Health Reimbursement Arrangements (HRAs)
May 2, 2017
HRAs are an attractive option for employers and employees due to their tax-favored status. Employers may take a federal income tax deduction for HRA contributions. The value of the HRA is not taxable to employees. Reimbursements received are excludable from employee income. There are specific rules regarding eligibility, contributions and reimbursements; ACA market reform has substantially narrowed the types of HRAs permitted. This compliance overview outlines the HRAs currently allowed under ACA.