Health Reimbursement Arrangements (H.R.A.) are unique tools that employers can use to provide health benefits to their employees. The H.R.A. concept is not new, but were phased out during the Obama years when the Affordable Care Act (ACA) was implemented. Several very business friendly provisions were brought back to the marketplace under President Trump, including the creation of the Individual Coverage Health Reimbursement Arrangement (ICHRA) that became law on January 1, 2020. There are a several types of H.R.A.s, however a few features are common to each one.
All H.R.A. plans are offered by employers to employees. All H.R.A. plans provide for the employer to allocate an allowance that is to be used by the employee to offset health care related expenses. All H.R.A. plan allowances are tax deductible by the employer and, in the vast number of instances, are tax exempt to the employee. There are unique differences that H.R.A.s have as well. Those differences will be illustrated on the following pages.
Click the links below to see each one.