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Health Reimbursement Arrangements

Reduce Your Healthcare Premiums and Offset Employee Deductibles

By modifying your health plan design to a higher deductible, you can save money in annual employee premiums. However, the increased deductible may cause employee dissatisfaction. A Health Reimbursement Arrangement (HRA) provides a way to save money in taxes, but also offers your employees a break towards their out-of-pocket expenses.

How do HRAs work?

HRAs are a different way of “sharing the cost” with your medical insurance carrier. You place a percentage of the money you're saving from lowered premiums into the HRA, which is 100% funded with employer contributions. Then, depending on how you set up your account, employees can use a portion of the funds to pay for healthcare expenses not covered by their medical plan. Essentially, you’re offsetting employees' deductibles with a percentage of the money you're saving by increasing premiums.



Offers greater plan design flexibility than Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs).

Higher Deductible Health Plan

Typically paired with a higher deductible plan but not required to be paired with a qualified High Deductible Health Plan. Must be tied to some type of medical plan.

Employer Funded

Set up and funded only by the employer. The HRA does not fall under a Section 125 Plan, but contributions are not subject to withholding or employment tax. 


Used to reimburse healthcare services like doctor’s office visits, hospital services, and prescription drugs.

Multiple Plan Types to Solve Different Pain Points

The various HRA plan designs allow employers to control the total cost of offering an HRA. Employers may design their HRA to reimburse expenses in a variety of ways, taking into consideration their medical plan and deductibles. Since HRAs are not required to be pre-funded, you decide if you want to pre-fund the account or pay only when an employee files a claim.

Comprehensive HRA

Covers all eligible out-of-pocket medical expenses.

Deductible HRA

Covers only items that apply to health plan deductible.

Retiree HRA

Covers all eligible out-of-pocket medical expenses and/or reimburses eligible insurance premiums for retirees.

Limited Expense HRA

Works in conjunction with a qualified High Deductible Health Plan and Health Savings Account.

Reimbursement Options

Benefits Debit Card

Pay for eligible expenses via a debit card directly from account.

Mobile App

Manage account via a smartphone and upload documentation to prove expenses are eligible. 

Online Account

Manage account via a computer and upload documentation to prove expenses are eligible. 

Recent HRA Articles


Support for Employees

We provide many resources for employees who have American Fidelity’s Health Reimbursement Arrangements. We’re here to help.

Learn How to File an HRA Claim 

American Fidelity Assurance Company