Health Reimbursement Arrangements (HRA)

What is a Health Reimbursement Arrangement?

A health reimbursement arrangement or account (HRA) is an employer-funded, tax-advantaged account used to reimburse employees for qualified medical expenses. Employers set aside a certain amount of money each year for employees to use on healthcare expenses, such as deductibles, copayments, and prescriptions.

Benefits of Offering HRAs to Employees

HRAs are becoming increasingly popular among employers to provide cost-effective healthcare benefits to employees while also maintaining control over healthcare spending.

Here are a few reasons why employers should consider offering HRAs:

Cost savings

By offering HRAs, employers can reduce their healthcare costs while still providing their employees with valuable healthcare benefits. This is because HRAs allow employers to set a budget for healthcare expenses and control how those funds are spent.


HRAs can be customized to meet the specific needs of the employer and their employees. For example, employers can set different reimbursement amounts for different types of expenses or for employees at different levels within the organization.


Offering HRAs can help employers attract and retain top talent by providing a valuable healthcare benefit that employees may not be able to find elsewhere.

Tax advantages

HRAs offer tax advantages for both employers and employees. Contributions to HRAs are tax-deductible for employers, and reimbursements for qualified medical expenses are tax-free for employees.


HRAs can help employers comply with healthcare regulations and avoid penalties for failing to offer compliant healthcare benefits.

HRAs can be a cost-effective and customizable way for employers to provide valuable healthcare benefits to their employees.

By offering HRAs, employers can attract and retain top talent while also controlling healthcare costs and complying with healthcare regulations.

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