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  Learn About Health Savings Accounts (HSAs) and Health Reimbursement Arrangements (HRAs) | Health Reimbursement Arrangements (HRA's) | HRA Case Study

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  All information is shown for example purposes only as a way to explain some general rules about how HRA arrangements work. It does not necessarily reflect actual charges, plan or account rules, or the arrangement your employer will offer you. Your experience may be different. The illustration is based on a hypothetical health plan with:

  1. a $20 office visit copayment
  2. a hospital deductible of $1,500
  3. The employer has funded the HRA at $750 per year.

  AN HRA EXAMPLE

  1. $20 Office Visit Copayment
  2. $1,500 Hospital Deductible Plan
  3. $750 Employer annual contribution to HRA
  Year 1

  	Employee
  HRA contribution	$750
  No hospital deductible expenses — $750 HRA funds roll over to next year

  
  Year 2

  	Employee
  HRA rollover from Year 1	$750
  HRA contribution Year 2	$750
  Total available HRA funds	$1,500
  Hospital admission expenses	$8,500
  Deductible — paid by HRA	$1,500
  Plan pays	$7,000
  No HRA funds roll over to next year

  Year 3

  	Employee
  No rollover from Year 2	$0
  HRA contribution Year 3	$750
  Total available HRA funds	$750

  In the first year, the individual has no qualified medical expenses for which the HRA is used, so the employer’s entire $750 HRA contribution rolls over to the second year.

  The second year begins with an HRA balance of $1,500—the $750 rollover amount combined with another annual employer HRA contribution of $750. The individual is admitted to the hospital and is responsible for the $1,500 plan deductible. This amount is paid with the HRA, leaving no funds to roll over to the next year.

  The third year begins with $750 in available HRA funds, following the employer’s annual contribution.

  Note: If available HRA funds are less than the health care expenses subject to the deductible, you must pay the balance of the deductible amount out of your own pocket. Your employer decides how much money to put in the HRA, and you must pay any health care expenses which exceed the amount available in the HRA at any time.

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  In This Section

  • High Deductible Health Plans (HDHP) & Health Savings Accounts (HSA's)
  • Health Reimbursement Arrangements (HRA's)
  • How an HRA Works
  • HRA Case Study
  • Key Advantages of an HRA
  • Tools to Evaluate HSAs
  • FAQ's
  
  
  

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