The complete guide to HRA eligible expenses
A Heath Reimbursement Arrangement, HRA, is a popular employee benefit plan that allows employees to use pre-tax dollars to pay for qualified medical expenses and individual insurance premiums. HRAs are a great way for employers and employees to save on healthcare costs. How they work is once an employer decides on an HRA type and plan design, employees submit for reimbursement on qualified medical expenses. This guide will show you how to get the most out of your HRA by knowing the ins and outs of eligible HRA expenses.
HRA Eligible Expenses
First, let’s understand the two most common types of HRAs and how they function.
QSEHRA: The Qualified Small Employer Health Reimbursement Arrangement is designed for employers with less than 50 full-time employees. An employer has the flexibility to design the plan to cover either certain qualified medical expenses and/or individual health insurance premiums.
ICHRA: The Individual Coverage Health Reimbursement Arrangement is for employees of any size; however, reimbursements must be used toward health insurance premiums purchased on the exchange. Depending on the employer, they may also opt to include certain qualified medical expenses for reimbursement in addition to the cost of premiums.
How are HRA Qualified Medical Expenses determined?
Qualified medical expenses for an HRA are those that would be eligible for reimbursement under a typical major medical plan. This includes deductibles, copayments, coinsurance, or out-of-pocket costs. In addition, qualified medical expenses for an HRA can also include dental and vision care expenses, as well as prescription drugs. The list of qualified medical expenses is determined by IRS; see IRS Publication 502.
What medical expenses can be reimbursed with an HRA?
As mentioned, HRAs can be used to reimburse the premium cost for an individual healthcare plan or a family plan purchased on the exchange. However, depending on the plan design, employees may be eligible for reimbursement of premiums for vision and dental insurance.
If the HRA includes out-of-pocket medical costs, they have to be qualified expenses recognized by the IRS. Here is a list of those included on the list:
Acne Medication and Treatments, Acupuncture, Addiction Treatment, Adoption Related Medical Expenses, Alcoholism Treatment, Allergy and Sinus Medicine and Products, Ambulance (and other medical emergencies), Anesthesia (Including Dental, Medical, and Vision Treatments), Antacid, Antibiotic Ointment, Artificial Limbs, Artificial Teeth, Aspirin (or other pain relievers), Asthma Medicines or Treatment (over-the-counter), Bandages, Birth Control (including over-the-counter), Blood Pressure Monitor, Body Scans, Braille Books and Magazines (exceed costs of regular printed editions), Breast Pump and Accessories, Breastfeeding Classes, Canker and Cold Sore Treatment (over-the-counter), Childbirth Classes, Chiropractor, Cholesterol Test Kit and Supplies, Christian Science Practitioner, COBRA Premiums ( Premiums are only reimbursable with a QSEHRA or ICHRA), Cold and Flue Medicine, Contact Lenses (including saline solution and enzyme cleaner), Contraceptives, Corn and Callus Remover, Corneal Keratotomy, Cough Drops and Syrup, Crutches, Dental and Oral Pain Products (over-the-counter), Dental Treatment (preventative and dental disease, non-cosmetic), Dental Surgery, Dentures and Bridges, Diagnostic Devices (i.e. blood sugar test kit for diabetics), Dermatologist, Diaper Rash Creams (over-the-counter), Doctor visits (medical), Ear Drops and Wax Removal, Eye Exam, Eyeglasses, Eye Surgery (treatment of defective vision including Lasik), Feminine Hygiene, Fertility Enhancement (in vitro fertilization and surgery), First Aid Kits, Flu Shots, Fluoride Treatment, Guide Dogs, Hearing Aids, Hospitalization, Immunizations, Incontinence Supplies, Laboratory Fees, Lactose Intolerance Medication, Laxatives, Learning Disability Treatments, Legal Fees, Lice Treatment (over-the-counter), Listening Therapy, Medical Abortion, Lodging for Medical Care (including dental and vision care), Mastectomy-related Specialized Bras, Medical Equipment and Repairs, Medical Operations, Medical Records Charges, Medical X-Ray Charges, Menstrual Care Products, Mental Health Counseling, Midwife, Nasal Sprays, Nasal Strips, Norplant Insertion or Removal, Nursing Services, OB/GYN, Occlusal Guards (teeth grinding prevention), Occupational Therapy, Optometrist or Ophthalmologist, Ortho Keratotomy, Orthodontia (braces and retainers) Orthopedic and Surgical Supports, Orthotics, Ovulation Monitor, Oxygen, Physical Exams, Physical Therapy, Pregnancy Tests, Prescription Drugs, Psychiatric Care, Psychoanalyst, Psychologist, Radial Keratotomy, Reading Glasses, Sleeping Aids and Sedatives (over-the-counter), Spermicidals, Splints and Support Braces, Sterilization, Stop Smoking Programs, Stop Smoking drugs (including gums and patches), Sunglasses (prescription), Sunscreen (SPF15+), Therapy, Transplants, Transportation (healthcare-related expenses), Tubal Ligation, Urological Products, Vaccinations, Varicose Vein Removal Surgery, Vasectomy, Vision Care, Walking Aids, Wart Removal Products, Wheelchair, Wound Care
Qualified expenses with a prescription or note from a doctor
Some qualified expenses need a prescription or a note from a doctor in order to be eligible for reimbursement.
Alternative Dietary Supplements, Alternative Healers, Breast Reconstruction Surgery (following mastectomy treatment for cancer), Car Modifications, Compression Socks, Cord Blood Storage, Cosmetic Procedures for Birth Defects/Injury, Dental Veneers, Dermatology Products, Dietary Supplements, Dietitian, Doula, Dyslexia Treatment, Exercise Equipment, Fitness Programs, Homeopathic Medicines, Home Modifications, Humidifier, Magnetic Therapy, Massage Therapy, Medicated Toothpaste, Nutritional Supplements, Orthopedic Shoes and Inserts, Special Schooling (Mental and Physical Disabilities), Swimming Therapy, Transgender Treatments and Surgery, Vitamins, Weight Loss Drugs, Weight Loss Programs (Doctor Supervised)
Insurance Premiums
There are many different kinds of insurance premiums. The IRS has also laid out which premiums are qualified medical expenses.
COBRA Insurance Premiums
Dental Insurance Premiums
Health Insurance Premiums (including those purchased on the exchange)
Long-term Care Premiums
Medicaid/Chip Insurance Premiums
Medicare Part A, Part B Insurance Premiums
Medicare Supplement Insurance Premiums
Multiplan Insurance Premiums
Prescription Insurance Premiums
Short Term Medical Insurance Premiums
TRICARE Insurance Premiums
Vision Insurance Premiums
What medical expenses CANNOT be reimbursed?
The IRS also provides guidance on what can’t be deducted as a qualified medical expense.
Adoption Fees, Airborne/Vitamin C, Athletic Club Membership, Automobile Insurance Premiums, Baby Powder, Cancer Insurance Premiums, Childcare, Concierge Medical Fees, Cosmetic Procedures, Cosmetics, CPR Classes, Dental Floss, Dental Toothpaste (over-the-counter), Diapers, Diaper Pails, Elderberry, Electrolysis, Face Lift, Funeral Expenses, Hair Regrowth Products, Hair Transplants, Hair Treatment, Hand Lotions, Lactation Items, Long-Term Care Services, Marriage Counseling, Maternity Clothes, Sunscreen with less than SPF 15, Teeth Bleaching, UV Protection Clothing, Vitamins (General Health), Weight Loss Foods, Weight Loss Programs for General Health
Still have questions?
If you still have questions, Take Command’s platform allows employees to upload their eligible expenses for ease of approval and reimbursements. You can also chat with us on our website or email support@takecommandhealth.com. We’d be happy to help!
