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Small Business Employee Benefits and HR Blog

Health Reimbursement Arrangements (HRAs) - Qualified Medical Expenses for 2015

Small businesses are increasingly looking to Health Reimbursement Arrangements (HRAs) to contribute tax-free to employees’ healthcare. HRAs allow employers to reimburse employees for eligible medical and insurance expenses. Which medical expenses are covered under an HRA? This article outlines qualified HRA medical expenses for 2015.HRA Qualified Medical Expenses 2015

What's Covered Under an HRA?

The Internal Revenue Service (IRS) establishes guidelines for what types of medical expenses may be reimbursed tax-free through an HRA. These expenses are outlined in IRS Publication 502. Common expenses are outlined below.

Within what the IRS says is reimbursable, an employer can restrict categories further. For example, an employer may set up an HRA to reimburse only out-of-pocket medical expenses not covered by their group health insurance plan.

Just remember that each employer’s HRA is different. Employers can choose to customize their HRA with different monthly allowances, varying allowances by class of employee, and specific reimbursable and non-reimbursable expenses (within the IRS guidelines). The HRA Plan Documents will always specify what type of expenses the HRA covers.

Employers are also customizing their HRAs (and other medical reimbursement plans) to be compliant with new Obamacare rules. In some cases, this includes modifying what is reimbursable or how the HRA is structured.

Related - What You Need to Know About HRAs and Obamacare

HRA Qualified Medical Expenses for 2015

So, what exactly is covered under an HRA? Here are common eligible HRA expenses:

  • Acupuncture
  • Ambulance     
  • Birth Control
  • Chiropractor
  • Doctor Visit Co-Pays   
  • Eye Exams
  • Hearing Aids
  • Home Care
  • Hospital Services
  • Insurance Premiums
  • Lab Fees
  • Medications
  • Nursing Services
  • Operations
  • Psychologist
  • Transplants
  • X-Rays

For a full list of eligible and ineligible HRA expenses, click here.

Conclusion

HRAs may be used on a wide range of out-of-pocket medical expenses, including health insurance premiums. The IRS establishes guidelines for qualified medical expenses, and employers may restrict the categories of expenses further to meet their health benefit goals.

Do you have a question about HRA qualified expenses in 2015? Leave a question below. We’d be happy to help answer it.

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