• The contribution cannot be paid through a voluntary salary reduction agreement on the part of an employee
• Employees are reimbursed tax free for qualified medical expenses up to a maximum dollar amount for a coverage period
• An HRA may be offered with other health plans, including FSAs

Key benefits of HRAs

• Contributions made to the employer are excluded from the gross income of the employee
• Any unused amounts in the HRA can be carried forward for reimbursements in later years

Qualifying for an HRA

• HRAs are employer-established benefit plans. These may be offered in conjunction with other employer-provided health benefits

• Employers have complete flexibility to offer various combinations of benefits in designing their plan. You do not have to be covered under any other health care plan to participate
• Self-employed persons are not eligible for an HRA
• Certain limitations may apply if you are a highly compensated participant

Contributions to an HRA

• HRAs are funded solely through employer contributions and may not be funded through employee salary deferrals under a cafeteria plan. These contributions are not included in the employee's income
• You do not pay federal income taxes or employment taxes on amounts your employer contributes to the HRA

Amount of contribution

• There is no limit on the amount of money your employer can contribute to the accounts
• The maximum reimbursement amount credited under the HRA in the future may be increased or decreased by amounts not previously used