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HRA card The recent additions of Small Employer, Individual and Excepted Benefit HRAs means more opportunity to maximize value and reduce health care costs through flexible spending on an “as needed” basis. (Photo: Shutterstock)

Health reimbursement arrangements (HRA) are among the most overlooked employee health benefit products available. But, they can be crucial for companies that are switching to a lower premium plan by providing tax-advantaged financial assistance to cover employees’ eligible out-of-pocket health care expenses.

So, what is an HRA? The concept itself is pretty straightforward: they are tax-advantaged accounts funded with employer dollars to pay employee expenses not covered by their health plan. Employers outline what expenses will be covered in an HRA summary plan document as outlined by the Internal Revenue Service Publication 969. As an example, an HRA could pay all eligible medical expenses, including premiums for health and long-term care insurance, or it could be limited to cover only dental or vision expenses. Most organizations contribute annually or monthly.

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