6 Types of HRAs You Should Know

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 to the employer, and income tax-free to the employee.

What are the 6 types of HRAs?

1. Qualified Small Employer HRA (QSEHRA)
   Allows small employers under 50 employees to reimburse tax-free for health insurance, Medicare, and dental and vision insurance. 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.
2. Individual Coverage HRA (ICHRA)
   Allows employers of any size to make a tax-free contribution of any size for individual health insurance and for other qualified medical expenses. ICHRA will satisfy the ACA employer mandate.
3. Excepted Benefit HRA (EBHRA)
   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.
4. Group Coverage HRA (GCHRA) or Integrated HRA
   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.
5. Retiree HRA (RHRA)
   RHRA are designed to help retired employees pay for plan-eligible medical expenses during retirement. Retirement expenses can include COBRA premiums, premiums for Medicare Part A, B, and D, and a Medicare Advantage Plan or Medicare Supplement plan.
6. Dental and Vision HRA
   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.