Health Reimbursement Arrangements (HRA)

Health Reimbursement Arrangements are an employer tool and operate according to IRS Section 105 regulations. They are used for the tax-preferred reimbursement of qualified medical expenses for employees as defined by Section 213d of the IRS code or a narrower list of services covered as defined by the employer.

During the plan year, employees access these tax-preferred funds with a debit card, or file paper claims. Should an employee have a positive balance in their HRA at the end of the plan year, that amount can be rolled over in full, capped at a pre-determined maximum amount, or completely eliminated at the employer’s discretion. The employee should also provide proof of purchase to the HRA administrator to verify the funds were spent on eligible medical expenses.

If an employee terminates employment during the plan year, coverage for qualifying expenses will end at the date of termination. The HRA is a COBRA-eligible benefit and can be elected by the employee when they terminate employment.

Coaches' Takeaway

The employer establishes the plan year, determines the maximum amount available by eligibility tier (individual, family, etc.), and also decides whether the HRA funds will roll over, cap at a certain dollar limit, or be eliminated altogether.

Administration of the HRA is usually delivered by a third-party administrator (TPA) and the cost is typically determined on a per-participant per-month fee.

Tools & Resources

CDHPCoach’s Storage Facility, where the Coach has organized and compiled a vast amount of tools and resources for you to access.


Housed here are key components and information within the book, Bend the Healthcare Trend which was the impetus behind the CDHPCoach.