This video gives an easy-to-understand explanation for Health Reimbursement Accounts as it relates to a health plan and its tax implications.
H.R.A. - HEALTH REIMBURSEMENT ARRANGEMENT
Money in an HRA can only be used to pay for eligible medical expenses incurred by employees and their dependents enrolled in an HRA. An employer may limit what expenses are eligible under an HRA plan.
H.R.A. definition from Healthcare.gov:
Health Reimbursement Accounts (HRAs) are employer-funded group health plans from which employees are reimbursed tax-free for qualified medical expenses up to a fixed dollar amount per year. Unused amounts may be rolled over to be used in subsequent years. The employer funds and owns the account. Health Reimbursement Accounts are sometimes called Health Reimbursement Arrangements.
As always, be sure to consult your CPA and Plan Administrator on the rules for limits, carry-overs, and allowable deductions for every plan year.
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