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  Health Reimbursement Arrangements (HRAs) | HRA Information | HRA Case Study

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  All information is shown for illustration 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. $20 office visit copayment
  2. Hospital deductible of $1,500
  3. Employer-funded HRA of $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

  $750	Employer HRA contribution
  - $ 0	Hospital deductible expenses
  =$750	HRA funds roll over to Year 2

  
  Year 2

  $750	HRA rollover from Year 1
  +$750	Employer HRA contribution for Year 2
  =$1500	Total available HRA funds
  $8,500	Hospital admission expenses
  -$1,500	Deductible – paid by HRA
  $7,000	Expenses paid by plan benefits
  $ 0	No HRA funds roll over to Year 3

  
  Year 3

  $ 0	No rollover from Year 2
  +$750	Employer HRA contribution for Year 3
  =$750	Total available HRA funds

  In Year 1, the employee has no qualified medical expenses for which the HRA is used, so the employer’s entire $750 HRA contribution roll over to Year 2.

  Year 2 begins with an HRA balance of $1,500 – the $750 rollover amount combined with another annual employer HRA contribution of $750. The employee 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 Year 3.

  Year 3 begins with $750 in available HRA funds, representing 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.

  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-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

  • HRA Information
  • How an HRA Works
  • HRA Case Study
  • Key Advantages of an HRA
  • Tools to Evaluate HRAs
  • HRA FAQs