[#] Details about Health Reimbursement Accounts

Health reimbursement accounts (HRAs) are consumer-driven health plans that are used to reduce qualified or unreimbursed medical expenses. A qualified or unreimbursed medical expense is one that is not paid for by a person’s regular health insurance coverage. These accounts are funded in behalf of an employee or employees and can be used to pay for such expenses as deductibles, coinsurance requirements, eyewear, examination fees and other fees and expenses.

Employer Funded Accounts

HRAs are employer-funded accounts. An employer who establishes HRAs for their employees, in addition to the health insurance plan being provided, places money into individual accounts or each employee. The accounts are similar to individual retirement plans or IRAs and subject to the same rules under ERISA as retirement plans are. The money in the account can be accessed by an employee but only for the purpose of meeting certain medical expenses.

Subject to COBRA Requirements

Under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), when an employee separated from employment, they are permitted to continue in an HRA and receive funding for a minimum of up to18 months. This is provided that the employee elected to continue participating in the employer’s health plan after leaving the business and pays the 102 percent COBRA premium.

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