A Health Reimbursement Arrangement (HRA) is basically a plan your employer sets up to pay for some of your medical costs. Only your employer puts money in it. You can’t add your own money. They might let you use it for doctor visits, prescriptions, insurance premiums, or other medical stuff.
The first thing to know is that the money you get from HRA usually doesn’t count as taxable income. But how it works exactly depends on what your company decides. You can see these amounts on your pay stub if the payroll system tracks it.
How Health Reimbursement Arrangement (HRA) Works
- The employer puts a certain amount in your HRA every year.
- You spend it on approved medical expenses.
- You file for reimbursement and they pay you back from the account.
- Some plans let you roll over leftover money, some don’t.
- You don’t get cash or anything extra, it just pays for your health stuff.
Types of HRA (Health Reimbursement Arrangement) Plans
| Type | What it does | Rollover? | Notes |
| Standard HRA | Pays eligible medical expenses | Maybe | Most normal one |
| Integrated HRA | Works with insurance | Sometimes | Only covers what insurance doesn’t |
| Retiree HRA | For retirees | Maybe | Helps cover retiree medical costs |
| QSEHRA | Small business plan | Sometimes | Can pay premiums and medical costs |
Health Reimbursement Arrangement (HRA) vs Other Health Accounts
- HSA: Both employer and employee can put money, portable, needs high deductible plan.
- FSA: Employee and employer put money, usually “use it or lose it.”
- HRA: Only employer money, may roll over if company allows, not portable if you leave.
For payroll, HRA reimbursements are non-taxable, unlike things like GTL imputed income or pre-tax deductions.
Payroll and HRA (Health Reimbursement Arrangement)
When tracking HRA in payroll:
- Shows up as non-taxable benefits on pay stubs.
- Affects YTD tax totals.
- Works with other deductions like 401k contributions or post-tax deductions.
If you want to show HRA reimbursements clearly on pay stubs, you can do it easily with our Free Paystub Generator.
FAQs About HRA (Health Reimbursement Arrangement)
Q1. Who can use an HRA?
You have to be offered one by your employer. Rules vary by company.
Q2. Can I put my own money in HRA?
Nope, it’s all employer money.
Q3. What can I spend HRA money on?
Doctor visits, prescriptions, premiums, copays. Depends on your plan.
Q4. Can I roll over money?
Sometimes. Some employers allow it, some don’t.
Q5. Is HRA taxable?
Not usually. Money used for approved expenses is tax-free.
Q6. What if I leave the company?
You usually lose leftover HRA money. It stays with employer.
Q7. Will it show on my pay stub?
Yes, as non-taxable benefit. You can include it with our Free Paystub Generator.
