Question
Simple for employers, convenient for employees
The Aetna HealthFund® Health Reimbursement Arrangement (HRA)* helps businesses stay on top of health care costs in a number of ways. Employers are solely responsible for contributing to the fund, so they can better manage their health care budgets for the year. And they can deduct reimbursed employee medical expenses as a business expense.
Also:
- The HRA can be paired with a deductible-based health plan.
- Employees can use the HRA to pay for covered services that are eligible under the company's plan.
- Leftover dollars may be carried over from year to year in the employee's account.
- If an employee changes companies or health plans, the HRA cannot move with them.
*HRAs are currently not available to HMO members in California and Small Group members in Florida.
Frequently asked questions about an HRA
|
|
Answer |
|---|---|
|
Who is eligible? |
All employees, as designated by employer. |
|
Who can contribute? |
Employer only |
|
Does the balance carry over? |
Yes - plan can define carry-over limit; HRA balance can carry over to RRA. |
|
Can rollover contributions from another account be made to this account? |
No |
|
Is the fund or account portable? |
No |
|
Are there interest or investment earnings? |
No |
|
What are the tax advantages? |
Employers may deduct reimbursed employee medical expenses as a business expense; reimbursements are excludable from the employee's gross income. |
|
Are the contributions taxable income to the employee? |
No. In addition, contributions are not subject to FICA or FUTA taxes. |
|
Are the distributions / reimbursements taxable income to the employee? |
No |
Question |
Who is eligible? |
|---|---|
Answer |
All employees, as designated by employer. |
Question |
Who can contribute? |
Answer |
Employer only |
Question |
Does the balance carry over? |
Answer |
Yes - plan can define carry-over limit; HRA balance can carry over to RRA. |
Question |
Can rollover contributions from another account be made to this account? |
Answer |
No |
Question |
Is the fund or account portable? |
Answer |
No |
Question |
Are there interest or investment earnings? |
Answer |
No |
Question |
What are the tax advantages? |
Answer |
Employers may deduct reimbursed employee medical expenses as a business expense; reimbursements are excludable from the employee's gross income. |
Question |
Are the contributions taxable income to the employee? |
Answer |
No. In addition, contributions are not subject to FICA or FUTA taxes. |
Question |
Are the distributions / reimbursements taxable income to the employee? |
Answer |
No |
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Legal notices
Aetna is the brand name used for products and services provided by one or more of the Aetna group of companies, including Aetna Life Insurance Company and its affiliates (Aetna).
Health benefits and health insurance plans contain exclusions and limitations.