Definition
A Health Reimbursement Arrangement (HRA) is an employer-funded, tax-advantaged account used to reimburse employees for qualified medical expenses and, in some HRA types, health insurance premiums. Unlike HSAs, HRAs are entirely employer-funded — employees cannot contribute. HRAs are also employer-owned, meaning unused balances can roll over at the employer's discretion and are forfeited if the employee leaves. The major types include the traditional integrated HRA (paired with a group health plan), the ICHRA (paired with individual coverage), and the Qualified Small Employer HRA (QSEHRA) for employers with fewer than 50 employees.
What This Means for Employers
HRAs are a flexible tool for bridging the gap between what your health plan covers and what employees can afford to pay out of pocket. Integrated HRAs paired with high-deductible plans can offset employee cost-sharing without changing the plan structure. The employer controls contribution amounts, which items qualify for reimbursement, and whether unused funds roll over — giving you significant design flexibility. Because HRA funds are owned by the employer and not portable, they are more complex to administer than HSAs but offer greater employer control.
Ready to apply this to your health plan?
Understanding the terminology is the first step. Applying it to your specific situation —
your workforce, your current plan, your cost drivers — is where real change happens.
Schedule a Conversation