HRA FAQs
Q1: What is a Health Reimbursement Arrangement (HRA)?
A1: An HRA is like a bank account that your employer funds with pre-tax dollars that can be used to pay for certain types of medical expenses.
Q2: Who can contribute to an HRA?
A2: Only your employer can contribute pre-tax or tax deductible dollars to your HRA.
Q3: Who owns the HRA?
A3: Your employer owns the arrangement and determines the scope of how it is set up and used – including the amount you and each employee will receive. The HRA is not portable. If you change jobs, the arrangement and any funds stay with the employer.
Q4: How can HRA funds be used?
A4: Your employer may decide what types of medical expenses can be reimbursed through the HRA. Typically, reimbursable expenses can include deductibles, copays, coinsurance costs, prescription drugs, or other types of out-of-pocket costs. Check your Evidence of Coverage or plan materials for details about your specific HRA.
Q5: What happens to unused funds in the HRA?
A5: Most HRA funds “reset” at the beginning of the year, though some employers choose to rollover unused funds from year to year. Check your Evidence of Coverage or plan materials for details about your specific HRA.
Q6: How does the HRA debit card work?
A6: You use your HRA debit card at the time you pay for doctor’s services or when you purchase a prescription. The provider will use a debit card reader to swipe your card, check available funds, and submit the cost to be deducted from your HRA balance. If the cost is more than you have in your HRA account, you can swipe the debit card for the balance amount, and pay the remainder out of your pocket. If there are no funds in your HRA, the card will not work.
Q7: What if HRA funds are used to pay for items other than qualified or approved medical expenses?
A7: If you use HRA funds for something other than a qualified medical expense your employer has pre-approved, you will be asked to repay that amount to replenish the HRA or your debit card may be inactivated.
