Learn about Individual Coverage Health Reimbursements

categories: Blog

Health Reimbursement Arrangements (HRAs) are employer-sponsored health plans that allow employees to be reimbursed for expenses related to their healthcare up to a certain dollar amount each year. The employer funds them, and the money can be rolled over for future use.

A business can provide a personal coverage HRA instead of the conventional small businesses health insurance that satisfies the necessary criteria of price and value.

Employees and their family members with an individual coverage HRA plan from their employer are only eligible for a tax credit if their employer does not provide the necessary coverage at an affordable rate and the employee decides not to take the individual coverage HRA.

How an HRA Works

The employers deposit a set amount of money into the employee’s HRA account each year, which can pay for medical bills, such as doctor visits, prescriptions, and other medical expenses. The employee owns the money in the account, and any remaining funds can be rolled over to the next year.

Employees can receive tax-free reimbursements from their employer for their medical expenses, up to the maximum amount established by the organization, for a fixed period.

Workers may be permitted to keep unused funds from their benefits package, which can be carried forward to the next year.

Employers can offer small businesses health insurance benefits that cover not only the employee but also those who are part of the employee’s family, such as spouses, children, and other dependents.

You will receive a notification from your employer if they offer personal coverage HRA. This notification will detail the provisions of the offer and if it extends to other people in your household.

Learning You’re Eligible for an HRA

If your employer offers Individual Coverage HRA, you can use pre-tax dollars to pay for medical expenses. You will receive a notice outlining the details of the HRA and how you can access your funds.

So if a person has a family, each member can receive an HRA to cover their healthcare costs.

Your employer will provide a certain amount to cover medical expenses for you and any of your family members in your household.

The start and end dates of the personal HRA are specified. Additionally, regulations for signing up for other medical insurance and how they may affect insurance coverage through the Marketplace are outlined.

Your employer must give you adequate notice before starting the individual coverage HRA plan year. If you become eligible for the HRA plan within 90 days of the year’s beginning, the employer must notify you before the start of the coverage.

Enrolling in One


You can use your coverage HRA if you have a Medicare Part A and Part B, a Medicare Advantage Plan, or enroll in individual market health insurance, starting no later than the HRA. Insurance plans only for a short period, such as those that cover dental or vision care but not other medical services, must meet the minimum health insurance coverage requirements.

If you and eligible family members have acquired individual health insurance coverage, there is no need for alterations to meet the HRA’s health coverage requirement. If you’re applying for a Marketplace plan, you can find out more information at HealthCare.gov/marketplace-in your-state.

A Medicare Part A and B or a Medicare Advantage Plan must also meet the HRA’s coverage requirement. Visit Medicare.gov/basics/get-started-with-medicare for more information.

In Closing

An HRA may be a more attractive benefit since it provides immediate reimbursements for you and your family after a trip to the hospital or a major procedure. It is always best to weigh the options to determine if this benefits you or your loved ones with whom you want to enroll.

Learn about Your Options with guHRoo

guHRoo is devoted to aiding small companies in South Carolina’s Columbia, Charleston, and Greenville areas with dependable human resources and payroll systems. Our services are designed to make managing HR and payroll a breeze, enticing employees to stay in your company. Learn more about small businesses health insurance options by clicking the “Schedule Demo” button on our home page!


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