An HRA is an employer-funded account to cover an employee’s eligible medical expenses. The HRA provides greater flexibility in plan design and employer control. Employees have the freedom to determine how and when their health-care dollars are used providing an incentive to become informed and responsible employees.

Advantages include:

• Funds contributed are deductible by the employer.
• Funds contributed are tax-exempt to the employee.
• Unused funds can be rolled over by the employee and carryover amounts limited by employer.
• The employer can limit portability.
• The employer can limit HRA services to those services covered under their traditional health plans.

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