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    • Health reimbursement arrangement (HRA)

    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

    Question

    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.