HRA Frequently Asked Questions

General Information

Q. What is an HRA?
A. An HRA is a federally authorized funding method that gives employers the option to reimburse employees for a portion of their health care expenses.

Q. Can the employee contribute to an HRA either directly or through salary reduction?
A. No, an HRA is solely employer funded. 

Q. Must an HRA be combined with a high deductible plan?
A. No, HRAs can be independent of a major medical plan. If combined with a major medical plan, an employer is not restricted to a particular type of plan that accompanies the HRA. However, an employer's savings may be maximized with a high deductible plan.

Q. Must an employee participate in health insurance coverage to receive an HRA?
A. There is no legal requirement, but an employer can require an employee to participate in health insurance in order to receive the HRA.

Q. Can an employer pay out any cash balance from an HRA to an employee who is terminating?
A. No. However, an employer can set up the HRA so that when employees retire, the remaining balance can be used to pay for retirees' medical expenses.

Q. Can an employer continue to reimburse a former employee for medical expenses after termination?
A. Yes, if the employer sets up the HRA to do so.

This form is designed to provide information regarding Health Reimbursement Arrangements (HRAs) and how they can be used with high deductible plans. It is provided with the understanding that Assurant Health and its subsidiaries do not establish or administer HRAs and are not engaged in rendering tax or legal advice. Assurant Health disclaims any and all liability for creation or administration of HRAs. If tax or legal advice is required, seek the services of a professional advisor.

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