Who determines the eligibility and contribution limits of a Health Reimbursement Arrangement (HRA)?

The determination of eligibility and contribution limits for a Health Reimbursement Arrangement (HRA) is primarily the responsibility of employers. HRAs are employer-funded health benefit plans that reimburse employees for incurred medical expenses and, unlike health savings accounts (HSAs), the contributions to an HRA are entirely funded by the employer.

Employers have the discretion to decide which employees are eligible to participate in the HRA program, meaning they can set criteria such as employment status or length of service. Additionally, employers can determine how much they will contribute to the HRA, establishing limits on reimbursements based on their budget and policy objectives.

This employer control over HRAs is a fundamental aspect of how these arrangements are designed and implemented, reflecting the employer's role in offering health benefits to their employees. In contrast, while policyholders, insurance regulators, and employees may have roles or interests in health benefits, it is the employer that ultimately has the authority to define the terms of the HRA.