Overview

You can use your Health Reimbursement Arrangement (HRA) funds to pay for a wide variety of eligible products and services for you and/or your spouse, and/or your dependents. The IRS determines which expenses can be reimbursed by an HRA Account, but it is the employer to determine the eligible expenses your HRA would cover.

Eligibility

Qualifying Person

Reimbursements under an HRA can be made to the following persons:

1. Current and former employees.
2. Spouses and dependents of those employees.
3. Any person you could have claimed as a dependent on your return except that:
   1. The person filed a joint return;
   2. The person had a gross income of $4,300 or more; or
   3. You, or your spouse if filing jointly could be claimed as a dependent on someone else’s tax return.
4. Your child under age 27 at the end of your tax year.
5. Spouses and dependents of deceased employees.

Note: Self-employed persons aren’t eligible for HRAs. Certain limitations may apply if you are a highly compensated participant. The qualifying person is determined by the employer.

Qualifying Expenses

Distributions from an HRA must be paid to reimburse you for Qualified Medical Expenses you have incurred. The expense must have been incurred on or after the date you are enrolled in the HRA. Qualified medical expenses are those specified in the plan that would generally qualify for the deduction of medical and dental expenses. These are explained in Pub. 502, Medical and Dental Expenses.

For more information, see Health Care Expenses (HSA/FSA).

Qualified medical expenses from your HRA include the following.

• Amounts paid for health insurance premiums.
• Amounts paid for long-term care coverage.
• Amounts that aren’t covered under another health plan.

Double Dipping

Per IRS Notice 2002-45, A medical care expense may not be reimbursed from an FSA if the expense has been reimbursed or is reimbursable under any other accident or health plan. If coverage is provided under both an HRA and an FSA for the same medical care expenses, amounts available under an HRA must be exhausted before reimbursements may be made from the FSA.

In no case may an employee be reimbursed for the same medical care expense by both an HRA and an FSA.