Health Insurance
HRA (Health Reimbursement Arrangement)
Unlike an HSA or FSA, an HRA is funded entirely by the employer and reimburses employees for medical costs up to a set annual limit.
Last reviewed: May 2026 · Editorial methodology
Definition
A Health Reimbursement Arrangement (HRA) is an employer-funded benefit account that reimburses employees tax-free for qualified medical expenses, and in some HRA types, for individual health insurance premiums. Unlike HSAs or FSAs, employees cannot contribute their own money to an HRA — only employers fund them. The most common forms include the Qualified Small Employer HRA (QSEHRA), which allows small businesses to reimburse individual market premiums up to $6,350 (self-only) or $12,800 (family) in 2026, and the Individual Coverage HRA (ICHRA), which has no dollar cap and can be offered by employers of any size. Unused HRA funds may roll over to the next year at the employer's discretion, giving them more flexibility than FSAs. Employees do not pay income tax on reimbursements received, making HRAs a powerful tool for businesses that cannot afford group health insurance. ICHRA eligibility affects marketplace premium tax credit eligibility, so employees should compare options carefully.
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Cover Forge USA Editorial Team
Editorial Lead
This article was researched and written by the Cover Forge USA editorial team against federal sources (NAIC, CMS, FEMA, DOL, SSA, state DOIs) and standard policy forms. Bylines organize content by topic — they do not assert individual licensure. See our editorial-policy for details.
Reviewed 2026-06-14
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