What Are HRA Eligible Expenses for Reimbursement?

A Health Reimbursement Arrangement (HRA) is an employer-funded health benefit designed to help employees manage their healthcare costs. Employers contribute funds to an HRA, and employees can then seek reimbursement for eligible medical expenses. Understanding the types of expenses that qualify for reimbursement helps maximize the benefits of an HRA.

Defining HRA Eligible Expenses

Eligibility for HRA reimbursement is determined by Internal Revenue Service (IRS) regulations governing “qualified medical expenses.” These expenses are defined as costs for the diagnosis, cure, mitigation, treatment, or prevention of disease, and treatments affecting any part or function of the body. The expense must be primarily for medical care, not merely for general health or cosmetic purposes. While IRS rules provide the overarching framework, employers can customize their HRA plans to either cover a wide range of these qualified expenses or limit reimbursements to more specific categories.

Common Medical Expenses

Many common medical services and items are eligible for HRA reimbursement. Doctor visits, including those to general practitioners and specialists, along with associated copayments, coinsurance, and deductibles, are covered. Hospital services, whether for inpatient stays or outpatient treatments, are also eligible expenses. This includes costs for medically necessary surgeries, laboratory tests, and diagnostic procedures such as X-rays.

Prescription medications, including insulin, are reimbursable through an HRA. Medical devices and supplies necessary for treatment or prevention of illness also qualify, such as crutches, wheelchairs, blood pressure monitors, and diabetic supplies. Immunizations and preventive care, like routine check-ups and health screenings, are eligible expenses. Travel costs directly related to receiving medical care, such as mileage to appointments, parking fees, and public transportation fares, can be reimbursed within specific limits.

Other Qualified Healthcare Costs

Beyond common medical expenses, HRAs cover other healthcare costs that align with IRS guidelines. Dental care is eligible, encompassing routine services such as cleanings, X-rays, and fillings, as well as major treatments like crowns, bridges, and orthodontia. These dental services must be for the prevention, diagnosis, or treatment of a dental condition, rather than purely cosmetic. Vision care expenses are covered, including eye exams, prescription eyeglasses, contact lenses, and corrective eye surgeries such as LASIK.

Mental health services also qualify for reimbursement, including therapy, counseling, and psychiatric care provided by licensed professionals. Alternative treatments, when medically necessary, can be eligible, such as acupuncture and chiropractic care. Over-the-counter (OTC) medications and health products may be reimbursable, including items like pain relievers, allergy medications, and first-aid supplies. Personal protective equipment (PPE) purchased to prevent the spread of certain illnesses, such as masks and hand sanitizer, is an eligible medical expense.

Expenses Not Covered

While HRAs cover many medical costs, certain expenses are not eligible for reimbursement, even if they relate to personal well-being. Cosmetic procedures are excluded unless necessary to correct a deformity arising from a congenital abnormality, personal injury, or disfiguring disease. This means elective procedures such as teeth whitening or non-medically necessary plastic surgery are not reimbursable. General health and wellness items or services not primarily for the diagnosis, cure, mitigation, treatment, or prevention of a specific illness are excluded.

Examples of non-covered general health expenses include gym memberships, health club dues, and vitamins or nutritional supplements. Personal hygiene products, such as toothpaste, shampoo, and deodorant, are not considered eligible. Expenses reimbursed by other insurance plans or healthcare benefits also cannot be submitted for HRA reimbursement, as this would constitute double dipping.

Understanding Your Specific HRA Plan

While IRS rules establish broad eligibility, the specifics of what an HRA covers vary based on an employer’s plan design. Participants must review their specific HRA plan documents to understand their coverage. These documents often include a Summary Plan Description (SPD), which outlines the plan’s provisions, eligible expenses, and reimbursement procedures.

To confirm an expense’s eligibility or to initiate a reimbursement, individuals need to submit an expense reimbursement form along with supporting documentation, such as receipts or an Explanation of Benefits (EOB) from their insurance provider. This documentation helps substantiate the claim and ensures compliance with both IRS regulations and the specific plan rules. If there are questions about a particular expense, contacting the plan administrator or referring to the plan’s detailed terms is the best course of action.