A Health Reimbursement Arrangement (HRA) is an employer-sponsored account to reimburse a portion of your eligible out-of-pocket medical expenses.

Read on to find out specific details on using an HRA, or jump to a section with these links:

  1. What is an HRA?

  2. How does an HRA work?

  3. What are HRA payment options?

  4. Does my Healthcare FSA or my HRA pay for eligible expenses first?

  5. Can I use my HRA funds to pay my dependents' medical expenses?

  6. How do I sign up for my HRA?

  7. What is an Excepted Benefit HRA (EBHRA)?

  8. What is an Individual Coverage HRA (ICHRA)?

What is a Health Reimbursement Arrangement (HRA)?

HRAs may cover expenses such as deductibles, coinsurance, and pharmacy expenses. It’s not an insurance plan; it's a reimbursement program funded entirely by your employer to help you make healthcare more affordable.

How does an HRA work?

Your employer sets the rules for your company's HRA program, including which expenses are eligible for reimbursement under your particular HRA.

Your Health Reimbursement Arrangement (HRA) is funded by your employer and your employer sets the rules for how those funds can be used. You cannot contribute to your HRA. It is owned, defined, and completely funded by your employer.

It's one of the ways your employer helps you make healthcare more affordable. Your employer has set an annual limit for your HRA. Review your plan details for more detail.

What are HRA payment options?

There are several ways you may be able to use the funds in your HRA.

  • You may be able to use a Healthcare Card associated with your HRA to pay for eligible healthcare products and services.

  • You may be able to arrange to have your healthcare provider be paid directly from your HRA.

  • You can also be reimbursed for eligible expenses you pay out of pocket.

Does my Healthcare FSA or my HRA pay for eligible expenses first?

While your Healthcare Flexible Spending Account (FSA) funds are typically used first to pay for eligible expenses, your Health Reimbursement Arrangement (HRA) is customized by your employer. So, your plan may be different. Refer to the details of your plan document.

Can I use my HRA funds to pay my dependents’ medical expenses?

Use of your HRA funds for dependents is determined by the terms of your employer's HRA plan. Your employer's plan may permit you to be reimbursed from your Health Reimbursement Arrangement (HRA) for healthcare expenses incurred by your dependents.

However, your employer's plan may limit the use of HRA funds to only those expenses incurred by you. Please refer to the details of your plan document to determine if your spouse's and/or dependent(s)' medical expenses are eligible for reimbursement under your particular HRA.

How do I sign up for my HRA?

Your employer determines criteria for participating in an HRA. You sign up for your Health Reimbursement Arrangement (HRA) through your employer during your Open Enrollment period. Your human resources department or benefits administrator can help you get started.

What is an Excepted Benefit HRA (EBHRA)?

An excepted benefit health reimbursement arrangement (EBHRA) is arrangement under which your employer provides funds to help cover the cost of your vision, dental, or short-term, limited duration insurance premiums. You do not need to opt-in to your employer’s group health insurance coverage to be eligible for an EBHRA. Your employer will determine which types of excepted benefits insurance premiums are eligible for reimbursement (i.e. vision, dental, etc.) and the reimbursement amount that will be provided to you for the plan year.

EBHRAs provide a simple, flexible way for your employer to help fund insurance coverage for the excepted benefits for your choosing. Here are five simple steps to using an EBHRA:

  1. Enroll in the EBHRA account provided by your employer

  2. Ensure you are enrolled in eligible excepted benefits (i.e. vision, dental, etc.)

  3. Pay your monthly premium to your insurance carrier or provider

  4. Submit your reimbursement request (and required documentation) in your online account, mobile app* or through the mail

  5. Receive the reimbursement funds from HealthEquity

HealthEquity EBHRAs are designed to provide reimbursement for eligible excepted benefit insurance premiums only, such as premiums for vision, dental or short-term limited disability insurance. (General health insurance premiums are not eligible for reimbursement under an EBHRA.) Other types of expenses, beyond premiums, cannot be reimbursed in the HealthEquity EBHRA system. Your employer can also set certain guidelines for what is eligible for reimbursement, so if there is a specific question it is best to consult your employer.

EBHRA participation does not require you to enroll in your employers group health plan or any other health insurance plan. You must simply enroll in excepted benefits insurance coverage that is eligible under your employer’s plan (i.e. vision, dental, etc.).

If you do not yet have excepted benefits insurance coverage, you can enroll in coverage through any method you choose, such as the Health Insurance Marketplace (healthcare.gov) or through a private insurance company or broker.

If you have already been paying for your own, individual, excepted benefits insurance coverage (vision, dental, etc.), you do not need to change your coverage to meet the EBHRA requirement. You can simply maintain you current coverage and begin submitting reimbursement claims for the cost of eligible premiums.

When submitting an EBHRA reimbursement request, you will need to provide documentation that shows you paid for eligible insurance coverage for the months in which you are seeking reimbursement. To ensure prompt approval of your submission, please ensure that your proof-of-payment shows:

  • That coverage is current

  • Where the payment was sent

  • Date paid

  • Amount paid

  • All persons covered by the policy

*Note: Accounts must be activated via the HealthEquity website in order to use the mobile app.
HealthEquity does not provide legal, tax or financial advice.

What is an Individual Coverage HRA (ICHRA)?

An Individual Coverage Health Reimbursement Arrangement (ICHRA) is an arrangement under which your employer provides you with reimbursement funds to help cover the cost of your individual insurance premiums. Your employer determines the reimbursement amount that will be provided to you for the plan year.

This type of account gives you the flexibility to select the health insurance coverage that works best for you, while your employer helps cover the cost of your monthly premium.

To be eligible for reimbursement you must be enrolled in an individual health insurance coverage or Medicare A, B, or C coverage.

How does an ICHRA work?

ICHRAs provide a simple, flexible way for your employer to help fund your insurance coverage. Here are five simple steps to using an ICHRA:

  1. Enroll in the ICHRA account provided by your employer

  2. Ensure you are enrolled in individual health insurance coverage

  3. Pay your monthly premium to your insurance carrier

  4. Submit your reimbursement request (and required documentation) on the HealthEquity member portal, mobile app* or through the mail

  5. Receive the reimbursement funds from HealthEquity

Which types of expenses can be covered under an ICHRA?

HealthEquity ICHRAs are designed to provide reimbursement for qualified medical insurance premiums only. Other types of medical expenses cannot be reimbursed in the HealthEquity ICHRA system. Your employer can also set certain guidelines for what is eligible for reimbursement, so if there is a specific question it is best to consult your employer**

If I accept an ICHRA do I need to be enrolled in other health insurance coverage too?

Yes. If you accept the individual coverage HRA from your employer you (and any family members, if applicable) will need to be enrolled in individual health insurance coverage or Medicare. Other forms of insurance, such as short-term disability insurance or excepted benefits coverage (like dental or vision insurance) do not fulfill the requirement. You will be asked to provide evidence of your health care coverage when you submit your reimbursement.

How can I get individual health insurance coverage?

If you already have your own, individual health insurance coverage, you do not need to change your coverage to meet the ICHRA requirement.

If you do not yet have individual health insurance coverage, you can enroll in coverage through any method you choose, such as the Health Insurance Marketplace (healthcare.gov) or through a private insurance company or broker.

What documentation do I need to provide to show that I have ICHRA-eligible coverage?

When submitting an ICHRA reimbursement request, you will need to provide documentation that shows you paid for eligible insurance coverage for the months in which you are seeking reimbursement. To ensure prompt approval of your submission, please ensure that your proof-of-payment shows:

  • That coverage is current

  • Where the payment was sent

  • Date paid

  • Amount paid

  • All persons covered by the policy

If I am offered an ICHRA by my employer, am I still eligible for the premium tax credit?

It depends. If you have been offered an ICHRA by your employer, the only way you will qualify for a premium tax credit to help pay for Health Insurance Marketplace coverage is if your employer’s ICHRA is considered to be “not affordable” and you opt out of it.

Affordability of an ICHRA plan is based on the monthly premium for the lowest-cost Silver plan for self-coverage (in your area) compared to the monthly amount being offered by the ICHRA. Take the cost of the monthly premium of the Silver plan and subtract the monthly ICHRA amount offered by your employer. If the difference between the two is more than 9.78% of 1/12 of the employee’s household income for the year, the plan is not considered “not affordable”.

  • If the ICHRA offered is considered 'not affordable', you must actively opt out of the ICHRA to qualify for the premium tax credit (if you are otherwise eligible)

  • If the ICHRA is deemed 'affordable', you will not be eligible for the premium tax credit even if you opt out of the ICHRA.

Click here to download a simple worksheet to help determine if your ICHRA is considered affordable.

*Accounts must be activated via the HealthEquity website in order to use the mobile app.
** In addition to restrictions imposed by law, your employer may limit what expenses are eligible for reimbursements. It is the members' responsibility to ensure eligibility requirements as well as if they are eligible for the plan and expenses submitted.

*HealthEquity does not provide legal, tax or financial advice. Always consult a professional when making life changing decisions.

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