A Health Reimbursement Arrangement (HRA) is an employer-funded health benefits account that reimburses employees for out-of-pocket medical expenses and in some cases for certain insurance premiums.
All HRA dollars are tax deductible for the employer, and income tax-free to the employee.
What Are the 6 types of HRAs?
- Qualified Small Employer HRA (QSEHRA)
A type of reimbursement arrangement that allows small companies with less than 50 full-time employees to reimburse tax-free for health insurance, Medicare, and dental and vision insurance. QSEHRAs do have an annual IRS limit per employee. QSEHRA also includes participation in a spouse’s or parent’s group plan. Limited benefit plans, that do not pay a cash benefit, are also included such as short-term plans, fixed indemnity plans, and accident plans. Learn more about QSEHRA with Benafica. - Individual Coverage HRA (ICHRA)
A type of reimbursement arrangement that allows employers of any size to make a tax-free contribution for employees’ individual health insurance and for other qualified medical expenses. ICHRAs have no limit, so employers can contribute as much or as little as they’d like to cover healthcare costs. ICHRA will satisfy the ACA employer mandate. Learn more about ICHRA with Benafica. - Excepted Benefit HRA (EBHRA)
A type of health reimbursement arrangement designed for employers to provide additional benefits to employees, beyond traditional health insurance. EBHRAs must be offered in conjunction with a traditional group health insurance plan, although employees are not required to be enrolled in the group health insurance to participate in the EBHRA. Employers in 2024 can contribute a maximum of $2,100 per year. An EBHRA can reimburse for dental and vision coverage, short-term coverage, and short-term disability income coverage. It can also reimburse other medical expenses. - Group Coverage HRA (GCHRA) or Integrated HRA
A type of reimbursement arrangement designed for employers who offer a traditional group health plan but want to enhance it with additional coverage. Must be offered in conjunction with a traditional group health insurance plan — usually a high-deductible plan. GCHRA reimburses employees tax-free to help cover their deductibles, co-insurance amounts, and other approved medical expenses. It can roll over from year to year. - Retiree HRA (RHRA)
A type of reimbursement arrangement that allows employers to reimburse retired employees for qualified medical expenses, such as premiums for individual health insurance or out-of-pocket healthcare costs, typically on a tax-free basis. Retiree HRAs help provide continued healthcare support after employees leave the workforce. Retirement expenses can include COBRA premiums, premiums for Medicare Part A, B, and D, and a Medicare Advantage Plan or Medicare Supplement plan. - Dental and Vision HRA
A type of reimbursement arrangement that allows employers to reimburse employees for eligible dental and vision expenses, such as premiums, treatments, or procedures, on a tax-free basis. Designed exclusively for employers who want to reimburse for Dental and Vision expenses. They can roll over from year to year.
If you think an HRA might be right for your business, contact Benafica today.