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Songer Benefits, Inc. Blog

All You Ever Wanted to Know About Insurance

Health Reimbursement Arrangements

HRA Basics 

• A Health Reimbursement Arrangement is authorized under the IRS Code section 105. These plans are funded solely by the employer to help employees pay for out-of-pocket medical expenses. 
•An HRA allows an employer to buy less insurance but deliver the same quality benefits. 
• Expenses reimbursed by the employer through an HRA are not taxable for income or payroll tax purposes to the employee. 
• The employer determines the plan year benefit amount to be reimbursed and what expenses to reimburse. 
• Employees may not add their own money to the account. 
• Unused balances cannot be converted to cash 
• An employer must allow employees to opt-out of the benefit at least annually.

For more information on HRA's, please contact Songer Benefits, Inc. In Beckley, West Virginia.