How does a health reimbursement arrangement work?

Who is this for?

Michigan Health Insurance – Customer Service – Health Spending Accounts

If you’re interested in health reimbursement arrangements, this information can help you understand how they work.

A health reimbursement arrangement is usually paired with a high-deductible plan, but it can be used with any insurance plan. It can even be offered by your employer as a stand-alone benefit.

Your employer contributes a set amount of money to your HRA each year for your use. Unlike other health spending accounts, only your employer can put money into your HRA. Your employer owns the account.

When you go to the doctor or hospital, the money in your HRA will cover eligible expenses, like your deductible or copay. If you have a Blue Cross Blue Shield of Michigan plan paired with a HealthEquity® HRA, you don't need a debit card, or have to worry about getting or submitting bills. Your doctor will automatically get payment. You'll see the payment listed on your explanation of benefits, or EOB, as well as your online account.

If you use up all the funds in your HRA before the end of the year, you'll have to pay any additional out-of-pocket costs. If you have money left over, your employer may let it roll over to the next year.

If you are unsure if your employer offers an HRA, contact your Human Resources department.

What are the advantages of an HRA?

Health reimbursement arrangements have some benefits that can help you save in health care costs.

  • Affordability: Premiums for health insurance plans offered with an HRA are generally less per month than other plans.
  • Employer contributions: Your employer fully funds your HRA with no contributions from you.
  • Potential tax savings: Money that goes in and out of these accounts can be tax exempt or tax deductible.

Which Blue Cross Blue Shield plans pair with an HRA?

You have an HRA if you get your insurance through your employer and you have one of these plans: