurance plan to avoid excise tax penalties.^[4] Using a Health Reimbursement Arrangement yields "tax advantages to offset health care costs" for both employees and employers.^[5]