Health Reimbursement Arrangements (HRAs)

HRAs were created in June of 2002 through Internal Revenue Service guidance (Rev. Rul. 2002-41 and Rev. Not. 2002-45). HRAs are individual medical expense reimbursement accounts that roll-over year-to-year.

HRAs are commonly coupled with a High Deductible Health Plan (HDHP) although there are no specific health plan requirements to adopt an HRA. In some cases, employers may establish an HRA that reimburses postemployment premiums and non-insured medical expenses. These types of plans are often called, Retiree Medical Accounts (RMAs) or Retiree Reimbursement Accounts (RRAs). Notional in nature, these programs are funded only when the retiree presents a claim for reimbursement. Notional claim reimbursements for incurred medical expenses and/or premiums are not taxed, saving money for both the employer and participant.

HRAs can also be coupled with a trust instrument creating, in essence, a “Funded HRA”. These types of HRAs are funded on a regular basis by employer contributions to a trust, commonly a VEBA Trust or a Section 115 Integral Part Trust for governmental employers. In many cases plan participants are given investment choices much like a retirement plan. As with notional HRAs described above, Funded HRAs can be coupled with a high deductible health plan or can be designed as postemployment  Retiree Medical Savings Accounts (RMSAs). The advantage of this design is that it is triple-tax free; employer contributions are not taxed, earnings of the invested assets are not taxed, and claim reimbursements are made without taxation.

• Consumer-Directed Health
• Retiree Premium and Expense Reimbursement
• Funded HRAs

Nobody knows HRAs better than Genesis. We have been administering HRAs since the tax code allowed them back in 2002. Our staff includes some of the pioneering people who helped create HRAs. We are well known for our popular America’s VEBA Solution products which were launched in September of 2002.

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