The Congressional Research Service released an overview and history of Health Reimbursement Arrangements (HRAs).
An HRA is a tax-advantaged account for a present or former employee that is used to reimburse participants for qualified medical expenses. Qualified medical expenses include
HRAs allow individuals to use employer-provided funds to cover the cost of health insurance and unreimbursed medical expenses up to a specified limit. The employer contributes money to an employee’s HRA and that money is used for reimbursements. Employer contributions to an HRA are not included in an employee’s income and distributions for qualified medical expenses are tax-free.
There are 5 types of HRAs:
The CRS publication describes each type of HRA and provides useful information for employers who have or are considering an HRA. The publication may be accessed by clicking here.