Wondering what medical expenses are reimbursable through an HRA? Health reimbursement arrangements make it easy for employers to customize benefits for their employees. There are two main types of HRAs that make it possible to reimburse employees for qualified medical expenses in addition to health insurance premiums. Here's what to know about HRA eligible expenses.
Our HRA administrator platform makes it easy for employees to just snap a picture of their receipts for reimbursement. Employers have a lot of flexibility over what is reimbursed. Understanding the impact of these options can go a long way towards helping the employer achieve their objectives and keep their budget in check.
Here are a few choices employers can make:
HRAs must follow guidelines set forth by IRS Publication 502, Medical and Dental Expenses. Below is an excerpt of what is included in the manual. This is not a comprehensive list but it is a great start to understanding what the IRS considers eligible as a medical expense for tax-free reimbursement.
→ Learn how health insurance reimbursement works.
Over-the-counter medications and women's sanitary products are now tax-free with your HRA!
Abdominal supports • Abortion • Acupuncture • Air conditioner (when necessary for relief from difficulty in breathing) • Alcoholism treatment • Ambulance • Anesthetist • Arch supports • Artificial limbs • Athletic Braces and Supports • Autoette (when used for relief of sickness/disability) • Bandages • Baby Sunscreen • Baby Thermometers • Birth Control Pills (by prescription) • Blood Glucose Monitors and Test Strips • Blood Pressure Monitors • Blood tests • Blood transfusions • Braces • Breast Pumps and Accessories • Cardiographs • Children's First Aid • Children's Sunscreen • Chiropractor • Christian Science Practitioner • Condoms • Contact Lenses and Lens Solution • Contraceptive devices (by prescription) • Convalescent home (for medical treatment only) • Crutches • Dental Treatment • Dental X-rays • Dentures • Denture Cream and Cleansers • Dermatologist • Diabetes Care Accessories • Diagnostic fees • Diathermy • Drug addiction therapy • Drugs (prescription) • Elastic hosiery (prescription) • Eyeglasses • Eye Glass and Lens Accessories • Fees paid to health institute prescribed by a doctor • First Aid Kits • First Aid Treatment and Supplies • Fluoridation unit • Glucosamine Supplements • Glucose Tablets • Guide dog • Gum treatment • Gynecologist • Healing services • Hearing aids and batteries • Heating Pads and Wraps • Home Medical Equipment • Hospital bills • Hot and Cold Packs • Hydrotherapy • Incontinence Products • Insulin treatment • Lab tests • Lead paint removal • Legal fees • Lip Balm • Lodging (away from home for outpatient care) • Medical Monitoring and Testing Devices • Motion Sickness Aids • Metabolism tests • Nasal Spray • Neurologist • Nursing (including board and meals) • Obstetrician • Operating room costs • Ophthalmologist • Optician • Optometrist • Oral surgery • Organ transplant (including donor’s expenses) • Orthopedic and Surgical Supports • Orthopedist • Osteopath • Oxygen and oxygen equipment • Pediatrician • Physician • Physiotherapist • Podiatrist • Postnatal treatments • Practical nurse for medical services • Pregnancy and Fertility Tests • Prenatal care • Prenatal Vitamins • Prescription medicines • Psychiatrist • Psychoanalyst • Psychologist • Psychotherapy • Radium Therapy • Reading Glasses and Magnifiers • Registered nurse • Shoe Insoles and Inserts • Special school costs for the handicapped • Spinal fluid test • Splints • Sterilization • Sunscreen • Surgeon • Telephone or TV equipment to assist the hard-of-hearing • Therapy equipment • Thermometers • Transportation expenses (relative to health care) • Ultra-violet ray treatment • Vaccines • Vaporizers and Inhalers • Vasectomy • Vitamins (if prescribed) • Walking Aids • Wheelchairs and Accessories • X-rays
This list still has the potential to change, through advancements such as the CARES Act, which updated eligible medical expenses to includes over-the-counter drugs and products like tampons and pads.
These are some items that we commonly see submitted for reimbursement that require a doctor's Letter of Medical Necessity in order to be reimbursed:
Similarly to those listed above, the items on this list are not considered eligible medical expenses.
Chat with our team with any questions you may have about these tax-friendly health reimbursement arrangements or HRA eligible expenses.
This post was originally published in 2020 and has been updated with new information and insights for 2023.