An HRA is an account your employer funds to help you pay medical bills

An HRA (Health Reimbursement Arrangement) is money your employer sets aside in an account for you to use on medical expenses. You do not put your own money in — your employer decides how much to contribute each year, and you spend it on things like doctor visits, prescriptions, dental work, or vision care. When you incur a medical expense, you submit a receipt or claim to your employer or the plan administrator, and they reimburse you from your HRA account.

The key difference between an HRA and accounts you may have heard of (like an HSA or FSA) is control: your employer owns the HRA account, sets the rules for what counts as a medical expense, and decides whether unused money rolls over to the next year or disappears. You cannot take the account with you if you leave your job. Because your employer is funding it entirely, the money is not taxed as income to you, and you do not pay taxes on the reimbursements either.

Key Takeaways

  • Your employer funds an HRA account entirely — you contribute nothing from your paycheck.
  • You can use HRA money to pay for medical, dental, vision, and prescription expenses that your health insurance does not cover or covers only partially.
  • You must submit receipts and claims to get reimbursed; the money does not automatically appear in a debit card or bank account.
  • HRA rules vary by employer, including what expenses count, whether unused money carries over, and how long you have to submit claims after leaving the job.
  • An HRA is not portable — if you change jobs, you lose access to any remaining balance unless your new employer has an HRA and agrees to honor the old one.

How you use an HRA to pay for medical expenses

When you have a medical expense, you first pay for it yourself or let your insurance company process it. Then you gather your receipt or explanation of benefits (EOB) from your insurance company and submit a claim to your HRA plan administrator — usually through an online portal, by mail, or by email. The administrator reviews the claim to confirm it is a may have access to medical expense under your plan's rules, and if it is approved, they send you a reimbursement check or deposit the money into a bank account you designate.

The timing varies. Some employers reimburse within a few days; others take two to three weeks. You will need to keep track of what you have spent and what you have submitted, because most HRA plans set a important date for submitting claims — often 60 to 90 days after the expense occurs, though some allow claims through March 31 of the following year for expenses from the prior calendar year. If you miss the important date, that expense is not reimbursed and the money is forfeited.

Not every medical expense counts. Your HRA plan document lists what is covered — typically things like copays, coinsurance, deductibles, prescription drugs, dental work, vision care, hearing aids, and mental health treatment. Expenses that insurance would normally cover are usually may be able to access. Expenses that insurance explicitly excludes (like cosmetic surgery or certain alternative treatments) are usually not may be able to access, even if your HRA would otherwise cover them.

What happens to unused HRA money at the end of the year

This is where HRA rules differ most from employer to employer. Some employers allow unused HRA money to roll over to the next year, so if you do not spend your full balance by December 31, you keep it. Other employers follow a "use-it-or-lose-it" rule, meaning any money left in your account at year-end disappears and goes back to the employer. A few employers offer a grace period — usually 60 to 90 days into the next year — during which you can still submit claims for expenses from the prior year.

You should know your employer's carryover rule before the year ends, because it affects how much you should plan to spend. If your plan uses "use-it-or-lose-it," you may want to schedule dental cleanings, vision exams, or other routine care before December 31 to use up your balance. If your plan allows carryover, you have more flexibility to let the money sit until you need it.

HRA accounts versus HSA and FSA accounts

An HRA, HSA, and FSA all help you pay for medical expenses with pre-tax money, but they work differently. An HSA is owned by you, funded by you or your employer (or both), and you keep it even if you change jobs — it is portable. An FSA is also employer-run but is typically "use-it-or-lose-it" and cannot be carried over. An HRA is employer-owned, employer-funded, and not portable.

Another difference: with an HSA, you get a debit card or checkbook and can pay directly from the account. With an HRA or FSA, you usually pay out of pocket and then submit a claim for reimbursement. Some employers offer an HRA with a debit card, but this is less common. If you have both an HRA and an HSA or FSA, you cannot use both to pay for the same expense — you have to choose which account to draw from.

What to do if you leave your job

When you leave your employer, your access to the HRA account typically ends. If there is money left in your account, what happens depends on your employer's plan rules. Some employers allow you to submit claims for a limited time after you leave (often 60 to 90 days), but others cut off access when ready. A few employers allow you to continue submitting claims through the end of the calendar year for expenses you incurred while employed, but this is uncommon.

Before you leave a job, check with your HR or benefits department about the claims important date. If you have pending medical expenses, try to get them done and submit the claims before your last day, or as soon as possible after, while you still have access to the portal or can contact the plan administrator. Do not assume you can submit claims months later — most plans have strict important date.

How to find out what your HRA covers

Your employer should have given you a summary of your HRA plan when you enrolled in benefits, or you can ask your HR or benefits department for the plan document or summary. This document lists what expenses are covered, the annual contribution amount, the carryover or "use-it-or-lose-it" rule, claim submission important date, and how to submit claims. If you cannot find the document, email your benefits administrator and ask for a copy of the plan summary or the plan document itself.

You can also log into your benefits portal (if your employer has one) to see your current HRA balance, review past claims, and sometimes find a list of covered expenses. If your employer uses a third-party benefits administrator, that company's website or customer service line can answer questions about what is covered and how to submit a claim.

Frequently Asked Questions

Can I use my HRA to pay for my spouse's or children's medical expenses?

Yes, if they are covered under your health insurance plan. You can use your HRA to pay for their copays, deductibles, and other may have access to medical expenses. If they are not on your insurance plan, most HRA plans do not cover their expenses, though some employers allow it — check your plan document or ask your benefits department.

What if I do not spend my full HRA balance before the year ends?

It depends on your employer's plan. Some plans allow unused money to carry over to the next year. Others use a "use-it-or-lose-it" rule, meaning you lose any unspent balance. A few offer a grace period of 60 to 90 days into the next year to submit claims for prior-year expenses. Check your plan document or ask HR which rule applies to you.

Can I use my HRA for over-the-counter medications without a prescription?

Most HRA plans cover over-the-counter medications like pain relievers, cold medicine, and allergy medication, but some require a prescription or a doctor's note. Check your plan document or contact your benefits administrator to confirm what over-the-counter items are covered under your specific plan.

Do I have to use my HRA before I use my health insurance deductible?

No. You can use your HRA and your insurance deductible in any order. Some people use their HRA first to cover out-of-pocket costs, then let insurance kick in once the deductible is met. Others do the opposite. The choice is yours, as long as you do not use both accounts to pay for the same expense.

What counts as a may have access to medical expense for an HRA?

may have access to expenses typically include copays, coinsurance, deductibles, prescription drugs, dental work, vision care, hearing aids, mental health treatment, and medical equipment like crutches or blood pressure monitors. Expenses that insurance would normally exclude — like cosmetic surgery or certain alternative treatments — are usually not covered. Your plan document lists exactly what is may be able to access.