What is a health reimbursement account (HRA) plan?

A health reimbursement account (HRA) is established and funded by your employer to help you meet your medical expenses. Sometimes called a health reimbursement arrangement, an HRA may be offered as part of your overall health benefits package. Through the HRA, your employer (who is the only one who can contribute to this account) can reimburse you tax-free for certain medical expenses. The Internal Revenue Service (IRS) notes the following tax benefits of an HRA.
  • Contributions made by your employer can be excluded from your gross income. You do not pay federal income taxes or employment taxes on amounts your employer contributes to the HRA.
  • Reimbursements may be tax-free if you pay qualified medical expenses.
  • Any unused amounts in the HRA may be carried forward for reimbursements in later years. 

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Important: This content reflects information from various individuals and organizations and may offer alternative or opposing points of view. It should not be used for medical advice, diagnosis or treatment. As always, you should consult with your healthcare provider about your specific health needs.