HRA (Health Reimbursement Arrangement)

An HRA is an account funded entirely by the employer that reimburses employees for qualified medical expenses. The employee doesn't contribute. The employer sets the annual amount, decides what's eligible, and controls whether unused funds roll over. It's a benefits design tool, not a savings account the employee owns.

HRAs come in several flavors. An integrated HRA sits alongside a group health plan and often pays deductibles or coinsurance — for example, an employer might offer a $5,000 deductible plan and fund a $2,500 HRA on top, effectively making it a $2,500 deductible plan without the higher premium. An ICHRA (Individual Coverage HRA) lets employers reimburse employees for individual market premiums instead of offering a group plan — increasingly popular with small employers who want to get out of the group health business. A QSEHRA is a smaller version for employers under 50 employees. HRAs are structurally attractive to self-funded employers because unused funds stay with the company at year-end.

The takeaway: if your employer offers an HRA, read the plan document carefully — the eligible expense list and rollover rules vary widely, and the money can't be taken with you when you leave.