What characterizes a Health Reimbursement Arrangement (HRA)?

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Multiple Choice

What characterizes a Health Reimbursement Arrangement (HRA)?

Health Reimbursement Arrangements are employer-funded accounts used to reimburse eligible medical expenses on a tax-free basis. The defining features are that the funds come from the employer (not the employee), reimbursements to the employee are tax-free, and whether unused funds roll over to the next year depends on the plan design (many HRAs allow some rollover). This combination—employer funding, tax-free reimbursements, and potential rollover of unused funds—best matches what an HRA is.

Health Reimbursement Arrangements are employer-funded accounts used to reimburse eligible medical expenses on a tax-free basis. The defining features are that the funds come from the employer (not the employee), reimbursements to the employee are tax-free, and whether unused funds roll over to the next year depends on the plan design (many HRAs allow some rollover). This combination—employer funding, tax-free reimbursements, and potential rollover of unused funds—best matches what an HRA is.

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