A health reimbursement account* (HRA) is an plan or account that can be offered alongside a health plan, like a high deductible health plan (HDHP). The HRA helps you pay a portion of your deductible, including medical expenses.
Federal tax law requires that:
• The employer can only contribute to the HRA. You cannot contribute to the HRA.
• Unused funds may (if allowed by the plan) rollover and be used in the following year or years. There is no “use it or lose it” rule.
• Any contributions the employer makes to an HRA are not taxable to you. Any payments made from your HRA are also not taxable to you.
* Also called a health reimbursement arrangement