What is a Health Reimbursement Arrangement (HRA)?

A Health Reimbursement Arrangement or Account (HRA) is an employer-owned and funded account. You can use this account to reimburse eligible medical expenses. You aren’t charged tax on any reimbursements you receive, but there is a maximum amount of money you can access.

Only your employer can contribute money to your HRA. The purpose of an HRA is to help make your healthcare more affordable.

This article will teach you about:

Eligible expenses

The IRS and your employer determine what expenses are eligible. Your employer sets limits on what expenses are eligible under your HRA plan.

In general, HRAs don’t cover any of the following:

Expenses from before your HRA start date
Expenses that another source covers (like your health insurance plan)
Nutritional supplements
Health club dues
Cosmetic surgery

How it works

If your employer offers an HRA, you might receive a physical card. You can use this card to pay for eligible expenses the same way you’d use a debit or credit card. If you pay for an eligible expense with your own money, you can submit a claim for reimbursement instead.

Note: You can't buy both eligible and ineligible items with your HRA card, even if they're part of the same purchase. You’ll need to make two separate purchases.

Example: Imagine you’re buying a prescription (eligible) and groceries (ineligible) at Walgreens. You need to buy your prescription using your HRA card, and buy your groceries with a different payment method.

Some things to keep in mind when using your HRA:

Your employer sets an annual limit for the amount of money available.
Your employer can choose whether your dependents can also use your HRA.
If you make a purchase with your HRA card, keep your receipts! The IRS may look into select expenses to ensure they’re eligible.

Can I access my HRA funds if I leave my employer?

Because your employer owns and contributes to your HRA, you can’t use these funds if you change or lose your job.

Can I use my HRA funds after my plan year has ended?

Your employer may choose to rollover some unused funds into the next plan year. This is up to your employer and isn’t required. If you’re unsure whether your employer offers rollover, you can ask our Customer Care team through Chat or email us at help@league.com.