Health Reimbursement Accounts

Health Reimbursement Account (HRA)

Health Reimbursement Accounts are one of the most effective ways for public and private employers to offer health benefits to employees in today’s environment of continually increasing health costs. HRA’s (also known as Health Reimbursement Accounts) are the basis for many consumer driven health plans. Health Reimbursement Accounts are essentially plans that are funded solely by employers and that allow reimbursement for substantiated medical expenses.

These plans, which were recognized by the IRS in June of 2002 provide many benefits which were not available in other health plans. Amounts that are provided by employers are tax free. These benefits are not wages and accordingly are not subject to income taxes, FICA, or workers compensation. Unlike Flexible Savings Accounts, unused benefits may rollover from year to year and may be accumulated to pay for future expenses. Although separate accounts do not have to be set up, our program uses individual accounts for convenient and cost effective administration. Each employee now has the opportunity to customize and optimize their own health benefits as they see fit and with no additional cost to the employer.