What is a Health Reimbursement Arrangement (HRA)?
An HRA is a reimbursement account setup and funded by your employer to cover eligible healthcare expenses as defined in the HRA Summary Plan Document. Unlike a healthcare FSA where the IRS defines the eligible services, your employer defines the services eligible for reimbursement from an HRA. Typically, an employer will reimburse deductible, coinsurance and copay expenses from your HRA but not services such as medical, dental or over the counter drugs. An HRA can also cover all or a portion of your prescription drug expenses. Check your employer's HRA Summary Plan Document to see what types of services are covered under the HRA being offered by your employer..
Are insurance premiums an eligible expense?
Usually, they are not but an HRA is a special kind of reimbursement account so your employer may allow you to be reimbursed from your HRA for insurance premiums. Please refer to your employer's HRA Plan Document for coverage details.
If I terminate employment or retire, can I receive the remaining balance in my HRA?
No. However, you can continue to submit claims for reimbursement that were incurred prior to your termination date before the end of the run-out period (defined in your Summary Plan Description).
For example: Your plan has a 90-day run-out period following termination. Your termination date is September 13 th. Your physician sees you on September 12 th, but you do not receive the Explanation of Benefits from your insurance carrier until October 31 st. You can still submit this expense as it was incurred prior to your termination date, and prior to the end of the 90-day run-out period following your date of termination. Any expense incurred after September 13 is not eligible.
If I terminate employment or retire can I be reimbursed for expenses incurred after my termination date?
Typically, in order to be considered an eligible expense, the expense must be incurred prior to your termination date. However, you may be able to continue your HRA coverage under COBRA. Please refer to your employer's HRA Plan Document for more details.
How do I enroll?
To enroll in an HRA, you must elect the option through your employer. With some plans, HRA coverage is automatically provided when you enroll in a specific health plan option, such as a deductible based PPO. Check with your employer's benefit department for more details.
Is my family eligible to enroll in an HRA?
It depends. Typically, an HRA is offered as a reimbursement account to cover healthcare expenses incurred by your or your family members covered under the employer's insurance plan. Check with your employer's benefit department for more details.
How do I contribute money to my HRA?
That's the best part of an HRA - you don't need to contribute any money to your HRA as the funds are provided by your employer to offset your out-of-pocket healthcare expenses.
What happens if I don’t use all the money in my HRA?
Unlike a healthcare FSA which requires any unused funds to be forfeited, an HRA can be setup to roll your funds from one plan year to the next. If your employer offers "fund rollover" it will be described in your Summary plan documents.
Here's how HRA fund rollover typically works: At the end of the plan year, you will have a certain amount of time ("run-out period") to submit claims for services incurred during the prior year. At the end of the run-out period or at a date set by your employer, all or a portion of your remaining funds may rollover to the next plan year or to a carryover account. Your employer may set the following rules:
1) A Percentage of remaining funds may rollover, such as 50%. So, if you have $512 on the fund rollover date, you can rollover $256.
2) A Maximum amount may rollover, such as $250. Taking the example above, only $250 would rollover of the remaining $512.
3) A Percentage up to a Maximum, such as 50% up to $250. Again, $250 would rollover, using the example above. If you had $300 remaining, then only $150 would rollover (50% of $300).
4) All funds - all remaining funds may rollover to the next plan year.
What happens to the funds that are not rolled over?
Funds that are not rolled over remain in your HRA Account and can only be used for healthcare expenses incurred during that plan year. You have until the end of the run-out period to submit claims for reimbursement from your prior year HRA.
How do I submit a claim for my Health Reimbursement Arrangement Account?
You must complete a Request for Reimbursement Form and submit this form to us. You may also submit your claim data online. When submitting your claim online, you’ll have the opportunity to either upload scanned receipts or print a fax cover page to fax in with your documentation.
May I submit expenses for my spouse and children for reimbursement through my HRA?
Your HRA may stipulate that only expenses for dependents covered under the insurance plan are eligible for HRA reimbursement. Check your plan documents on claim eligibility.
What supporting documentation must I file with each HRA claim?
There are two main types of supporting documentation for HRA claims:
i. Explanation of Benefits (EOB):
Each time you submit claims to your health insurance carrier, you will receive this statement detailing what the health plan will pay and what you must pay. For expenses that are partially covered under another insurance plan, you must attach a copy of both of the EOBs.
ii. Itemized Bills:
For expenses that are not submitted to another insurance plan, you must attach a copy of an itemized billing containing the following information:
- Name of patient
- Name and address of provider
- Description of service
- Date of service
- Amount of service
How do I know why my claim was denied?
You will receive an email or letter indicating the reason for the denial along with instructions for submitting the requested documentation.
Why may the amount of my reimbursement differ from the amount of my request?
There are a few reasons that you may see a different reimbursement amount. A few of these are:
1. The request is for more than the balance of your account. For example:
Annual Election = $1,000.00
Total Amount Disbursed to Date = $700.00
Available Balance = $300.00
Total Amount of Request = $500.00
You will only be reimbursed $300.00, as this is your available balance.
2. Your HRA covers 50% of the eligible claim amount. For example, you have $300.00 in your account and you submit a claim for $100 applied to your medical dedutible. You will be reimbursed $50 (50% of the eligible amount).