Health Retirement Account

HRA Defined

How Does an HRA Work?

An HRA is a program that is fully funded by your employer and is designed to help you pay for out-of-pocket medical expenses.

Your employer puts money into your HRA and you choose how your healthcare dollars are spent. 

Your employer puts money into your HRA and you choose how your healthcare dollars are spent.

At the beginning of each plan year, your employer will notify you of the amount they will contribute to your HRA for that plan year.

Yes. All eligible employees must enroll each year during the open enrollment period. Your employer will instruct you on how to complete enrollment.

Yes, as long as your dependent meets the definition of a dependent as defined by the IRS and is included in your employer’s plan.

Routine health care: office visits, X-rays, and lab work.

Hospital expenses: room and board, and surgery.

Medications: prescription and over-the-counter (OTC) drugs when prescribed by a physician

Dental care: cleanings, fillings, crowns

Vision care: eye exams, glasses, contacts

Copays and coinsurance (the portions of health care bills paid by you)

Eligible over-the-counter (OTC) items2 such as: First Aid Dressings and Supplies –bandages, rubbing alcohol

Contact Lens Solutions/Supplies

Diagnostic Products like thermometers, blood pressure monitors, cholesterol testing

Insulin and Diabetic Testing Supplies

Contact your Plan Administrator for more information or visit for more details.

For thousands of employers, offering health benefits to their employees has been out of their company budget due to the high cost of insurance plans. That all changed in January 2020, when the Individual Coverage Health Reimbursement Arrangement (ICHRA) became available to businesses and organizations of all sizes. 

How does an ICHRA work?

As the name implies, ICHRA is based on reimbursing employees for insurance rather than buying it for them. At a high-level, the way ICHRA works is very simple:

  1. Employers design their plan, including defining which employees are eligible and establishing reimbursement limits
  2. Employees purchase the individual plans they want
  3. Employees submit claims for reimbursement
  4. Employers reimburse employees for valid claims

Our Benefits Division, B3PA manages all benefits administration plans. Please feel free to visit B3PA’s website for additional insurance information and benefit solutions for employers and brokers.

What is an HRA?

The HRA (Health Reimbursement Account) is an employer-sponsored plan to reimburse a portion of you and your eligible family member’s out-of-pocket medical expenses, such as deductibles, coinsurance, and pharmacy expenses.

Your employer has designated a specific dollar amount to credit to the account (either monthly or annual contributions). You choose which out-of-pocket qualified medical expenses you would like to submit for reimbursement. 

Furthermore, unused account balances roll over to the following plan year, provided your employer continues to offer the program, and you remain enrolled in it. Unspent account balances will roll over to the next plan year, provided your employer continues to provide the program, and you remain enrolled in it.

What is a QSEHRA?

Small employers who don’t offer group health coverage to their employees can help employees pay for medical expenses through a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA). If your employer offers you a QSEHRA, you can use it to help pay your household’s health care costs (like your monthly premium) for qualifying health coverage. You can find more detailed information on the site. 

What is an ICHRA?

Starting in January 2020, employers can use the Individual Coverage HRA, which provides more flexibility for employers of all sizes. For example, a large company that provides group insurance for full-time employees may offer ICHRA benefits for part-time or seasonal employees.

With this HRA type, employers fund a monthly allowance to reimburse ICHRA-eligible employees for qualified medical expenses and health insurance premiums. To qualify for reimbursements from an ICHRA, employees must be enrolled in an individual health insurance plan and cannot receive premium tax credits.

HRA, QSERAs, ICHRAs and EBHRAs Comparison Chart
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Member Registration Information to Purchase HRA and QSEHRA Services

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