A Heath Reimbursement Arrangement, HRA, is a popular employee benefit plan that allows employees to use pre-tax dollars to pay for qualified medical expenses and individual insurance premiums. HRAs are a great way for employers and employees to save on healthcare costs. How they work is once an employer decides on an HRA type and plan design, employees submit for reimbursement on qualified medical expenses. This guide will show you how to get the most out of your HRA by knowing the ins and outs of eligible HRA expenses.
First, let’s understand the two most common types of HRAs and how they function.
QSEHRA: The Qualified Small Employer Health Reimbursement Arrangement is designed for employers with less than 50 full-time employees. An employer has the flexibility to design the plan to cover either certain qualified medical expenses and/or individual health insurance premiums.
ICHRA: The Individual Coverage Health Reimbursement Arrangement is for employees of any size; however, reimbursements must be used toward health insurance premiums purchased on the exchange. Depending on the employer, they may also opt to include certain qualified medical expenses for reimbursement in addition to the cost of premiums.
Qualified medical expenses for an HRA are those that would be eligible for reimbursement under a typical major medical plan. This includes deductibles, copayments, coinsurance, or out-of-pocket costs. In addition, qualified medical expenses for an HRA can also include dental and vision care expenses, as well as prescription drugs. The list of qualified medical expenses is determined by IRS; see IRS Publication 502.
Health Reimbursement Arrangements (HRAs) are designed to give employees more flexibility in managing their healthcare expenses. Understanding what is covered under an HRA is crucial for maximizing this benefit. Here’s a breakdown of the types of medical expenses typically eligible for reimbursement through an HRA.
HRAs typically cover various medical expenses, including visits to healthcare professionals, hospital services, lab tests, and preventive care. These expenses are considered HRA-eligible if necessary for disease diagnosis, cure, mitigation, treatment, or disease prevention. Expenses like doctor's visit co-pays are also covered under most HRAs, answering the common question, "Does HRA cover copay?" with a yes.
Dental care is another category frequently covered by HRAs, encompassing services like dental checkups, cleanings, fillings, extractions, dentures, and orthodontics. These services must primarily alleviate or prevent a dental ailment or disease. Cosmetic dental procedures, however, are typically not considered HRA-qualified expenses unless they are necessary to treat a medical condition.
Vision care is also commonly reimbursable through an HRA. This includes expenses related to eye exams, prescription eyewear, contact lenses, and even corrective procedures like LASIK. If you're wondering, "Can I use HRA for glasses?" the answer is generally yes, as long as a healthcare professional prescribes the glasses.
To expand upon the three primary categories above, here is a comprehensive list of HRA qualified expenses.
General Medical:
Dental:
Vision:
Over-the-Counter:
Specialty Services:
Medical Devices:
Procedures and Treatments:
Miscellaneous:
Some qualified expenses need a prescription or a note from a doctor to be eligible for reimbursement.
Supplements and Nutritional Support:
Specialized Therapies and Treatments:
Medical Devices and Services:
Professional and Supportive Services:
There are many different kinds of insurance premiums. The IRS has also listed which premiums qualify as medical expenses.
The IRS also guides what can’t be deducted as an HRA qualified medical expense.
Non-Qualified Expenses:
If you still have questions, Take Command’s platform allows employees to upload their eligible expenses for ease of approval and reimbursements. You can also chat with us on our website or email support@takecommandhealth.com. We'd be happy to help!
Navigating the specifics of Health Reimbursement Arrangements (HRAs) can often lead to questions about what can be covered. Below are answers to frequently asked questions that can help you understand the extent of your HRA coverage.
Yes, you can use your HRA for glasses. HRAs typically cover vision care, which includes prescription eyeglasses. You can submit the receipt to your HRA for reimbursement if you purchase prescription glasses. However, non-prescription sunglasses or cosmetic eyewear are generally not covered unless a medical professional prescribes them explicitly for a medical reason.
HRAs often cover copayments for office visits, prescriptions, and other healthcare services. If you have a copayment for a doctor's visit or a medical procedure, you can submit that expense to your HRA for reimbursement. This can significantly reduce your out-of-pocket medical costs throughout the year.
Generally, you can use your HRA for medical travel expenses when such travel is primarily for and essential to receiving medical services. This can include transportation and lodging costs associated with medical care, such as a hospital stay or outpatient surgery. It's important to keep detailed records and receipts of your travel expenses, and the travel must be a qualified medical expense as per IRS guidelines. Always check with your HRA plan administrator for specifics, as coverage for travel expenses can vary depending on the plan's terms.
Yes, HRAs typically cover dental care expenses. This includes routine dental cleanings, exams, fillings, and primary services like crowns, bridges, and root canals. Orthodontics and dentures are also generally covered. Cosmetic dental procedures, however, may not be eligible unless they are necessary for medical reasons.
Many over-the-counter (OTC) medications and health products are reimbursable with an HRA, provided you have a prescription from your healthcare provider. This includes OTC allergy medications, pain relievers, and first-aid supplies like bandages. Always retain the prescription and receipt for reimbursement purposes.
Updated for 2024