Health Reimbursement Arrangement

No. An HRA is entirely funded by your employer. You do not make any contributions to it.

Your employer will determine and communicate which expenses your HRA can be used for. You can use HRA money to help pay for qualified out-of-pocket medical, dental, vision, and prescription drug expenses. The definition of a qualified medical expense is determined by your employer (within certain guidelines) and that definition must be made at the HRA plan’s inception. Some of the most popular expenses would be doctor co-pays, lab fees, over the counter medications, some medical equipment, prescription drugs and eyewear and doctor or hospital fees. For medical HRAs that use the 213(d) eligible expense list, you may find a listing here. If you have a limited purpose HRA for dental and vision expenses, you may find a listing here.

There are a few ways to spend your funds. If your plan comes with a debit card, that is the easiest method to pay providers or purchase eligible items. It is generally mailed to all participants a few weeks before your plan’s effective date. Activate it according to the directions on the mailer and use it to purchase eligible items or pay for eligible services. You may also pay for eligible items with your own money and submit a claim for reimbursement online or via the MyChoice Mobile App. Finally, you may pay a provider, such as a doctor or lab directly with your account online or via the mobile app, and we will submit the payment to that provider on your behalf.

Use it or lose it rules are not generally applicable to HRAs since they notional accounts. In other words, employers do not actually have to set aside HRA funds into a separate account. Instead, they can reimburse claims as they arise. Generally, an employer will determine how much they wish to contribute to employee HRA plans (e.g., $500 or $1,000). Whether any unused portion of that amount can carry over from year to year or not is determined by the employer-specific plan provisions.

The best way to stay up to date on your HRA is to log in to your benefits portal online or access your account via the MyChoice Mobile App. You may also call your member services number listed on the back of your debit card for an automated balance or in-person balance request.

If you submit a claim for any HRA expense, our claims reviewers will determine whether it meets the criteria for your organization’s eligible expense list. If the item or service is not eligible, then your claim will be denied, and you will not receive reimbursement. If you use your payment card to make an ineligible expense transaction, you will be required to repay the HRA or provide substitute documentation for an eligible expense that you paid out of pocket that is equal to the amount of the ineligible expense.

HRAs come in many "shapes and sizes." Employers may choose to fund an HRA for the following types of coverage:

1. Individual Coverage (ICHRA) – covers premiums for individual health coverage, eligible medical expenses, NOT paired with a group health plan
2. Excepted Benefit HRA – covers employer-specified eligible expenses within group health plan, COBRA coverage and excepted benefits coverage
3. Qualified Small Employer HRA (QHSERA) – small employers (<50 FTEs) may use to cover premiums for individual health coverage, eligible medical expenses
4. Retiree HRA – covers retirees for premiums for coverage through ACA marketplace or retiree health exchange. May also be used for qualified eligible expenses.
5. Limited Purpose HRA – covers dental and vision expenses only, paired with group health plan and typically paired with HSA option
6. Integrated HRA – covers standard out-of-pocket eligible medical expenses, paired with group health plan

Most of the time, yes. The IRS requires HRA participants to prove the expense was eligible. MyChoice Accounts will help you by requesting documentation when we can’t determine how the funds were used. Usually, an explanation of benefits or a detailed receipt will work. If you have a debit card for your HRA, we are often able to verify that your expense was eligible based on the location code or item code, and you will not need separate documentation. Always keep your receipts until you are sure the claim has cleared.

MyChoice Accounts will send you several reminders over the period of several months. Your employer has determined the amount of time you have to supply documentation. At any time during this period, you may offer a substitute documentation (i.e. documentation for a different eligible expense you paid out of pocket) or repay the amount back to your HRA. At the end of your appointed period, we may suspend your debit card until the matter is resolved. If the claim is not settled by the end of the plan year, the amount of the claim can be added back to your taxable income.

If you use your MyChoice Accounts debit card, you will only need to provide documentation about 10% of the time. Your card is coded to work on eligible expenses at thousands of retailers, drug stores, pharmacies, doctor’s offices and many more locations. When you use it at approved merchants or at approved healthcare provider locations, we can determine that your expense was eligible and automatically approve it. Sometimes, we’ll need to ask for follow-up to ensure that the service you received at a healthcare provider is eligible. For instance, the HRA will cover your semi-annual teeth cleaning expenses at your dentist office but will not cover a teeth-whitening visit.