Understanding HRA’s
One of the newest insurance products is something known as an HRA or Health Reimbursement Arrangement. If you haven’t heard about this latest innovation in health insurance, you might want to take a moment and learn more.
On the surface, an HRA looks like an HSA or Health Savings Account. The both are tied to a savings account and a high deductible health insurance product. Contributions and withdrawals for approved health related expenses are tax deductible. Some key differences will immediately identify where the two plans diverge:
1) The HRA plan is not available as an individual insurance product.
2) The employee may not contribute into the savings account. All contributions are done by the employer.
3) The amounts in the savings account will be forfeited if you lose your job. You may request reimbursement for any expenses that were incurred but not tendered during the term that coverage was in place.
4) Your HRA account is not eligible to receive interest.
For more information, check out IRS HRA Information.