What is a key feature of a Health Reimbursement Account (HRA)?

A key feature of a Health Reimbursement Account (HRA) is that contributions are made solely by the employer. HRAs are designed to provide a way for employers to reimburse employees for qualified medical expenses on a tax-free basis. This unique structure means that only the employer can fund the account, allowing organizations to control costs while providing employees with a means to manage healthcare expenses effectively.

Choosing this option reflects an understanding of the nature of HRAs, as they are not dependent on employee contributions or payroll deductions, which differentiate them from other health accounts such as Health Savings Accounts (HSAs). Additionally, HRAs are not portable; they typically remain with the employer, emphasizing the funding structure as a distinguishing trait. This reinforces the concept of employer responsibility in providing health benefits while empowering employees to use those benefits for medical expenses.