Direct answer
An HRA is an employer-funded account that reimburses employees for qualified medical expenses, but it depends on your specific employer’s plan design regarding whether funds roll over year to year. The money is tax-free for the employee, but you must submit documentation to be reimbursed for out-of-pocket costs.
IRS Publication 969 regarding Health Reimbursement Arrangements. For a comprehensive overview of tax-advantaged health plans, see the Internal Revenue Service’s official guide to Health Savings Accounts and other tax-favored health plans.
What this means for you
An HRA is an employer-funded account that reimburses employees for qualified medical expenses, but it depends on your specific employer’s plan design regarding whether funds roll over year to year. The money is tax-free for the employee, but you must submit documentation to be reimbursed for out-of-pocket costs.
FARMER STOCKMAN
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