What Is a Health Reimbursement Arrangement
A Health Reimbursement Arrangement, or HRA, is an employer-funded account that reimburses employees for qualified medical expenses and health insurance premiums. The employer controls the account, contributes all the money, and sets the reimbursement rules. Unlike Health Savings Accounts or Flexible Spending Accounts, employees cannot contribute to an HRA themselves.
If you receive benefits from SNAP, Medicaid, TANF, or WIC, an HRA may affect your eligibility or benefit amounts. This is because most government assistance programs count employer contributions as income during your application review. Understanding how your employer's HRA contribution impacts your case is critical before you accept one.
How HRA Affects Government Benefits
When you apply for or recertify government benefits, you must report all employer contributions to your HRA. These contributions count as income for eligibility and benefit calculation purposes across most programs:
- SNAP: HRA contributions are counted as earned income. If your household income exceeds the gross monthly limit (130% of the federal poverty line), you may lose eligibility.
- Medicaid: HRA amounts count toward Modified Adjusted Gross Income (MAGI). Exceeding your state's MAGI threshold can disqualify you, though many states have expanded Medicaid to higher income levels.
- TANF: HRA contributions reduce your cash assistance payment dollar-for-dollar in most states after work expenses are deducted.
- WIC: HRA income is counted when determining household income eligibility, which maxes out at 185% of the federal poverty line.
Reimbursement Rules and Limits
Employers set their own HRA limits and coverage rules. There is no federal annual cap, but common employer limits range from $1,200 to $5,000 per employee annually. The employer decides which expenses qualify for reimbursement. Most HRAs cover health insurance premiums, copays, deductibles, and prescription drugs, but some exclude certain categories.
Money in an HRA does not roll over to the next year in most plans. If you don't use the allocated amount, you lose it. Some employers allow a limited carryover or grace period.
When to Report Your HRA
You must report your HRA during the application process and at every recertification for government benefits. On your SNAP, Medicaid, TANF, or WIC application, you will be asked about employer-provided benefits. Include the employer's annual HRA contribution amount. Failure to report this income can result in overpayment and you may be required to repay benefits.
If your employer changes your HRA contribution mid-year, report the change to your benefits caseworker immediately. Many programs allow you to request a review if your circumstances change.
Common Questions
- If I get an HRA at work, do I lose my Medicaid? Not automatically. It depends on your total household income and your state's income limits. Some HRA contributions will not push you over the threshold. Contact your Medicaid office before accepting an HRA to estimate your new income and see if you stay eligible.
- Can I use HRA money and still qualify for SNAP? Yes, but the employer contribution counts as income. If combined household income exceeds the limit, you won't qualify. Your caseworker can run the numbers using your household size and other deductions to tell you if you remain eligible.
- What happens to my HRA if I leave the job? You typically lose access to unused HRA funds when you separate from employment. Some employers allow a brief period to claim remaining balances. Check your employee handbook or ask HR about the specific policy.