Your health plan likely has a deductible. You have to pay that much toward medical expenses before your insurance starts to pay. Some HRAs have their own deductibles. In the same way as your plan's deductible, you have to meet your HRA deductible before you can use the funds in your account.

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* Counts toward your plan's deductible

Example:

Sarah has a health plan with a $3,000 deductible and an HRA worth $1,500. Her employer has included an HRA deductible of $500. 

  • Sarah gets admitted to the hospital. Since her HRA fund has a deductible, she has to pay the first $500 toward her admission. Then her HRA is available to pay the remaining $1,500.
  • Between the $500 she's paid out of pocket and the $1,500 from her HRA fund, she's paid $2,000 of her $3,000 deductible.
  • Sarah now has to pay $1,000 out of pocket to meet her plan's deductible. After that, her health plan will begin coverage and she's responsible for her coinsurance.